Home / HR Analytics – Fact, fad or the future?

HR Analytics – Fact, fad or the future?

By Paul McNamara. Published on 12 December 2016


Being an HR headhunter is, I find, an incredibly rewarding career for a number of different reasons. One of the most important, for me personally, is the ability to be at the forefront of what’s going on in the HR field and to see the progression of the function first hand. An area which has received an increasing amount of column inches over the last few years is the oft-misunderstood area of HR analytics. In my experience, it’s an area that more and more HR professionals talk about when I meet them, but could it be the new (or maybe not that new) HR fad? The trendy answer for those who were talking about “commercial HR” five years ago or “HR’s seat at the table” 10 years ago.

So I wanted to explore whether this is a subject area which will help drive the future of HR and, if so, what does it mean for those professionals coming up through the function?

I was lucky enough to spend some time with Placid Jover, the recently appointed VP Human Resources for UK & Ireland at Unilever.

Born and educated in Spain with a combined Degree in Business Administration and MBA Programme from ESADE Business School, Placid already had a scholarship from the Department of Information Management & Technology when he joined Unilever’s ‘Future Leaders Programme’ in 2004. Having worked across Spain, the Netherlands and Switzerland in progressively bigger HR roles, Placid then became Global VP HR, Organisation, Performance & Analytics based in London. There he led HR Analytics with a focus on automation, visualisation and predictive analytics.

In June 2016, he became the first Spaniard to lead HR for Unilever’s £3 billion UK business

Placid has a clear passion for HR analytics and was voted one of the ‘Top 70 HR Analytic Influencers’ globally.

PM: Placid, how much change have you seen over the past three years in the HR analytics field?

PJ: There are many more proof points now than there were three years ago. The number of conferences focused on the area, the number of suppliers selling data analytics and technology systems, and indeed the volume of headhunters and others keen to discuss the subject suggests not only that there is more interest, but also higher adoption levels. It’s also clear that more and more CHROs want someone with a data point of view close to or at the top table.

PM: Research suggests only 11% of organisations use data to drive organisational performance. Tell me about your experience at Unilever.

PJ: To start with, it’s key to realise that today we compete based on insight. It doesn’t matter whether it’s soup and soap, fizzy drink or cars, success is based on knowing your consumers, users or shoppers and their habits, and then being able to quickly mobilise your organisation to embrace and action the insight. It’s not just about product, brands and people anymore, the third leg of the stool is insight, and it’s crucial in enabling business decisions.

At Unilever we are fortunate – data and analytics are at the centre of our business approach. From an HR perspective, to start to gain success in this area we needed a number of factors to come together:

  • A senior management team that believed data was core to delivery of the business agenda.
  • A CHRO who embraced data and lived and breathed the insight it brought the organisation and people agendas.
  • Resources including working capital to create space to build the right capacity including both skills and technology.

However, in my opinion an often neglected factor that is required to make progress with Analytics is management attention (and time). You need senior leaders in HR and beyond to spend time playing with hypotheses and your research funnel; you need them to engage with the insights that you come up with, and to have the courage of take action and do something about it. If you can’t turn insights into action what you have is wasted effort. It must create an outcome, a policy change, a different way of working – something that wouldn’t have happened without that insight.

PM: Often HR functions can be guilty of creating data and insight to confirm work that has already taken place. How do you avoid this?

PJ: Insight must be linked to business outcomes. Even when we were right at the start doing cool and crazy stuff around workforce planning, it was never just about predicting attrition. The business leaders wanted to know where we would need people, when we would need them, and what type of people they would be. Then we would monetise it for them. P&L leaders would see whether they would over or under spend and be able to react accordingly. We’d help solve real business challenges.

The whole process has to be iterative. It works best when it’s not top down or bottoms-up: the best analytics should be co-created. You can’t start an analytics journey without knowing the problem you want to solve, AND in the process of solving a problem you get new insights, new perspective, new dimensions that allow you to update your pipeline, bring finesse to existing research or to open new avenues that deserve exploration. If you think about marketing functions, they don’t just speak to their customers on 1st January. They are constantly evolving their insights through further data across the year. HR should be the same.

PM: What about the perceived lack of analytical and mathematical skill in HR? Will that hinder the adoption of HR analytics?

PJ: Again, there is real synergy with other business functions. How you do marketing today is very different to how you did marketing 10 years ago – it’s no longer just TV and radio. Skills change with the generations and HR is the same. When I talk about “Digital” I am speaking about Social, Analytics, Mobile and also Technology. And all of the above is present everywhere today:  how you speak and position your brand in the market place, in front of consumers, users and talent. The same is true internally: we have to leverage “digital”  to understand what motivates our factory workers vs our head office employees? What do they value in their reward packages? What training impacts the most business performance? All of this insight can be driven by data, so HR must adopt it. If HR doesn’t use data and people analytics more effectively we’ll be taken over by functions that will.

Of course the nuts and bolts of HR will still be important – understanding ER, talent, reward etc. will not disappear from the skill set, just as marketers will still need to know how to write a marketing plan. But the HR function is evolving to one where more people use data and analytics as the foundation for delivering HR. It’s not going away, so the best will embrace it.

At Unilever, the strapline is shifting from ‘I think” to ‘I know’. HR business partners are telling the business “I’ve checked my data and this is what we should be doing”. I encourage my function to be more and more evidence based. I think you’ll see more individuals with this skill being attracted to HR as a career. We need to move to being and doing “data powered HR”

PM: Do you need an HR function then? Why not just machines that churn data for the business to execute?

PJ: This is a debate going on everywhere right now. And there are many interesting, and often diverging points of view. Mine, at least for the time being, is that there is still a place for human insight. I say Data + Judgement = Problem-Solving. There is some context that data just can’t capture today. You need them both. The right insight combined with good judgment allows us to make superior decisions.

PM: What advice do you have for those people who want to kick-start using people, data and insight within their organisations?

PJ: To begin with, start small. Don’t try to eat the elephant! You don’t start analytics by hiring 30 data scientists! Show the value, prove the success and start to engineer a movement within your company. It’s a great opportunity to partner cross-functionally. IT and finance can be crucial supporters. If HR data is disconnected from the numbers that finance are supplying then you’re onto a loser. Get connected.

Secondly, work on real problems, those that really matter. There’s no point working hard on predicting attrition if that’s not important to the business.

Thirdly, it’s good to be humble. Know what you can do and know what you can’t do. I’ve never been afraid to ask for help, both from inside my organisation but also from the market. There are lots of resources out there that can help.

Finally, it takes time. The ROI on HR data and analytics can be huge but don’t expect to achieve it in three months.

PM: Finally, Placid. What’s going to evolve in this space in the next decade?

PJ: There will be more and better technology creating more and better data.  In the future, there will be more focus on the team outcomes rather than analytics focused on individual analytics. Analytics will look at the ingredients that produce high performing teams, helping move team performance from good to great by helping us understand what mix of skills and competencies are most successful.

The environment will be very data-rich. Analytics will be a common currency, and there will be an increased willingness to use the insights created to experiment and understand different outcomes.

The ‘ethical’ dilemma will continue and will become more central to the agenda. What are the boundaries? It will be fascinating to see.

The use of biometrics and commercial data will become currency. There’s so much you can get from an HR data set…. Some decisions will become fully automated, no human intervention in those instances.

Finally, I think we’ll also be reminded that there is something appealing and magic about being human. We won’t just revert to data and algorithms; we’ll still want to see the human touch. I liken it to finding our way without using the sat-nav. There’s something romantic about getting it right without the technology.

PM: And will there be more people with your background running HR functions?

PJ: I hope so. I genuinely think we will see more people with a data science background doing bigger mainstream HR jobs.

 

Thank you Placid for your valuable and fascinating insight. It’s an area we could discuss for hours!

It is clearly an exciting time to be an HR leader. There is more data, both structured and unstructured available for those people who want to use it. My view is that the leaders who immerse themselves in it and embrace the insight will continue to see themselves and their businesses evolve and succeed. Those who don’t will be left behind. Because, after all, running a business without understanding and using data is not how things work in 2016.

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Paul McNamara

PARTNER
INTERIM MANAGEMENT
HUMAN RESOURCES

Paul is a respected executive consultant with more than 15 years’ experience within Human Resources. He delivers senior level interim assignments across all HR disciplines and industry sectors, operating at daily rates typically between £600 – £2,000.

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