While data related to payroll, performance, compensation, productivity and other aspects of HR is often used to take the pulse of the workforce, when reviewed with the right perspective and integrated properly, it can reveal new insights and empower HR executives to be more strategic contributors to the business.
HR has always used broad metrics, but traditional HR data analysis has focused primarily on looking at a data set from only one perspective. For example, payroll data was reviewed to understand a company’s pay landscape.
However, HR data has the potential to be much more predictive, especially given four important evolutions that have driven the rise of big data in HR:
• The adoption of unified and integrated global HR systems. As companies have globalized, they have realized the benefits of a single, unified HR system that integrates various HR processes on one platform.
• The demand for self-service. With employees handling more of their HR data input through self-service technologies, there has been a steep increase in transactional HR data.
• The convergence of mobile, social and cloud. HR data is now more accessible, traceable and measurable than ever, providing greater opportunities for analysis.
• The application of predictive analytics. The first wave of automation in HR happened in the 1990s, giving companies the ability to predict the future based on historical patterns.
The use of big data empowers HR to view its existing data through a new lens. By combining various types of data — macroeconomic parameters, global payroll information, reward industry averages — and looking at them through a historical lens, HR executives can make more informed decisions.
For instance, if a company is interested in determining the talent makeup of its best-performing geography, HR executives could combine data regarding the workforce makeup, the win rate of given locations and overall productivity to better determine what mix of employee skills and levels yield the best results. In other words, where traditional HR data analytics provided a two-dimensional view of a business, big data offers a multidimensional perspective.
Making Big Data Actionable
As HR executives seek to turn mounds of diverse and disparate data into tools for greater business insight, it’s important that they be aware of the considerations for leveraging big data:
• Start with the right questions. One way to determine what questions big data can address is by reviewing corporate and HR key performance indicators (KPIs) such as absentee rates, turnover and recruitment success. By understanding which KPIs need improvement, HR executives can craft the right questions and pull the appropriate data to gain further insights on how challenges can be overcome.
• Focus on compatibility. HR executives must ensure their data speaks the same language. Compatibility requires determining universal definitions for various terms, such as salary (does it mean pre-tax salary or total compensation), as well as developing a consistent structure for inputting information (for example, does one form have names listed first then last while another is reversed). A lack of compatibility is one the greatest obstacles preventing HR from unleashing the predictive analysis of big data.
• Ensure integration. Integrating data across geographies, departments, time frames and countries is key to unlocking the value of big data. To ensure an HR department develops the common language and structure necessary for effective integration, businesses should look to global HR consultants with an expertise in aggregating data and analyzing it for greater business meaning.
• Remember to disaggregate. While big data is valuable as it combines multiple data sets, remember the importance of disaggregation. Sometimes aggregating data can hide challenges or provide misleading information. For example, an aggregation of salaries would likely produce skewed insights related to the workforce’s pay scale.
• Visualize insights. Garnering information from big data is not enough; HR executives must be able to share information with others. One of the best ways to communicate complex data is through visualizations. Leveraging graphs, data visualizations, infographics and videos can be powerful tools in helping others digest the insights uncovered from big data.
The rise of big data is not only changing the way HR executives use information, but is also further evolving the role of HR executives. As technology continues to relieve HR executives of the administrative aspects of their roles, there emerges an even greater opportunity and responsibility to contribute more strategically to a business’s operations and decision-making.
Michael Custers is the vice president of global alliances and strategic marketing for NorthgateArinso, a global HR process provider. He can be reached at firstname.lastname@example.org.