Lack of confidence in skills and tools stall HR analytics uptake

Profile picture for user jmilne By Janine Milne July 13, 2015
Summary:
Strategic use of HR analytics still a pipe dream for many firms, notes Fairsail survey.

HR
There’s a huge gulf between intent and action when it comes to HR analytics, reveals a survey by cloud HRMS provider Fairsail.

Only 13% of the 150 business and HR leaders surveyed felt confident they understand analytics deeply enough for it to drive business performance.

More than half said they struggled to produce business insights for their organizations.

Despite these shortcomings, almost two thirds of the business heads acknowledged analytics was important, or becoming important, to the success of the business.

It’s a mixed message, admits Paul Burrin, CMO of Fairsail:

HR leaders seemingly understand what the term means and most agree it’s important as far as business is concerned going forward. But when you start to peel that back, there’s a number of problems.

The three chief problems are a lack of confidence in having the right internal skills, tools and budget to make analytics work.

On the tools front, a paltry 6% of respondents reported they were happy with their analytics technology. This contrasted sharply with the 41% of respondents who said they were dissatisfied with their analytics tools and a further 8% who had no analytics capability at all.

Skills worry

The picture was even more worrying on the skills front. More than 40% of the leaders weren’t confident in their team’s ability to interpret and act on analytics – more than three times the number who felt happy their teams understood analytics.

This lack of confidence has clearly impacted where workforce analytics has been applied. The majority of companies were still very much on the nursery slopes, with 32% of respondents saying they used it for basic reporting, while 37% were able to provide operational analytics.

This suggests to Burrin that analytics is not being used to its full potential to solve workforce issues:

Very few are using it from a strategic analysis point of view – they are using it for day-to-day stuff, but not predictive analytics, for example.

As 15% of the respondents were still using paper and spreadsheets this lack of sophisticated use of analytics is hardly surprising. Burrin suggests this reliance on manual methods could be because HR estates are still dealing with multiple systems that aren’t fully integrated:

This is where people need to be quite careful. Not all HR systems are completely integrated. What can happen is you buy a recruitment app and when you need another process you buy another app with different databases and then there’s a problem of communication. That’s when people then go back to spreadsheets.

Having to collate information from different systems and spreadsheets is going to at best delay and at worst prevent any significant analytics activity.

No money

The third major problem with the acceptance of analytics is a dearth of funds. A sizable chunk of respondents – 27% – said they didn’t have budget for analytics. Burrin wonders whether this actually another facet of a lack of understanding of analytics and that perhaps it’s a case that companies are simply not prioritizing analytics highly enough and directing their budget elsewhere.

flying money
Again, this poor prioritization is revealed by the fact that more than 6 in 10 respondents had no plans to invest in analytics tools this year. While this could mean that they have already spent all they needed to on analytics tools, the fact that 49% claimed to be struggling with their current system’s reporting and analytics capabilities suggests otherwise.

The perceived wisdom is that CEOs are already sold on the idea of analytics as a business imperative, but Burrin believes these findings suggest that this may not be entirely accurate:

It does beg the question whether CEOs are really taking these changes as seriously as they should do.

Analytics has been heralded as HR’s ticket to boardroom success and to HR becoming a strategic powerhouse in the organization. It is encouraging that 61% of respondents did make data and analytics driven decisions on a daily, weekly and monthly basis. But that still left a sizeable minority who either used workforce analytics infrequently or not at all.

My take

While the message about the importance of big data and analytics appears to have got through to most firms, the results here suggest that many HR departments are struggling to put that into practice.

There’s clearly a lot of legwork to be done before most HR departments effectively wield analytics and big data to become the evidence-based strategic powerhouses many strive to be.

It’s concerning, but perhaps not surprising, that the findings suggest HR heads lack confidence in their teams’ abilities to deliver analytics. It points to the fact that this move to data-driven HR may require a change of staff or re-skilling within the profession.

Without those skills within HR – or access to those skills elsewhere in the business – the full business potential of workforce analytics will never be met. Analytics tools can do amazing things, but it takes a confident HR business professional to ask the right questions of the data.