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HR data analytics is exploding in use and sparking change in business

A new report by Deloitte Consulting lists nine trends reinventing the HR software market, including people analytics, continuous performance management and employee engagement.

CHICAGO -- An increasing number of companies are using HR data analytics to predict business performance, making...

it one of the top trends driving change in human capital management.

In "HR Technology Disruptions for 2017: Nine Trends Reinventing the HR Software Market," Deloitte Consulting said human resources analytics is helping companies predict fraud and detect compliance violations, identify top employees at risk of quitting and find the drivers of unplanned absences among staff.

During an interview at the HR Technology Conference and Exposition, Josh Bersin, principal at Deloitte Consulting and author of the 49-page report, said more companies are using HR data to solve business problems.

"Companies now have vast amounts of data about their employees -- a lot of times in a cloud application," he said. "Now, they can look at, 'Why do we have sales productivity gaps? Why do we have fraud? Why do we have unplanned absences? Why do we have overtime in part of the organization versus the other?'"

Explosive growth seen in HR analytics

While it has taken years to mature, people analytics is seeing "an explosion of growth" and is spurring human capital management vendors to acquire and develop the technology to meet the demand, the report said.

"HR departments realize that their future is dependent on their ability to harness people data and build predictive analytics models," according to the report, released at the HR Tech Conference.

In addition to HR data analytics, the other eight disruptions include a sharp increase in continuous performance management; real-time employee engagement and evaluation; video and high-fidelity for learning; and comprehensive recruitment management platforms that include analytics, applicant tracking and onboarding.

Software for employee wellness and for managing teams and contingent workers are three more.

Another game-changer is comprised of artificial intelligence, natural language processing and robotic process automation.

The trends are not ranked in order of importance.

Shift seen in people analytics

At the conference, Erica Volini, HR transformation leader for Deloitte Consulting, said she is starting to see a shift in the analytics markets and the focus of HR. Technology can analyze data and produce insights on its own, meaning HR can focus solely on taking action and effecting change, she said.

Software can combine HR data with finance data and external data, as well as obtain root causes of certain issues, such as retaining top talent. HR data analytics is also being embedded into all kinds of HR systems, including recruiting, engagement, performance management, succession management and learning.

"That's the evolution we are on right now with people analytics," Volini said.

The report, citing findings from a separate Deloitte 2016 survey of 7,000 business and HR leaders in 130 countries, said the percentage of companies using people data to predict business performance increased to 36% this year, up from 28% in 2015. The percentage of companies performing multiyear workforce planning jumped to 48%, from 38%.

Recommendation engines dominate new offerings

Vendors are offering new advances in HR data analytics, according to the report.

For example, Workday Inc. can recommend job changes for employees who are more likely to yield high-performance results. Oracle and SAP's SuccessFactors developed software that can recommend training for employees based on their roles and activities at work, and Cornerstone OnDemand analytics can forecast who is likely to lapse or fall out of compliance in mandatory training and certification, the report said.

Another vendor, Starling Trust Sciences, can analyze patterns of email and other communications to build networks of people who share substantial interests and who have such a high level of trust in each other that they can undertake risky joint activities.

Vendors are also buying technologies to improve HR data analytics. Workday this year bought Platfora to produce more powerful analytics; Cornerstone OnDemand in 2014 bought Evolv for big data analytics in workforce decisions; and Ultimate Software this year purchased Kanjoya, which has software for analyzing employee feedback, and Vestrics for predictive analytics.

Pulse surveys also increase

The report also found a big increase in the use of real-time pulse surveys and systems to collect feedback from workforces.

More than 120 vendors provide pulse survey tools, systems to monitor the moods of employees, assessments of culture and engagement, and other Yelp-like feedback software that encourages and allows workers to provide anonymous feedback about their jobs, the report said.

Culture Amp, Glint and TINYpulse are a few of the leading vendors in employee engagement.

Recruitment platforms become more comprehensive

Talent acquisition is also undergoing dramatic change, the report said.

A new type of platform handles all facets of recruitment, such as finding talent, marketing and branding a company, posting and distributing jobs openings, assessment and testing of applicants, video interviewing and applicant tracking.

The report singled out SmartRecruiters, Lever, Gild and Entelo as some of the top recruitment vendors.

Artificial intelligence also is operating in some new products.

HireVue, for example, makes video interview software that can listen to job applicants' voices, watch their faces, listen to pauses and determine if they are telling the truth, Bersin said. Some companies are using it to narrow applicant pools, and the software is pretty accurate, he said.

"While most of these newer companies are still small compared to ... Oracle, IBM and Workday, their functionality and ease of use is quite advanced," the report said. "This has helped them to grow quickly ... and disrupt the market."

Next Steps

Deloitte warns on HR technology spending

Deloitte report sees gilded age for HR analytics

ADP unveils new software for predictive analytics

Dig Deeper on Human Resource Management Systems

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What insights does your company gain from HR data analytics?
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Hello, As a Passionate employee (I am not a HR Leader), to be future ready and keep face with digitization, I think organizations need to focus on these three KPIs:

1) Employee Engagement (unfortunately, employee engagement levels are at a very low level - I am not getting in to the details for this disengagement here)
2) Performance management. People are looking for instant gratification and real time honest conversation/dialogue. The old system of Bell curve feed back system should be dispensed with as early as possible, as it is counter productive and it should be replaced with real time conversation, which is a win win situation for both employee and the employer.It should be fast forward

3) HR analytics. As per a recent study, we are at a very beginning stage in this area; and with raid changes in the way we work, because of digitization, using HR analytics is a must; and those organizations, which do not use HR analytics will lag behind.

Above all, to embrace the change Digitization brings (Both positive and adverse changes), we need leaders with different set of mind. As Abhijit Bhaduri, Chief Learning Office at at Wipro and Digital Trans formation Coach, has very aptly mentioned, the present "knowledge worker" will be replaced by "Relationship Worker"; and there will be a paradigm shift in the way we work from Analog to Digital.

This leaves with a question - Are we prepared for these massive changes? Are we future ready? Need your valuable suggestions/thoughts.

Regards
Chainulu
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Chainulu - Thanks for the considerate and provocative comments.

Employee engagement is critical, no doubt about that, and is something that needs to be measured and analyzed as often as possible. The more engagement, the  better the performance. What are the consequences when engagement slips? Companies know when the bottomline reduces engagement, so I guess they need to figure out if it is worth the price.

Performance management is pretty much going in the direction you describe, with many niche vendors and larger vendors offering apps for continuous performance management. I also believe that many companies will retain the annual review in some format. At the HR Tech conference, I also learned that big companies in general are sticking with ratings and even calibration in some form. Traditional performance management is not going away any time soon on a large scale.

As for analytics, many large companies are still collecting "data for data's sake," as Deloitte's Erica Volini described it. Companies get bogged down in gathering data and analyzing it and then run out of time or energy when it comes to taking action on the findings.

I don't know. It might take a few more years still for all this new HCM technology to take hold and begin showing a lot of results across the board. Many companies are just getting going on analytics, so the next few years should be telling.
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