Building analytics capabilities in the HR function
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As a keen observer and follower of the developments in the “people analytics” space, it is very nice to see how the capability is gaining traction. Kudo’s to the likes of Jonathan Ferrar, David Green and all the others who are spearheading this; they really move the needle. We are still in the early stages of truly developing a people analytics capability, we now have the first “classic” maturity tools, assessing where we are and how the aspiration level looks, we are getting good examples and use cases. We also witness more and more companies who want to invest in building analytics capabilities in the HR function.
In the context of these developments, we want to add a few additional perspectives on the evolution. At KennedyFitch we have been researching, writing, publishing and teaching about the Future of HR in the last few years. And through our conferences, masterclasses, executive search and consulting practices, we have gained additional insights that we love to share with the community.
Who owns the data?
We have all been witnessing the debate about the data-hungry giants like Facebook and others and most of us are (reasonably) upset about them making money with “our data”. We expect that a similar debate will appear at some point in time inside organisations. Actually, the underlying “revolution” in organisations is, that we gradually move from top-down towards a more bottom-up and grassroots/crowdsourcing development of people interventions. Employee Experience is possibly the best expression of this; step by step, we acknowledge that it is no longer the most senior leader at the top who should decide what is good for us. Gradually, we will step away from the classic HR interventions like 9-boxes, performance management, succession planning, competency models and the like. They were all designed for a relatively stable top-down organisation.
In the context of employee experience, we start thinking in journeys, in touchpoints, in moments that matter, we start design thinking, we start involving our employees in the design. This essentially means we are moving from “vertical management of people ” towards “horizontal distribution of work”. And this requires different management practices; we no longer “own” the data, we now start “sharing” the data. The crucial transition in the future of work is NOT to build up a people analytics capability that continues to work in the old management paradigms. The future capability is all about designing “employee centric” interventions in partnership with the people who work with us. In other words; you don’t do people analytics “to” people, but you do it ”with” the people working with you.
90% of the necessary data for people analytics sits outside the company
At this stage of development, the data that the people analytics function has access to tends to be quite limited. They will know your name, date of birth, education, some performance ratings, salary, plus a few other important, but less useful data. What the analytics people really want to know, is “everything about you”; how you feel about things, what you think of the company, what drives your engagement, how you are being perceived by colleagues, customers and leaders, all the personality profiles that you have completed throughout the years, access to your LinkedIn, Facebook and Instagram profile.
Unfortunately though, the people analytics team typically do not have access to this and our legal context puts even more constraints on this with the introduction of GDPR. How can a people analytics function deliver insights if we do not make the necessary data accessible to them? How can we expect them to tailor development to our personal needs if we keep them in the dark about what we truly value? How can they help a leader build a team with complementary capabilities if the basic dataset is missing?
The people analytics function needs to start building a trust contract with the individual worker to get access to data as, unfortunately, still, most of us don’t feel well handing over data to an anonymous company. Most of us find it totally normal however that the supermarket understands our buying behaviour, that an airline knows all about our flights, that the credit card company knows everything about our spending. We excessively share data online, because we hope that they will get better and better in tailoring services to our personal needs.
We believe we need a shift in mindset in people analytics and move gradually from a corporate mindset to one that is focused on helping individuals and in that context, it is our guess that most of us would be more than happy to share data. In the employee – employer equation – the dependency and the dynamics of data all depend whether individuals personally experience improvements – faster development, greater employability, better performance or team dynamics, higher personal engagement or fit with the company. They need to understand the immediate relation between these and the data sourced. It is a massive change management undertaking and capability that often does not sit within the analytics team
Analytics and the flexible workforce
At this point in time, we live in a world where most of the people working for us are “on the payroll”. It is still the dominant form how we organise work; we combine pieces of work together into a job, we staff these jobs mostly fulltime with people and most of them actually work on our premises. With technological advances and the rapid explosion of the “gig” economy, we will witness over the years to come to a very rapid growth of the “off-payroll” worker. Most companies do not collect any data on this increasingly larger portion of the workforce and if we believe that “this” is going to stay, the people analytics function will need to find ways to get access and include them into their overall efforts. More and more teams will interface with off-payroll employees and while we typically include all the on-payroll employees in our engagement surveys, pulse survey and the likes, we tend to ignore this important stakeholder group. And this is partly because most of us have grown up in an environment where all the employees were on-payroll and most of the HR interventions were designed for the classic organisational model with little to no external workforces. We believe that the blended workforce needs to be totally integrated into the efforts of the people analytics function. Working with the data of this workforce is an essential ingredient to understand “how the workforce ticks”
With a few exceptions, the best analytics people don’t want to work in HR
IBM (100+ people on analytics) or Google (one-third of their HR team is in analytics) or any company with a comparable size or progressive HR function will have no issue attracting the kind of capability they need to continue building muscle. If a company starts, is smaller or has less of a reputation, it will be much more difficult to attract the right kind of talent. At this point in time, almost everybody is looking for this scarce talent. We believe that the market for people analytics talent is much bigger though. There is an enormous talent pool in analytics sitting outside HR. We have done several search projects in the last 2 years in this space and we have time and again seen that great analytics talent is not necessarily drawn towards the HR function. They would be very interested though to work on people analytics, but they like to sit with others in analytics, make a career in analytics and do not necessarily feel the need to be held “captive” in HR. We recommend companies to build the people analytics capability as part of a function where most of the analytic talent is residing, this typically is in marketing or finance, and have them then work on integrated people analytics challenges. We believe this is anyhow a promising development as employee experience will require an increasingly close cooperation between HR, IT, Marketing, Communications and Facilities