5 Ways HR analytics Is Impacting Talent Management
The way we manage people has changed. HR departments are often pressured to become more data-driven and this has an impact on day-to-day activities. In this article, We will discuss the growth of people analytics and the five major ways analytics is impacting the way we manage people.
The rise of People Analytics
In the past three to five years, HR analytics has made a spectacular entrance in the HR space. Data analysis is seen as a crucial addition to the traditional ´gut-feeling’ that characterized HR professionals. For a lot of them, the main reason they went into HR was that they would describe themselves as people-persons who want to work with people and help them in their work.
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However, in this day and age where machines are learning faster than humans – and often outperform people in decision making – the call for a data-driven approach that complements this gut-feeling has become increasingly stronger.
Deloitte’s 2017 Global Human Capital Trends Report shows that in the US 76% of respondents rate people analytics as important or very important, in western Europe, this percentage lays around 67%. These numbers become even more convincing if we realize that this sample also includes smaller sized companies for which people analytics is seen as much less important.
People analytics in practice
One of my favorite examples of the impact of people analytics is an often-replicated study on the impact of someone’s name on the chances of being invited to an interview.
In a recent experiment, Inside Out London sent 100 CVs to different organizations from two candidates, “Adam” and “Mohamed”. Adam was offered 12 interviews, while Mohamed was offered four. A similar experiment in 2004 showed that “John” and “Jenny” were 2.5 times likelier to be invited than “Nassar” and “Fatima”, even though they had the same CVs. In line with this research, Muslims are 76% less likely to be employed than their white Christian counterparts according to the University of Bristol.
I find it hard to imagine that this is because of a conscious effort of recruiters to select people with white names. With maybe one or two exceptions, I think this is more likely to be due to other reasons. Recruiters scan a resume for less than 10 seconds on average. I think the recruiter unconsciously sees the name and falls victim to a mere-exposure effect bias where people tend to have a preference for the things they are familiar with. Adam is just more likely to be in the same ingroup as the predominantly white recruiter.
The only way to discover these discrepancies is by running the numbers. We feel like we’re equal employers but only when we look at the numbers, we see that it may be different. This is what people analytics is all about: checking if we really reach our goals or are failing in the process.
As a side note: branding yourself as an equal-opportunity employer to solve this may have the opposite effect. This reduces resume whitening behavior of minorities, a practice where they brand their resume to comply with the ‘white’ norm which increases their chances on the job market. When an employer brands itself as an equal-opportunity employer, minorities engage less in resume whitening, subsequently reducing their chances to be hired. Again, the only way to check this is by doing the analytics.
Implications of people analytics for HR
So what are the implications of people analytics for the HR function? As adoption increases, the impact is growing every year. Here are 5 ways people analytics will impact HR.
HR analytics will make the HR function more strategic. The goal of people analytics is to see how business outcomes can be improved by changing people management practices. People analytics is therefore inherently strategic and data-driven and will, therefore, impact how we attract, hire, evaluate, promote, and fire people.
Analytics requires a data-driven mindset for HR professionals. Access to data and analytics changes the role of the HR business partner. Traditionally, the business partner followed the manager’s input. This could involve very operational activities. For example, I’ve spoken to business partners who were asked to create a list of birth dates for the manager to keep track of. Instead of making birthdate lists, they can now proactively look at the data and identify the people problems that the manager is facing. This changes their role and also increases the demand for HR analytics courses and other tools to build analytics capability.
The data going into the systems will become more important. HR data is notorious for its data quality. The data going into the systems become increasingly important as it is now used for analysis and forms the basis of informed decision making and action. This requires system administrators to design better systems with a lower risk of errors and makes the administrative roles in the HR department more important.
HR analytics will impact the tools we use. Analytics enables the optimization of talent management. Every step in the employee journey can be analyzed and optimized. This involves measuring how we attract, manage, and promote talent. This will change how we deploy our HR tools as they will have to aggregate data from each step in the talent management model.
People analytics changes HR by busting long-held beliefs. As we saw in the example that we started with, people analytics will challenge long-held beliefs. For example, a fast-food company that I worked with a few years ago was actively hiring people that had quit the company earlier. They were hiring them because they thought these people would require a shorter onboarding time and would stay longer because they already knew the work. However, after some analysis, the people analytics team discovered that the reason for termination was not checked and that people who were fired for fraudulent behavior were hired again – only to stay a much shorter time than the average hire. By sharing these insights, the recruitment team was able to make better hiring decisions.
These are some of the ways data-driven analytics will impact our HR best practices and the decisions that we make. The good news is that data analytics will not drive away the human factor in HR – and we will still need people-persons to know what is happening in the organization and to implement these results with compassion. However, the geeks have arrived in HR and this requires all of us to change at least a little bit.