Is HR ready to make the most of people data?

For many HR professionals the world of data and analytics has been something for big tech firms to dabble in, very much out of reach if you’re in a small or medium sized business. That view however is likely to change as new technology and software is offering innovative ways to explore data and draw insights. But is the HR function ready to capitalise on these new opportunities that changing tech is offering? And can HR really become a data driven function, seeking out and using data to inform decision making?

To answer these questions we conducted a global survey of professionals. Our new research People analytics: driving business performance with people data, developed in association with Workday, surveyed almost 4000 professionals in the UK, US, SE Asia, and MENA to see if and how they use people data in their work. We investigated if HR’s use of people data and explored how non-HR professionals, such as finance professionals, are incorporating people data into their work. Our findings show some interesting themes emerging in the use and impact of people analytics, more of which I share below:

HR lacks the skills and confidence to make the most of people analytics

Analytics and data science capabilities have long been highlighted as areas that the HR profession should look to develop. In my work on this topic I’ve met a fair few HR professionals who described themselves as “not a numbers person”: data is a foreign language, something which they’re not comfortable using, and are not able to incorporate into their work. We decided in our global survey to see if this trend plays out in other regions too.

Our survey found that confidence to conduct analytics drops considerably for HR professionals in the UK as they do more advanced analytics. Whilst basic analytics (calculating mean and quartiles) for the UK was high (76% said they were confident doing this in the UK, 67% in SE Asia) it dropped off considerably for harder analytics; only 21% of HR professionals in the UK said they were confident conducting advanced multivariate analysis (e.g. structural equation modelling). In SE Asia confidence was much higher at 46%. There are clear regional differences in confidence for HR people.

We also asked HR, finance and other professionals about the abilities of their HR teams to conduct analytics, to see if there are any differences in terms of HR’s reputation for using data to make decisions. Whilst 54% of HR professionals globally said their HR team had demonstrable numerical and statistical skills, only 36% of finance professionals and 35% of other professionals agree. We also found that only 37% of finance professionals believed their HR team were experts at using people data. The results show that HR’s ability to use people data is questioned by other functions, and as such this may be having a real impact on the function’s reputation.

Structuring analytics functions

Our survey also found that the structure of analytics functions differs globally. Standardised approaches to analytics (e.g. formalised roles, formalised processes, governance and guidelines to analytics projects) were common in SE Asia; 67% agreed that they had standard approaches. However in the UK less than half of HR respondents said their analytics practice was standardised (42%).

Recognised teams or roles for people analytics also differed globally; in the UK 35% of HR respondents stated that they had a centre of excellence or recognised role for people analytics; but in SE Asia and MENA the number jumps to 64% and 60% respectively. Our survey appears to show very different models of organising people analytics forming globally. Along with the skills and confidence profiles it appears that people analytics takes different shapes in different contexts.

People analytics impact

HR professionals use people data to evidence impact and explore key issues relating to their workforce. Connecting people analytics to business issues is important if HR is generate positive outcomes. To understand the impact of people analytics we investigated the use of people data for making decisions by non-HR professionals.

We found that 53% of global non-HR respondents stated that the people data and analytics they use aids the decisions that they make, but there was wide variation in regional responses. In the UK only 40% of non-HR professionals agreed, whilst in MENA 70% state agreement. A similar trend occurred when looking at access to advice and guidance from internal experts; in the UK 43% of non-HR colleagues said they had access to support; but in SE Asia two-thirds said they had internal expertise they access when the need help.

We also found that people analytics is being used to understand key areas of people risk. For example, 73% of HR respondents stated they collect data on unethical employee practices, and 73% collect data on psychological data. It appears that people data forms part of the way HR teams are understanding risk in their organisations.

In addition to this we also investigated how HR is managing key people risks. A hot topic today is data protection and cyber security- using our survey we were able to explore professional perspectives on the role of HR in managing cyber security. We found that almost half of HR professionals in the UK agreed that HR plays an active role improving cyber security (46%). Finance and other professional perspectives were similar (41% and 39% respectively). It appears there is still more to do to build HR’s capability in managing key risks, and using data to inform risk management practice.

What should HR do to improve?

We make a number of recommendations in our study;

  • Firstly, we believe that HR should build its skills and capabilities to use people data more effectively. There appears to be a large skills gap in the UK in particular that needs addressing. HR leaders have a clear role to play here in driving investment in skills, and providing opportunities for HR professionals to use people data more readily.
  • Secondly, we see that further integration between HR and its business colleagues is important and should be done with people data in mind. Using systems which combine data sets and provide combined business and people insights can help to build the reputation of HR and the show the value of people data.
  • Finally, we think people risk is an important and still emerging concept in HR. Therefore people data should be used to understand how key people risks are developing, and the impact of these risks over the short, medium and long-term.

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