Using Advanced Analytics in HR
“Companies without a people analytics capability are at a competitive disadvantage. All organisations need data and insights to identify drivers of key outcomes like engagement, productivity, and retention of top talent, as these are often contrary to the untested assumptions and theories that all too often guide critical talent decisions in HR.” Craig Starbuck, Vice President of People Analytics at Mastercard
The HR function is ripe for reinvention. Research from IBM shows that 70% of HR executives agree. Talent executives plan to double efforts to upskill their HR teams in new capabilities over the next two years. Additionally, 67% of leading organisations plan to link reward programmes with skill attainment, and 74% of leading organisations plan to invest in advanced analytics to understand the skills of the workforce.
Not only does HR have to transform itself, but it has a significant role to play in guiding the organisation through digital transformation. The function is under pressure from all corners of the organisation to deliver a people strategy fit for the digital age. Over 60% of HR leaders report pressure from the CEO to ensure employees have the skills they need in the future. At the same time, 69% of HR leaders report increased pressure from employees to provide development opportunities that will prepare them for future roles, compared to three years ago.
The role of analytics in the evolution of the HR function
In research conducted by Insight222 in 2020 into a new People Analytics Operating Model, the role of ‘Data Scientist’ had the highest predicted growth, with 57% of companies surveyed predicting an increase in headcount. This suggests a shift to undertaking more advanced and sophisticated analytics.
The Data Architect/Dashboard Developer role, on the other hand, is stabilising. While 58% of the firms surveyed state that they currently have this role, most companies surveyed (72%) predict either no growth or a decrease in headcount in this role. It is interesting that 42% of companies surveyed don’t have this role, indicating that they have either migrated basic data/dashboard work elsewhere in the organisation or automated it. This cements the idea of people analytics decreasing investment in tactical and operational analytics.
How to move from data to insights that drive results
Consider the eight-step model for integrating advanced analytics into people projects and decision making in HR. It is critical that organisations do not jump straight to analysis, or to adopting the latest technology, without understanding the business problem they are trying to solve.
While step four covers advanced analytics, there is a critical stage before this: framing business questions and building hypotheses.
Another way to consider the context surrounding Advanced Analysis is to understand the value chain that all people analytics projects should operate along:
Advanced analytics does not happen in a vacuum. It must be guided by client drivers – business strategy, stakeholder challenges and HR strategy – and it must result in business outcomes – commercial value, improved employee experience and organisational change.
How can HR use advanced analytics in their People Projects?
With an understanding of the context of advanced analytics within a broader process that delivers business value, we can take a closer look at exactly how to use advanced analytics in people projects.
While excel is an important tool that serves a clear purpose for data analysts new and advanced, it can start to buckle under the pressure of large datasets or importing data from multiple data sources. Doing multiple statistical tests in excel can also be challenging, which is why it’s important to explore how you might move from spreadsheets to scripts to analyse your data.
Other tools popular amongst HR professionals for conducting advanced analytics are RStudio, python, Tableau and SPSS. R is often recommended as a great place to start as you move away from excel.
R is a great tool to leverage for statistical analysis and has the ability to cope with large datasets. Unlike Excel, R allows you to visualise data in a wider variety of ways leveraging a wide variety of different packages. In this Tech Bite Adam McKinnon walks you through the steps to getting started with RStudio, exploring how to set your environment up, import data and arrange your projects.
“There’s not a golden standard for analytics work and in the end it’s a question of capability, cost, and even more so preference. My recommendation to someone just starting down this path would be to take a look at R.” Richard Rosenow, People Analytics Business Intelligence & Solutions at Nike
The challenges advanced HR analytics can solve
A great example of applying R in HR comes from Facebook, who shared a detailed presentation about a number of challenges that they deploy R to solve, including:
Suggesting peer reviewers during performance review season
Setting up optimal teams within a company
Optimising seating charts for maximum productivity
Automatically filtering internal feeds of employee to deliver personalised content to each employee
Suggesting new colleague interactions (based on second-degree connections) that may be useful to one’s work
Giving managers more insight into their employees’ interactions
We have a wide variety of online HR certifications that aim to support you in building the skills you need to get started in leveraging advanced analytics. If you’re looking to get started and use advanced analytics to analyse your HR data take a look at our Tech Bites, they provide you with short, sharp, technical how-to videos that help you build practical skills and knowledge that can be applied immediately on the job, so that you can work smarter not harder.
ABOUT THE AUTHOR
Caroline Styr is the Research Director at Insight222. She is a thought-leader, researcher and writer on people analytics and the future of HR. Prior to joining Insight222, she worked at the Center for the Future of Work where she was an advisor and in-demand speaker on topics related to the future of work. She has also held roles in digital services and transformation consulting at Cognizant. Contact Caroline at caroline.styr@insight222.com