How People Analytics is transforming HR into a more strategic role

This article was originally published in DNA India.

HR/People Analytics is the flavour of the season. Rarely does a day go by when one doesn’t come across articles on how analytics is going to transform HR, much the same way it has transformed a host of other fields such as sales, marketing and finance. While analytics gurus and data scientists are gung-ho about the positive effects of analytics on a typically traditional HR function, HR practitioners themselves seem more ambivalent about the whole idea.

HR is slowly being transformed from an operational/tactical to a more strategic role. This has resulted in the creation of chief HR officers or chief people officers – roles that one couldn’t have imagined even five years ago. These roles are dependent on the CPO/CHRO aligning HR with strategic business goals.

This, in turn, requires significant use of data and analytics to understand and identify opportunities to link existing HR and people processes with employee performance, productivity and eventually the bottomline.

Given that analytics thus can truly enable a seat at the table for HR, why do we still hear grumblings, dire warnings and doomsday scenarios about how the use of analytics will eventually robotise the way we assess people, turning a soft exercise into a data driven, impersonal one where people are reduced to mere numbers? I suspect that there are two reasons for this: one legitimate and the other slightly more self-serving. The primary fear, that data crunching can make people into mere pawns on a chessboard, to be sacrificed at will, while understandable is wrong only if decisions are taken based purely on the output from various algorithms. However, HR practitioners who see analytics as an enabler do not suffer from this fear since they know that whatever outputs algorithms churn out are only additional data points for use in decision making. Thus, the “human” element of decision making cannot be done away with.

The second fear, which in my opinion is hidden and actually the true reason for the anti-analytics brigade to exist, is because when decision-making becomes data driven, it becomes that much more transparent.

Transparency is anathema to a large group of people since subjectivity goes out the window whenever data is used to drive discussions and decision making.

This can be a very scary thought for managers and leaders used to making ad-hoc, subjective decisions since there are no places left to hide. Data can be used to prove that the emperor indeed does not have any clothes.

People analytics can play a great role in enabling HR to streamline and optimise the entire employee lifecycle of hiring, onboarding, engagement, training and development, employee work environment, health and wellness, performance management, rewards and recognition and exit and transitions.

Organisations like Google have proven that the judicious use of data with strong processes can lead to superior practices that drive the hiring and retention of top talent, thereby providing a competitive advantage to the organisation. Laszlo Bock, Google’s SVP for People Operations, in his book, Work Rules provides a number of examples of how Google used data to streamline their hiring processes. My favourite example is their use of data analytics to relook at rejected resumes using machine learning approaches that eventually resulted in them hiring employees at a rate (1.5%) higher than their average hit rate of (0.25%).

This is but one example of how analytics allied with traditional HR know how can help the organisation to make critical peoples’ decisions.

You know what they say – if you can’t beat ‘em, join ‘em. Welcome to People Analytics!