We Peoplegeeks enjoy modernizing HR processes and making them relevant again from a business perspective. Companies around the world ask us what are the easiest steps (“quick wins”) to get started with people analytics. We love working closely with our customers like an architect, identifying best possibilities and pairing up with top partners to deliver exceptional value. Sometimes companies far away are so curious on what we’re doing in modern HR that they send us questions to answer, how cool is that?!
A few weeks ago, SCS Italy interviewed our chief data geek, Pauli Dahlbom.
1.) Pauli, how are Data Analytics changing the HR Processes?
I see changes coming in 3 stages, which depend on clients’ current maturity and goals:
First is taking a formal approach in making processes themselves more quantifiable, thinking about the applications and questions we would want to use data for and ensuring we are gathering a broad and detailed understanding of various aspects of the process. If we take recruitment as an example, we would want to expand the understanding from merely measuring some basic traditional KPI’s like time-to-hire, cost of hiring, etc. into understanding the experience from candidate, hiring manager and HR perspective.
Many organizations have been implementing new technology, but have failed to consider the data needs from analytics perspective. Later they realize, that the choices made when designing processes and selecting technology might not serve well more advanced analytics. Important data points get lost and data might be collected in a format that makes it hard to combine with other data sources.
Second aspect is optimization and redesign of processes with the help of data and evidence of what works. Once the process is made measurable, organizations can conduct pilots and experiments to constantly make small tweaks on what works to improve process efficiency and impact. If taking the recruitment process as an example here again, we would think of questions like analyzing different hiring sources by region by role, understanding the drivers behind great candidate experience, analyzing and optimizing the overall process flow, studying the impact between different selection criteria, minimizing bias and improving diversity.
Third is automation and application of AI powered intelligent assistants. In this stage, we are taking full advantage of what modern technology and analytics capabilities can offer. These technologies are best applied on taking some of the administrative burden out in areas where we are currently just replicating a standard process. Cognitive technologies like IBM Watson can do amazing things today and companies are building their intelligent applications to automate and augment the processes. Look for applications like automating the scheduling process of work shifts, offering intelligent virtual HR assistants and chatbots for first level support and improving the overall process flow and experience in areas like applying for a job or onboarding. These technologies are not replacing HR, but instead augmenting them so that they can focus on more value adding tasks.
I see lots of interest especially among bigger companies who are now piloting and experimenting these new solutions.
2.) Which kind of resistance to accept this technology have you found among the HR Managers?
If you think of the traditional HR profile, they have been people who wanted to work in HR because they care about people, and have concern for their development and wellbeing. It’s quite small minority of people who want to work in HR because they love numbers, think about the possibilities of advanced analytics or technological advancements.
So, I think a lot of the fear comes from not fully understanding the new technology and the complexity behind advanced analytics.
For example, many HR people fear that this new technology and analytical approach will take out the human element, as in opposite in many cases it should free more time to better serve the organization in areas where it matters the most.
Similarly, some might fear about their own role in future, they are thinking of questions like how this new technology will impact their role and what new skills will be required to keep their own expertise relevant along this new technology.
Some more senior HR managers might fear that the old “gut feel” approach that has taken them to the current position might get challenged when advanced analytics will make everything more open. If the performance management process appears to be flawed or your talent development program doesn’t yield any impact, you will need to fix that.
3.) Could you please tell us a success story about an organisation that has successfully implemented an HR Analytics approach?
Well, many of the pioneers in this area have been data savvy, relatively big technology organisation like Google, IBM, Microsoft and Facebook. Applying analytics and technology has been in their DNA for years and I think it’s a bit unfair to compare yourself against those organisations, because they have obvious advantages compared to organisation in other areas.
But if we then look for success stories from other industries, I think most importantly the successful organizations have first realized the potential impact and opportunities of what analytics and advancements in modern technology can offer them. This realization in the top management has made data driven HR a top priority for them.
After being serious about it, they have started fast by creating sets of relevant use cases for People analytics both in short and long term. Then they have started moving ahead with series of agile pilot projects to accelerate their learning about different aspects.
So it’s not about having necessary better technology or data to start with, but about being smart on selecting relevant use cases for applying analytics already now with the existing data and then focusing on building the capability on areas that matter the most for future advancement. If you think of it, you can buy / resource the technology and expertise immediately. Two things however will take more time: managing and cleaning your data and developing the culture and competencies to support the successful adoption of analytics driven HR.
4.) Which are the sectors / contexts that you found to be more receptive and ready to embrace HR data analytics?
I find lots of HR enthusiasts out there who would want to solve an HR problem. Those cases rarely go anywhere, because the business doesn’t really care about HR’s problems. But as soon as we think some of the relevant business problems and build business cases around them, we are much more likely to get the needed executive support from the business. So, we should always start with the business aspect in mind and think of the potential outcomes of the analytics projects. What could we do with the potential findings, how would that inform us to do things differently than what we are doing today?
I think it’s worth noting that many other departments in organizations have been applying different analytical approaches to improve in their own areas. Think for example of sales and marketing, operations, strategy. They are all trying to solve business problems from their perspective. Go talk with them, ask what are they currently working on and think if HR could help solve part of their problems by better understanding of the potential people impact of them. That way we can avoid working in silos and getting only partial truths to the business problems in question.
When thinking of the potential value of your cases, I recommend thinking it through big numbers. With big numbers, I refer to the number of impacted employees, we can think of the amount of decisions that would potentially be impacted with the analytics project as well as the monetary impacts, whether those being savings from efficiency gainings or better impacts on outcomes.
5.) Which kind of evolutions on this topic can you predict for the coming years?
If we look to the history, the people analytics community of practitioners, vendors and consultants have been predicting for years that this field will soon take off. What has indeed increased, is all the hype around it, but wide adoption and investment has been growing relatively slow. The gap is constantly growing between the few brave early adopters who are moving fast and those who are still struggling keeping the lights on and firefighting with the administrative burden. Many organisations still struggle with the most basic reporting capabilities.
The technology already today enables us to do completely new things that just a few years ago many of us would have considered science fiction. In this profound change, HR has the potential to take a significant stake to build new work life and working practices and being part of designing new organisations. However, it requires bold vision and proactivity.
Very few executive boards still comprehend the opportunities of advanced people analytics and technologies around it. Sooner or later they will realize the potential and the question for HR is that whether they will be at that point capable to quickly enough delivering on it. Some experts have predicted that HR will fail to deliver on people analytics and therefore will be embedded to broader end-to-end business analytics, where human resources is just one element in the value chains analysed.
So, in this sense the question for the future of HR and People Analytics is that whether HR is capable to proactively define their own future around these analytics driven cognitive technologies or will the other functions take over?