HR and 'Big Data' – a Match Made in Heaven?

As part of the sixth Global HR Leader Series, The Chapman Consulting Group and ABB co-hosted an event in Zurich last week to exchange ideas and information on how HR Leaders are leveraging ‘big data’ in a global context in today’s business environment. The result was a stimulating and diverse meeting of minds with a broad range of industry representation from companies including Barry Callebaut, DSM, Novartis, Panalpina, Roche, Swissre, Zurich and others.

What is ‘Big Data’ and why is it Important?

Every leading business magazine has covered ‘big data’ extensively over the past couple of years, with many attempting to define what is generally agreed to be a complex concept. In fairly simple terms, ‘big data’ is a collection of data from traditional and digital sources, both inside and outside of an organisation, which can be analysed and utilised to make business decisions. In an ideal world, companies can obtain relevant information on consumers and employees, and analyse it to enable cost savings, timesavings and smarter business decision-making.

In an HR context, ‘big data’ has the potential to deliver significant efficiencies. HR analytics involves looking at a Human Resources department through an analytical lens, correlating business data and people data. HR has a number of core functions that can be enhanced by applying this analysis such as acquisition, optimisation, and even paying and developing the workforce.

Phil Lloyd, Head of Talent/Chief Learning Officer, from ABB, shared with the group how his company has started to use data and analytics to build a more integrated and effective talent management platform. According to Phil, “Data has been used to create a system whereby the business can effectively determine whether or not we have the internal skills readily available for specific needs and requirements. In theory, if we need a specific skillset in a certain location, we should know fairly quickly if we have that in-house, or if we need to find it externally.”

It’s All About Leadership

Few individuals today would argue against the importance of effective leadership as an essential component of business success, and ‘big data’ can help here too. Another HR Leader shared how data analytics had been used in her organisation to assess potential shortfalls or skills gaps when it came to crucial leadership criteria. Out of this, a refined learning and leadership strategy was created, which helped raise awareness in the business of the potential areas of risk, as well as how to mitigate this risk.

Try it Out

Throughout this Leader Series, we have consistently heard about the use of ‘test cases’ to help communicate and champion the importance and effectiveness of HR analytics. In some instances, analytics have been used on a particular project, where HR is then able to provide figures to indicate the success of the project. This has helped build an appetite for the use of data within the organisation, and has often helped HR gain further credibility as a true Business Partner.

Internal vs. External

When it comes to HR, it is far more common today for companies to be using ‘big data’ gained from within the business, as opposed to that which can be gleaned from outside the organisation. Ed Marsh, a Global Head of Human Resources with Nestlé, commented, “We are able to add much more value when we learn to better integrate external data with our own internal data.” The companies that understand this are utilising it to their advantage. When assessing a potential candidate, for example, the use of internal data, along with a combination of data gained from the interview, as well as information available externally (for example, LinkedIn), can provide a more balanced view. This currently tends to happen on a case-by-case basis, but we are talking about a more systematic approach, which will be easier to implement and should deliver more consistent and accurate results.

Not all Data is Created Equal

With all analysis, the output is only as good as the quality of the original data, and it is important that organisations have the ability to guarantee integrity and accuracy of the information obtained. In addition, it is possible to get too wrapped up in the figures, losing sight of the main priorities and issues. Maintaining a clear focus on what is important to the business is key to ensuring that relevant insights are gained.

Data Demand

At this stage, the more sophisticated HR organisations seem to be using data analytics to gain a better understanding of the key challenges of the business, the stages of the various business cycles, the macro industry trends, the maturity of the business, and ultimately the priorities and challenges of the CEO and the executive team. Interestingly, one observation came up around the fact that there seems to be an increased need for HR data from external parties, such as relevant business and community partners, stock exchanges, compliance and sustainability organisations and others. It was agreed that this trend is likely to spur the development of improved analytic tools and resulting insights.

Conclusion

All companies present were using some form of HR analytics, and it was generally agreed that there are three critical success factors in making this work for the organisation. First is a validated and methodical process for obtaining the original data. This must be followed by focussed analysis, which can be used to provide better insight and assessment from a business management perspective. Lastly, full support across the learning and leadership function, and consistent support by the business is fundamental to a successful implementation. With potential gains in the form of greater operational efficiencies, cost reductions and reduced risk, ‘big data’ and HR analytics should not be ignored.

Many thanks go to ABB for hosting an engaging discussion where very relevant yet diverse thoughts and ideas were shared, reminding us all that there are many different approaches when it comes to ‘big data’ and HR analytics.

We look forward to returning to Switzerland in Autumn 2014.