HR Analytics and Big Data

Linda Merritt, HRO Research Analyst, NelsonHall

I recently had the pleasure of moderating a webinar for HR Outsourcing Association (HROA) members on HR Analytics and Big Data on behalf of the Publications and Practices Committee. This was a natural hot topic for our group of HR service providers, advisors, analysts, and buyers as you can hardly read your email without finding a new batch of blogs, webinars, articles, and conferences on analytics and big data, including for HR.David Bernstein, the head of eQuest’s Big Data for HR / Predictive Analytics Division, and Yvette Cameron, VP and principal analyst at Constellation Research, Inc. and founder of NextGen Insights, were our guest experts and both have an extensive background and long-term interest in HR measurement and analytics. The following is a summary from our discussion with Yvette and David.

How are HR Analytics and Big Data different?

When we talk about Big Data what we’re really talking about is slightly bigger than normal but not a huge amount. There is a lot of work that still needs to be done in getting better HR metrics and measures and better ways of communicating results. By bringing in data from a variety of sources from across the enterprise and pairing it with your HR data and looking at patterns, you can start to see correlation, infer causation, and create the ability for forecasting / modeling.

Much of the work we are doing today is measuring the effectiveness of our programs using HR system data – the challenge is getting to the broader business data in order to start making correlations to business value and outcomes and to build understanding of our own employees by mining data in enterprise, productivity, and employee interaction systems.

Are HR clients ready for Big Data?

The desire is there to push beyond the wall we’ve hit with current analytics and metrics. The industry is ready for that helping hand and is looking for service providers to offer help with this.

The struggle isn’t around ‘should I’ but around ‘how do I’ in terms of where to begin. The vendor community can help bring the profession forward in terms of ‘how to make it happen.’  Right now, there is more of a consultative need to fill in missing knowledge and skills; the opportunity for the vendor community is to provide these plus ongoing services that turn the data into insightful information.

Is there a Big Data skills gap in HR?

One of the biggest hurdles and obstacles to implementing a Big Data program, second to having the budget, is the lack of expertise and skills – the HR component of any implementation program can hold companies back. HR divisions struggle between bringing these skills onboard or developing them internally.  This is an opportunity for service providers to help HR become even more strategic as they increase their skills.

The interest in HR analytics is building, but there a gap in actual buying and client abilities to leverage the new capabilities. This provides a growing opportunity for us as an HRO community to make Big Data real in HR and HRO!

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HRO – Helping HR Move up the Ladder of Business Value

Yesterday I listened to the “Prepare and Predict” webinar hosted annually by Workday and moderated by Bill Kutik, the founder of the HR Technology conferences. R “Ray” Wang from Constellation Research, Jim Holincheck from Gartner and Jason Averbook from Knowledge Infusion each offered three predictions for 2011. All three panelists are heavily savvy in the field of HR technology and while their comments were not necessarily about HRO, the overlap and relevance were significant.

So many things in HR and HRO are considered emerging trends and receiving significant coverage in the media. Sometimes the hype exceeds the reality, and that again seems to be the case with the use of social media in HR and even talent management. Yes, they are growing in both interest and use, but there are few breakthrough examples offered in case studies.

Jim Holincheck sees the use of social media making the most useful and practical progress in recruiting, and to some extent in learning. Many RPO service providers are leading in using social media like LinkedIn to broaden the net for recruiting. Making the applicant process more engaging and “warm” can also help build a pipeline of “warm” candidates.

The panelists agreed that first there needs to be a policy that guides who can do what, and then define the business expectations for any application initiatives. And don’t think you have a lot of time to figure this out. According to Ray Wang, the personal use of smart phones is already driving demand for action-oriented mobile and unified communications in many areas.

The key is not just that various new tools and technologies are present, whether in-house or via HRO, but how they are being used. A growing group will say they are using a talent management application. But the consensus on the panel was that what is really happening is basic automation, putting process elements like appraisals online. Currently, the greatest client-reported benefit of a talent management application is automation, not business results.

It is true that you have to walk before you can run and that the basic “wiring” needs to be in place. That brings me to one of my foundation principles; have an HR strategy that is aligned with business needs, designed to deliver business outcomes and including a design approach for HR technology and service delivery.

HRO buyers – it is only if you have a longer term plan and know where you want to get, and why, that you can select an ERP; otherwise, consider SaaS (as many are), determine how to balance best of breed with the need for integration, and which areas to support internally or outsource as you build a new or change out an old platform of HR systems and services.

HRO providers – show cautious clients looking to meet a few basic needs how your systems and services can enable automation and self and manager services at competitive costs, and is also ready to meet the HR needs of the business as it matures and is ready to move up the ladder of business value through HR as a strategy business partner.

Linda Merritt, Research Director, HRO, NelsonHall