A guide to HR analytics
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Confusion about the relevance of big data to human capital management (HCM) analytics runs high: What is big data when applied to the workforce? Can we achieve big data advantages using only internal data? Do data privacy concerns outweigh the potential benefits of workforce analytics?
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For many HR leaders, getting to big data analysis seems a distant target, as current workforce analytics initiatives yield only moderate results for meaningful insights. Consider the recent findings by talent assessment provider SHL, which surveyed nearly 600 global HR professionals and found that fewer than one quarter of organizations have a clear understanding of the potential of their workforce and less than half of them use talent data to make business decisions.
Perhaps HR leaders just need an example of a business function that has embraced big data analytics and can serve as a model for their workforce analytics campaigns. Read on to find out how the marketing department can provide that example.
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Today's workforce analytics are largely based on data housed in HR systems that manage performance, development and career data and actions. Many organizations augment this relatively limited data with periodic employee engagement surveys, but such approaches can be challenged by issues such as survey quality, point-in-time snapshots and the inherent bias that comes with asking employees to respond to workplace surveys using tools provided by that very workplace. Can the results really be trusted?
Additional data from across the organization can and should be correlated with workforce data to drive better insights, including data from financial, project and customer support systems and other enterprise applications, as well as external data such as salary surveys, benchmarking data and social activity. Internal systems can also include the various communication channels including email, IM, voice and connectivity, but most organizations elect to keep analysis of these interactions siloed, if they're analyzed at all. At a time when we can potentially know far more about our employees than ever before, our internal vision remains limited.
What HR can learn from its CRM counterparts
Meanwhile, our external vision -- that of understanding of our customers -- has never been so clear. Significant advances are being made in customer relationship management (CRM) tools for deciphering meaningful signals in the noise of digital communications, driving significant organizational investment. Worldwide CRM software revenues are projected to exceed $15 billion this year with Software as a Service (SaaS) social analytics applications among the fastest growing areas. By applying the Four Vs of Big Data to their CRM approaches -- leveraging large Volumes of data for large-scale analysis, incorporating a Variety of data for correlations and insights, mastering the Velocity of data for right-time and contextual results and getting to the Veracity of data for reliable results-- chief marketing officers (CMOs) are emerging as powerhouses in this new data-driven paradigm.
Why reserve such intensive focus for customers only? The growth in social and cloud analytics in CRM suggests there is a clear and compelling opportunity to apply a similarly intense focus to the workforce. Keeping in mind the lessons learned from CRM counterparts, HR leaders could likewise emerge as powerhouses for internal insights, driving objective, and talent-based decision support. Consider the following examples of CRM practices and their applicability to HCM:
- Social monitoring and sentiment analysis refers to analyzing the data flowing from social media channels and customer support sites to infer perceptions of brand and products. It can also include analysis across email, surveys and even Voice over Internet Protocol (VoIP) or telephone conversations to determine customer sentiment and address customer issues or, analyzed in aggregate, enable predictive modeling and trend analysis.
Applied to HCM initiatives: Monitoring the social and communication channels of the workforce is equally important in identifying emerging risks and opportunities stemming from employee sentiment. By correlating this information with other HCM and enterprise data, companies can develop new insights into top performers and identify new success profiles. For example, a large electronics distributor adopted sentiment analysis tools for its internal workforce and was able to correlate top performance with email responsiveness and sentiment -- top performers sent 50% more email externally, responded 40% faster to clients and sent messages with 55% more positive tone than the bottom tier.
- Social transaction and influence analysis. Connected customers have many ways of demonstrating support and loyalty to a company's brands, products and services. They may engage with others in an online community, share feedback on a company's brand fan pages or post images, videos, and tweets via social media channels. Each of these serves to accelerate and deepen the customer's interactions with the organization. Analysis of these transactions can also point marketers to brand ambassadors and other key influencers.
Applied to HCM initiatives: The volume and variety of contributions to an internal social networking tool point to levels of employee engagement. Transaction analysis will provide the organization with usage, adoption and trending patterns and identify critical workforce influencers and detractors, where proactive management of the relationship and sentiment might be warranted. Leveraging key influencers in internal communication campaigns is an effective strategy for amplifying messaging, training and other initiatives. New candidates for succession planning and leadership development can also emerge when social influence data is correlated with workforce goals, performance management metrics and other talent data.
- Social campaigns and marketing automation in CRM involves brand advertising, content-based campaigns, engagement and communication paired with the results of social monitoring, transaction analysis, community trending and other analysis.
Applied to the employee lifecycle: Social campaigns are becoming the way we more effectively source and engage with future employees. Engaging individuals with positive company sentiment, for example, is a good first step in developing high potential candidates. Organizations can also aim campaigns internally to improve employee engagement, collaboration and development with the content driven by internal and external data analysis. This is especially evident in talent sourcing, where recruitment marketing automation is used for purposes such as pushing real-time job openings to candidates through social media channels, with responses from all channels aggregated and analyzed to provide a 360-degree view of candidates, which can improve the visibility and tracking of candidates.
- Predictive analytics enable companies to anticipate customer response to new marketing initiatives or relationship triggers (such as contract renewal) based on a wide and deep analysis of previous behaviors and current buying patterns.
Applied to the workforce: Predictive modeling can help organizations understand the impacts of compensation and performance actions, reception of new messaging and so forth.
- Intention vs. action. Today's marketing automation platforms provide the real-time monitoring and analytics that is necessary to separate customer intention from action.
Applied to HCM: Analysis of communications via social channels, internal activity streams, IM and others, coupled with employee achievements and progress against tasks, goals and other work management tools can yield more predictable performance.
So why aren't we doing more of this in our HR practices today? Because in most cases, HCM-specific technologies have not evolved to capitalize on these lessons from CRM. Certainly, we have candidate relationship management and have expanded big data analytics on the recruiting side, but this is just the first step. Until the technologies emerge to extend what has been learned from CRM into workforce analytics operations, we will continue to make business decisions and strategic plans with an incomplete understanding of the very workforce we depend upon to execute those strategies.
About the author
Yvette Cameron is vice president and principal analyst at Constellation Research, Inc.