The
ability to capture and analyze big data has enabled many enterprises to both
increase revenues by better understanding and more accurately targeting
customers and cut costs through improved business processes.
Big
data also has attracted the attention of human resource managers who now can
analyze mountains of structured and unstructured data to answer important
questions regarding workforce productivity, the impact of training programs on
enterprise performance, predictors of workforce attrition, and how to identify
potential leaders.
With
so much at stake, you'd think more enterprises would be trying to harness HR
analytics for talent identification, recruitment, development, retention, and
workforce planning. But according to a 2013 survey by talent analytics software
vendor SHL, more than three-quarters (77%) of HR professionals are unable to
determine how their enterprises' workforce potential is affecting the bottom
line, while less than half (44%) use objective data regarding talent
performance to guide business decisions.
Even
worse, too many are failing to use data analytics to identify and groom future
stars. CEB, a member-based enterprise talent and process advisory firm, on Monday said
that "more than two-thirds of companies are misidentifying their
high-potential employees, jeopardizing long-term corporate performance."
So
how can enterprises leverage HR data analytics to make strategic personnel
decisions? First, they'll need software, which isn't hard to find. Huge vendors
such as Oracle, IBM and SAP compete with more specialized players such as Peoplefluent, Talent Analytics and Evolv to deliver HR analytics software
as a service.
Determine your goal
Choosing
an HR analytics SaaS vendor, however, comes second. First it's important to
determine what you want one for. If it's for something relatively specific,
it's probably best to focus on smaller vendors, who not only likely would cost
less, but would be more likely to customize solutions for clients.
And
how specific can you get? Here's just some of what enterprises can learn from
HR analytics software:
- Recruitment cost per hire
- New hire failure factor
- Employee turnaround rate
- E-learning abandonment rate
- Bonus compensation rate
But
if you're in the market for a comprehensive workforce management platform,
large vendors such as SAP, Oracle and Big Blue are options. SAP, which
purchased "human capital management" SaaS vendor SuccessFactors in
2011, offers separate platforms for workforce analytics and workforce planning,
while Oracle offers several workforce management platforms such as Talent Management Cloud,
Human Capital, HR Analytics and Peoplesoft Human Capital Management.
As
with all cloud services, it's important to make sure that your SLA includes
minimum performance guarantees.
Finding analytical talent
Buying
HR analytics software as a service won't help at all if nobody in HR knows how
to mine and interpret data. Unfortunately, human resources has never been a
hotbed of metrics junkies and numbers freaks, and while partnerships with IT
can help, HR departments without analytical talent in-house are at a
disadvantage.
Some
larger enterprises are addressing this HR analytics talent shortage by hiring data scientists to work in (and sometimes head)
human resources. General Motors recently hired as its head of global talent and
organizational capability a visiting scientist at MIT Media Lab who holds a
Ph.D. in engineering and a Six Sigma black belt. Michael Arena will not likely be asking new hires at GM to fill
out job applications on their first day of work.
Not
all enterprises have the wallet to hire a top-level data scientist for HR.
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