Many organizational functions such as Marketing, Supply Chain and Finance are becoming increasingly sophisticated in their use of analytics to inform decision making and are seeing clear benefits in terms of business outcomes. With the abundance of data about people in organizations, it stands to reason that the Human Resources (HR) function could similarly benefit. Using analytics to extract and apply insights about the workforce is one of the biggest opportunities for HR, but is it an opportunity that is being realized? The IBM Smarter Workforce Institute commissioned new research to find out to what extent workforce analytics is being used today, and what unique factors enable or inhibit the application of analytics in HR.
The study uncovered several factors that contribute to the increased focus on analytics by HR professionals:
The need for workforce analytics
Overall, there is growing recognition that some business problems simply require a people solution and a number of organizations are already actively embracing the potential power of workforce analytics. Another study, conducted by the IBM Center for Applied Insights, identified a group of organizations – given the name “Generation D” – that are driven by analytics.
The Center’s study “Inside the mind of Generation D” found that these businesses are driven by analytics. In fact, Generation D enterprises are 2.9 times more likely to use predictive analytics to inform most processes and decisions.
Beyond these organizations at the forefront of analytics adoption, it appears the HR function is not universally so advanced in its analytics journey. The IBM workforce analytics study revealed wide variation across organizations. While many seem reasonably comfortable with basic reporting and benchmarking (data challenges not withstanding), many organizations appear to be at an early stage in their workforce analytics journey.
The good news is, HR professionals starting out along the analytics journey can learn from their peers who are further along. Several capabilities were identified as necessary for success, including building analytics roles and skills, having the right tools and technologies, and maintaining focus on data security and privacy. This is critical when dealing with people data, as it is essential for maintaining employee trust in the organization.
Finally, it is of utmost importance not to lose sight of the “human” in Human Resources data analytics. Workforce data is fundamentally about people and decisions informed by data analytics will affect people as much as processes. Organizational leaders will be well served to keep that in mind. As people data become increasingly available and accessible, and as the analysis of those data becomes easier and easier, it is important to recognize the value as well as the limitations of analytics. The true value of workforce analytics lies in its ability to better inform decision makers, it is not about removing the human from the decision making.
To learn more, download the study “Unlock the people equation: Using workforce analytics to drive business results”
- IBM Smarter Workforce Institute and IBM Smarter Workforce
- IBM Institute for Business Value (IBV)
- Inside the mind of Generation D: What it means to be data-rich and analytically driven (IBMCAI study)
- Active employee participation in workforce analytics: A critical ingredient for success (IBM SWF study)
- Other workforce related posts on the IBMCAI blog