HR and Resourcing often talk about utilizing data analytics, but are we really using them? Predictive analytics is paramount to the success of other departments such as Supply Chain and Logistics… so why not in HR?
HR and Resourcing is unique because we get to work with and have an in-depth insight into every other department. We see how accurate and efficient they are, the systems they use and their automated processes. These systems and processes allow other departments to make decisions based on facts and data.
Could you imagine asking a supply chain/production function to base their yearly plan on ‘rough’ figures they did last year? They would be laughed out of the boardroom! Most other departments are expected to base their yearly production forecasts on scientific predictive analytics, using granular detail predicated on things such as trends, current stock, material availability, future orders by individual customer and market fluctuations in order to produce an accurate plan.
So they have a plan, they set out in earnest and things work out perfectly? No, situations change throughout the year. The most successful departments (and ultimately companies) recognize that conditions are never perfect before embarking on a journey. They adapt. They fix and move on as and when it is needed.
Now consider asking your HR function to create a resourcing plan for the next year which will impact the business by millions of pounds. It will affect what every business claims are their most prized assets—their people—and be based on instinct rather than scientific data. It seems crazy, right!?
If it is crazy then why do only one in six companies use any form of data/talent analytics?
The proportion of organisations which are immature in terms of data analytics is astounding. I’m sure you’ll agree.
There are easy-to-use tools in the market that gather data and help predict talent needs, but whether its capability, culture, or fear, HR is reticent to use them. Some companies fear that the use of data analytics will replace rather than enhance the human element. Other HR functions are simply resistant to technology.
The talent acquisition function is generally one with a reactionary culture. Historically they haven’t had access to the necessary information to plan their yearly forecast, but with the right tools, HR can transition from reactive to proactive within a short timeframe.
Much like other departments, such as Production, the key to HR’s adaptation of data analytics lies in the front end of the process. While some companies invest a lot of time in the strategic workforce planning, or the three, five and 10-year plan, many overlook the one to two year plan, or tactical workforce planning (TWP). Companies are now recognizing more advantage in the TWP which enables the talent acquisition team to add more value and operate more strategically. This focus leads to faster hire times, lower cost to hire, improved job satisfaction, enhanced quality of hire and better retention rates.
With innovation in the resourcing world focusing on more unique and wonderful ways of finding talent this genuinely means companies are treating the symptoms; they’re not treating the problem. These innovations are important, but they are still used in the middle section of the resourcing lifecycle often after the horse has bolted.
This is creating a major gap and loss in functionality, productivity and profitability. True, HR is a people—not things—driven environment, so operating carefully is paramount. It may make sense to move more slowly, but it doesn’t have to stagnate.
Other functions are racing ahead and optimizing efficiency by using data analytics. However, HR has been rogue for too long. Now, HR has to be careful. If they don’t start showing some commercial awareness and savvy, they’ll be left behind while competitors with more data-driven HR departments give their businesses a competitive advantage.