HR analytics “stuck in neutral”, warns Deloitte

Profile picture for user jmilne By Janine Milne March 15, 2015
Deloitte HR study reveals dearth of analytics ability, but it’s the shortfall in the soft skills of engagement and leadership which are biting organizations hardest.

Bill Pelster 2
Bill Pelster

HR’s uptake of analytics is “stuck in neutral”, according to Bill Pelster, principal at Deloitte Consulting.

Deloitte’s annual report into HR trends reveals a yawning gap between what HR professionals and the business believe is important and the capabilities of HR to deliver what’s required.

This capability shortfall is seen across the board, from the top concerns of engagement, leadership and learning, to key HR technology issues such as analytics. The report revealed that only 8% of respondents believed their organization was strong in analytics, even though 75% saw it as an important issue.

One of the reasons behind this gap in analytics acumen is HR’s lack of skills in the area, but Pelster suggests that HR may often use their lack of clean data as an excuse for inaction:

HR doesn’t know how to use the data – they haven’t upskilled. What we hear from CHROs [chief human resources officers] is that my people don’t have the skills – the excuse to HR is that the data is dirty.

Pelster agrees that having clean master data is one of the three key issues HR need to tackle when embracing analytics. But he warns against becoming too obsessed with data cleansing, pointing out that data is never going to be sparkling clean:

Companies making progress have made the decision that data will never be perfect.

Instead, successful analytics users focus on the data they have and how to get better information out of that data (while continuously working on improving that data). They also hire someone who knows what to do with data, which leads on to the second major excuse for inactivity: a lack data scientists.

Pelster acknowledges that “data scientists are few and far between”, but does not see this as a reason to delay analytics projects. Rather than obsess over hiring data scientists, organizations should think about recruiting people from other roles who employ many of the same skills. Actuaries, for example, have about 80% of the same skills as data scientists, with experience of extracting data and sampling, observes Pelster.

The third issue stymieing analytics adoption is a lack of skills among general HR staff. According to Pelster:

If you look at a high-performing learning organization, they spend $1,200 to 1,500 a year per person. But, if you look at individual functional areas, there’s $1,500 on the business and HR is less than $100 per person – they are so busy developing everybody else, but not HR.

Attending a couple of conferences a year is often classed as training for HR staff. While those conferences may be informative, they are no substitute for learning. HR professionals require a far more systematic and targeted approach to their own development, believes Pelster.

Get stuck in

Rather than use these three issues as an excuse for inaction, the report advises HR teams need to get stuck into analytics as soon as possible, as it takes a few years to develop and absorb analytics technology.

Another area where technology is making an impact is in the simplification of work, which “goes with the digital trend”, according to Pelster. He points out that the way we interact with technology is changing: 10 years ago we all used our personal computers, today everything is app based or has an app mentality.

That means is that all the complexity is hidden from the users and this principle of simplicity is being applied to work technology. Says Pelster:

Organizations are complex, but the way they interact and do work are taking a page out of apps.

Respondents evaluation of HR and People Analytics capabilities. Source: Deloitte. Click to enlarge.

This desire for simplification leads on from last year’s report, which identified the phenomena of the “overwhelmed employee” as a key issue. It identified how employees are increasingly overwhelmed by the volume and ubiquity of messages and communication that smartphones and other technology brings.

The overwhelmed employee turns out to be the “canary in the coal mine”, points out Pelster, signalling the emphasis this year on finding ways to simplifying the workplace to reduce complexity and stress on workers.

Alongside this desire for simplification is the encroachment of automation into the lower end of white-collar jobs. Artificial intelligence to automate responses in call centres, for example, can reduce the hiring burden for organizations.

Although technology issues are highlighted in the report, the top HR concern was engagement and culture, which for the first time pushed leadership into second place. Leadership and development took the number three slot – a big jump from its number eight position last year.

There’s been a shift away from the “quantitative side” looking at systems and processes and talk about efficiency gains and infrastructure. Says Pelster:

This year it’s on the qualitative side – it’s engagement and culture and leadership and learning – soft topics.”

This emphasis on soft skills is partly due to warming economic climate, causing a shift in power to employees and away from employers. Organizations not only have to fight to recruit people with the best skills, they have to fight to hang onto them. This need to keep staff on message, “is like recruiting employees every single day,” says Pelster.

Organizations recognize they have to up their game through continuous engagement and better learning and development opportunities to keep staff.

The third global Deloitte survey, “Global Human Capital Trends 2015: Leading in the New World of Work”, was conducted among 3,300 HR and business leaders from 106 countries.

My take

The survey results reflect the changes in temperature of the economy. Economic growth means companies are keen to hire talent and that means the best people have their pick of employers.

Given the expanding economy, it totally makes sense that issues of engagement, leadership and learning and development are the top HR concerns. Companies that invest time and money in their staff will hang onto them longer.

It also makes sense that simplification of workplace (which will lower stress levels and raise engagement levels) together with what Deloitte calls “cognitive computing” – using technology to replace staff – are also key trends. Both reduce the burden on employers to find new talent.

The other key thing that comes out of this report is the gulf between what HR recognizes is important and HR’s ability to put that into action. This discrepancy can be seen in both the ‘soft’ skills as well as technological skills such as analytics and reinforces how far HR has to go on its analytics journey.

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