Saturday, 16 December 2017

HR Analytics : The next BIG thing

Article by : Prof. Padmavathy Dhillon, Assistant Professor, Calcutta Business School, Kolkata

Over the years HR has gained bad reputation in organization as the function that generates only expenses and has little or negligible effect on the organization’s performance. While in reality HR is one of the prime areas that have a major bearing on the performance of any organization. In order to fix this misconception regarding HR in the minds of employees of an organization, there is a pressing need for HR function to demonstrate its real worth by showcasing the worth of the value delivered by its services. As of now there is a dearth of means via which the real impact of the human resource activities could be assessed.

Human resource need to go beyond the usual qualitative and subjective measures like “least likely” “good”, “most preferred” etc. Jac Fitz- Enz, a well-known human resource expert, suggested that its high time that HR learn how to speak in quantitative and objective terms i.e. by making use of numbers to indicate the value addition done by the HR function. Other functions like marketing, finance, operations have been quite ahead in embracing numbers or to be more precise in using “analytics” to depict the value delivered by their verticals. HR is the only function that is lagging behind despite having access to a huge repository of employee data. With the widespread popularity of big data and ubiquitous demand of analytics everywhere, it has in fact now become a necessity for human resource to take a plunge in this direction.
People analytics can be defined as the application of mathematics, statistics and modeling to employee-related data to investigate and predict patterns. People analytics, also known as HR analytics or talent analytics and in some cases work-force analytics, is analysis that is used to make better and informed decisions with regard to all facets of HR strategy in order to improve business performance. The use of HR analytics can be varied; HR analytics has been used in predicting the accurate future demand of staff in organization or improving the levels of employee satisfaction by finding the reasons behind their dissatisfaction, performance measurement, compensation etc. By all this means, HR analytics tools help organizations in aligning their strategic business goals with HR metrics.

Google - one of the most successful organizations of recent times has taken the help of people analytics to create a way to achieve corporate greatness. The main tenet of “people analytics” approach is that in order to achieve superior performances it is imperative for managers to make accurate people management decisions. Accurate people management decisions are made when you hire top talent and provide them with adequate data. Till now all the functions except HR make extensive use of charts, graphs and data to complement the claims and proposal put forward by them. HR, on the other hand, pays more attention to trust and relationship building rather than data. Relationships can be considered as the exact opposite of analytical and quantitative frame of decision-making. Google’s incredible performance can be credited to the fact that they are the only company in the world to drive its HR function via data. Google’s success is an indication to other firms to consider the use of HR analytics to improve its employee productivity. People analytics have helped Google in producing remarkable workforce productivity results i.e. on an average, each employee generates nearly $1 million in revenue and $200,000 in profit each year. The fundamental key to Google’s people analytics team’s success lies in the presentation phase rather than in the analysis phase. By making apt use of data; the team is able to logically convince its highly analytical audience to accept its recommendation rather than demanding or forcing managers to accept it.

Thus, it can be said that any company that is aiming to improve its productivity by manifold in this competitive 21st century should immediately start paying attention to the next BIG thing of this century- “HR analytics”. The organization must also ensure that its HR professionals become adept in working with numbers else that time is not far when soon both the organization and the HR professional skills will become obsolete because other organizations and their professionals were quick to embrace this change.

“How Google Is Using People Analytics to Completely Reinvent HR” by Dr. John Sullivan at
“The New HR Analytics - Interview with Dr. Jac Fitz” by Mihaly Nagy at

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