Big data is a symptom of our age. We are creating an ever-expanding universe of information that somehow needs to be collated, ordered and analysed before it overwhelms and gobbles us all up.
Getting someone else to do this for you is now a growing business in itself, set to be worth US$88bn (A$110bn) by 2021, according to research from US computer data storage company, EMC2 .
This leviathan isn’t simply an issue for finance, sales and marketing departments. It has a key role to play in people analytics, giving HR professionals the skills and ability to support a general manager or c-suite with a near real-time gauge of a company’s cultural climate. Armed with the right data, HR professionals have the potential to identify adjustments that would improve productivity at a strategic level.
Up until now, it’s fair to say that HR departments have avoided devolving their people into numerical data, with some justification. But they’ve also missed the fact that they too have valuable data that can be consolidated and interpreted with an eye for patterns.
Global research conducted by Deloitte principal Josh Bersin showed that only 14 per cent of businesses reported analytics capability in HR in 2013. This was compared to 81 per cent in finance, 77 per cent in operations, 58 per cent in sales and 56 per cent in marketing.
An indication of how times are changing in this area, from Bersin’s research we also learn that 78 per cent of large companies with 10,000 or more employees rated HR and talent analytics as an “urgent” or “important” priority.
It’s a trend that consultancies such as McKinsey are well aware of. “HR is a field driven by intuition – we’ve done this with company X and it should work here – but this doesn’t take context properly into account. The practice of throwing mud against the wall and hoping it sticks happens all too often,” explains McKinsey director, Tom Saar.
There are two problems with this approach he says. Firstly there’s no aim at a particular cause, and there’s a long feedback loop before you know if your hypothesis is correct.
“We’re trying to become more surgical in selecting the areas to make a difference, so you get a multiplier effect from your actions, and a feedback loop that functions essentially in real time. That way you know if something works or not, and can fix it accordingly,” says Saar.
“The benefit is how quickly you can change an organisation. The rule of thumb is that it’s a three to five-year journey to change culture. We’re trying to shorten that cycle, and I think predictive analytics is going to be the key to doing that.”
The first step towards real-time feedback boils down to the data of individuals, as HR explores the mix of employees, their experiences and their predispositions, to better understand the workforce as a whole.
“We’ve seen organisations that can analyse email patterns to understand the level of connectedness between the different sites and functions,” says Saar. “It’s the kind of thing that wasn’t done much 10-15 years ago, but is now a commonplace analysis,” Saar says.
“You can harness data that already exists in the organisation – cultural surveys, engagement surveys, leadership surveys and 360 feedback. All of that becomes data points.
“There’s other data, too, that organisations aren’t regularly tapping into, such as exit interviews and assessment centre results. It uses some external tools, but it’s internal information about the company.”
A workshop on big data will take place at AHRI’s National Convention. Details here.
This article is an edited version. The full article was first published in the June 2015 issue of HRMonthly magazine as ‘Size Matters’. AHRI members receive HRMonthly 11 times per year as part of their membership. Find out more about AHRI membership here.