Original Post from SHRM.org

By: Kathy Gurchiek

More businesses will be using workforce analytics over the next three years, especially to help with retention and recruitment, according to a new report published by the SHRM Foundation.

For HR practitioners, it will be increasingly important to understand analytics and to be able to present the findings to senior executives. In a data-driven world, organizations will establish specialist HR teams and recruit data-oriented personnel, according to Use of Workforce Analytics for Competitive Advantage, released June 21 at the Society for Human Resource Management 2016 Annual Conference & Exposition in Washington, D.C.

“Workforce analytics is transforming human capital strategy,” said Mark Schmit, Ph.D., SHRM-SCP, executive director of the SHRM Foundation, in a news release. In the foreword to the report, Schmit noted that a 2015 Economist Intelligence Unit survey found 82 percent of organizations recognize the importance of talent-related data in managing recruitment, retention, and turnover, and increasingly see workforce analytics “as a critical tool to shape future business strategy.”

“This new report can help HR and business leaders prepare for the future and leverage the power of analytics to generate valuable business insights. This new report can help HR and business leaders prepare for the future and leverage the power of analytics to generate valuable business insights.”

Organizations wanting to exploit “big data” to gain a competitive advantage are setting up small specialist teams of data analysts, training their existing staff in the use of big data and recruiting college graduates with skills in workforce analytics, according to the report.

“Executives and academics interviewed for this report consistently argue that a new-style HR professional should possess a combination of two skills—a head for analytics together with the ability to present findings in the manner and language convincing to senior executives,” the report authors noted.

The first step in getting data analysis into the HR decision-making process “is having the will to do it,” the authors said, but it’s also critical for the data to be presented in a way that is clear and accessible, if the analytics are to yield results.

Organizations seeking to effectively use workforce analytics likely will encounter some obstacles. The report offers the following recommendations for overcoming these obstacles:

  • Improve the analytical skills of the HR function.
  • Ensure data are clean, organized and ready for analysis.
  • Keep projects focused on solving key business problems.
  • Maintain rigor by not confusing correlation and causation. If data show that older sales representatives sell more than younger colleagues, for example, that doesn’t necessarily mean that age is the cause.
  • Avoid the pursuit of perfectionism in data; it can lead to procrastination. Organizations don’t need complete assurance that measurements are totally accurate before beginning a project.
  • Seek small wins initially, which can lead to bigger wins.
  • Establish cross-functional cooperation for data gathering, storage and analysis.
  • Reassure staff that analytics is an aid to human decision-making, not a replacement for it.
  • Understand the legal and ethical complexities of employee monitoring.

The report includes case studies that demonstrate “the need for senior decision-makers to embrace workforce analytics as an essential aspect of strategic HR,” the report authors noted.

The report was sponsored by IBM Kenexa, researched and written by the Economist Intelligence Unit (EIU), and published by the SHRM Foundation. The EIU is a research and analysis division of The Economist Group, a British-based global organization that is a sister company to The Economist.

The report is the latest in a series from the Foundation and the EIU, which launched a partnership and strategic thought leadership initiative in 2013, resulting in this report and the following previous publications:

• Evolution of Work and the Worker, which focused on the globalization of business, changing demographics and changing patterns of mobility and how these affect the , which focused on the globalization of business, changing demographics and changing patterns of mobility and how these affect the , which focused on the globalization of business, changing demographics and changing patterns of mobility and how these affect the nature of work and the worker.

• Engaging and Integrating a Global Workforce, which focused on how “clashes/unrest will continue to grow globally at both a societal and a corporate level.”

“We believe these reports provide important insights to help forward-thinking HR and business leaders plan more effectively for the future,” Schmit wrote in the foreword.

This research, he added, also provides “excellent background information for students and researchers who wish to study the many questions raised.”

Some of those questions include cultural and practical obstacles such as the skills gap, as well as ethical and legal questions about the monitoring of employees and job candidates in the process of collecting workforce analytics, according to the report.

“Legal rulings on the monitoring of employee behavior vary from region to region and are still in a state of flux,” the report noted. “Some view such monitoring to be beyond the boundaries of acceptable ethical practice.”

Additionally, the report suggested that some executives might fear that analytics will contradict their personal judgment; however, as they see competitors benefitting from HR analytics, that barrier is likely to be overcome.