The slow moving progress in HR analytics
Analytics in HR are a big discussion item but their development to date is clearly still in Version 1.0 land. Some solutions are less evolved than that and some show promise moving forward.
To begin, some firms have the cheek to call a 9-cell grid that compares performance to salaries their ‘proof positive’ that they have an analytics application. I’m not impressed with that on several fronts.
First, the ‘application’ is something businesses have done for years on paper or with a spreadsheet. Second, the ‘application’ is relying on transaction data found within the HR system. I call that basic reporting not analytics. Third, the ‘application’ fails to include information from other, probably non-structured, data sources like social media.
Let’s run with this further. If I want to know who TRULY is a high performer, wouldn’t I want to look at their social relevance score/map? Could it be that the most sought after person in the firm for answers, content, etc. is someone whose boss does not recognize their total value to the company? Or, why doesn’t the ‘application’ look at what outsiders say about this employee? Is this the person that key suppliers want to collaborate with?
Analytics that only look at existing, mostly compliance or accounting transaction data, miss a lot and cannot provide real insights. And, it’s INSIGHT that analytics should be delivering.
Talent Analytics is exactly what its name suggests. They are a Boston-based firm with key personnel from the excellent supply chain analytics firm OpenRatings (now owned by Dun & Bradstreet). Talent Analytics seeks out companies that already possess lots of quantitative data on its workforce (think assessments, salary data, bonuses, social relevance, etc.).
What makes their approach different is that they do their own assessments of workers/executives and compare these insights with the HR data firms already possess. They aren't just trying to crunch existing HR and ERP data to death in the hopes of maybe/possibly turning up a new insight. No, they bring their own assessments and analytics to the mix.
They might discover, for example, that the reason some employees are less engaged, thinking of leaving, etc. is that they really are a better fit in a different position instead of the one they're in now. Most analytics products I've seen can't do that because they are simply designed to plod through pre-existing data or because the analytic tool provider lacks the imagination and innovation to build more than a tool set.
As HR/HC analytics continue to evolve, the providers of these solutions MUST bring something new and additional to the table besides a technology that just crunches data. Whether it's a proprietary assessment exam (like Talent Analytics), third party data or aggregated benchmarks, truly rich and powerful analytics are less likely to emerge with a tool that gets its data exclusively from the usual suspect data sources.
The evolution in this case comes from a vendor moving the center point of HR analytics beyond that where many vendors see it. A new perspective is essential in innovation and in seeing HR problems in a new, more informed light.
If you think this isn't such a big deal, pay heed to this: 55 consulting firms use this software at clients as it helps them complete change management, M&A integration, restructuring and other people-based projects. For a small firm like Talent Analytics to have quietly collected an impressive roster of high-end consultancies as its partners (and so early in its life cycle) is either a testimony to the power of the product or the connections of its founders. I believe it's the former.
So, when I go to the HR Technology Conference, I want to hear from vendors that are really powering through the analytics opportunities out there. I want to hear how analytics are being targeted to solve someof HR’s and business’ thorniest issues. I want to see how HR is using analytic insights to drive huge strategic advantage and outsized business outcomes. Let’s see vendors bring this to this show.
(please continue to part 4)