From information to insight

With ever-increas­ing dynam­ic busi­ness needs, an organisation’s work­force needs to be change-ready to be able to take on new ways of work­ing.

Exec­u­tives expect, on aver­age, they will need a 20 per cent improve­ment in per­for­mance over and above cur­rent lev­els to meet their busi­ness objec­tives. More­over, the vast major­i­ty of com­pa­nies will have to realise these gains by rely­ing on their cur­rent work­force – not by hir­ing more employ­ees.

Yet there is a prob­lem here. Some 80 per cent of employ­ees CEB sur­veyed say their work­load has already increased over the past three years and 55 per cent say they can­not han­dle the lev­el of stress asso­ci­at­ed with their job for much longer, even as things stand.

Organ­i­sa­tions there­fore need to eval­u­ate their exist­ing work­force and iden­ti­fy gaps in the tal­ent pool, as well as assess like­ly future require­ments. Lead­ers will need to con­front dif­fi­cult real­i­ties and ask them­selves two crit­i­cal ques­tions: can we achieve our busi­ness goals with our cur­rent staff and capa­bil­i­ties; and is our exist­ing tal­ent base ready to become our next gen­er­a­tion of lead­ers?

For those in HR and tal­ent man­age­ment, these are par­tic­u­lar­ly time­ly ques­tions made more chal­leng­ing by an absence of reli­able data. Despite sig­nif­i­cant invest­ments in “big data” tools, HR lead­ers are still not able to gen­er­ate insights for busi­ness part­ners that are deemed trust­wor­thy or use­ful to their tal­ent deci­sion-mak­ing process­es.

Even where data exists, many organ­i­sa­tions are either fail­ing to use tools effec­tive­ly or not using them at all when they make crit­i­cal human-cap­i­tal deci­sions. CEB data shows around 75 per cent of staff deci­sions are still being made based on gut feel­ing and instinct.

Fram­ing the poten­tial impact of HR ana­lyt­ics is crit­i­cal. Organ­i­sa­tions that are real­ly good at both ana­lyt­ic sophis­ti­ca­tion and busi­ness appli­ca­tion can expect to see a 6 per cent improve­ment in gross prof­it mar­gin, which trans­lates into an $18.9‑million sav­ing for every $1 bil­lion in rev­enue, accord­ing to CEB’s research.

Com­pa­nies that are able to turn their infor­ma­tion into insights are focus­ing on improv­ing the judg­ment of their peo­ple and how they apply what they learn from data to busi­ness con­cerns

“HR ana­lyt­ics play a vital role in impact­ing busi­ness out­comes for grow­ing organ­i­sa­tions,” says Eugene Burke, chief sci­ence offi­cer at CEB. “The abil­i­ty to analyse greater vol­umes of com­plex work­force data and trans­late into mean­ing­ful met­rics, which answer cru­cial ques­tions for busi­ness part­ners, can’t be under­stat­ed. It is a must-have for organ­i­sa­tions that want to remain com­pet­i­tive in today’s work envi­ron­ment.”

Nev­er­the­less, only 44 per cent of HR pro­fes­sion­als use objec­tive data to make deci­sions around the tal­ent agen­da, while just 24 per cent feel they have an under­stand­ing of the poten­tial of their work­force. Only 41 per cent use assess­ments to iden­ti­fy high-poten­tial employ­ees – an area in obvi­ous need of improve­ment giv­en organ­i­sa­tions’ remit to gen­er­ate max­i­mum pro­duc­tiv­i­ty from the work­force.

Clare Mon­crieff, senior direc­tor at CEB, says a major issue is that many organ­i­sa­tions feel the HR data they have is not rel­e­vant. “HR is still grap­pling with its abil­i­ty to pro­vide strate­gic data to the busi­ness on its work­force and is ill-equipped right now to take advan­tage of big data,” she adds.

Encour­ag­ing­ly, though, there is a wide­spread recog­ni­tion of the need to improve. Some 74 per cent of organ­i­sa­tions say they want to bet­ter their tal­ent man­age­ment capa­bil­i­ties, while 95 per cent of senior HR lead­ers intend to increase invest­ments in data over the next two years.

But Ms Mon­crieff warns that there is a dan­ger organ­i­sa­tions will feel the need sim­ply to increase the lev­el of ana­lyt­i­cal sophis­ti­ca­tion or tech­nol­o­gy they apply to data. “Those are not bad, but they’re not the high­est-impact­ing ele­ments,” she says. “Com­pa­nies that are able to turn their infor­ma­tion into insights are focus­ing on improv­ing the judg­ment of their peo­ple and how they apply what they learn from data to busi­ness con­cerns.”

As organ­i­sa­tions look to the future, there is greater demand for qual­i­ty and trust­ed data. “HR ana­lyt­ics is increas­ing­ly cen­tral to all the work HR lead­ers are doing, espe­cial­ly engage­ment, suc­ces­sion and per­for­mance man­age­ment,” says CEB’s Mr Burke. “Organ­i­sa­tions that are increas­ing their ana­lyt­ics impact are see­ing sig­nif­i­cant out­comes in all those dis­ci­plines.”

Mr Burke says that a lead­ing organ­i­sa­tion in this area can expect to see dou­ble-dig­it improve­ments in crit­i­cal tal­ent out­comes, such as employ­ee per­for­mance, qual­i­ty of hire and engage­ment – returns that may be the dif­fer­ence between pros­per­ing and fail­ing in today’s eco­nom­ic cli­mate.