23 Feb 2018
From the need to embrace both structured and unstructured data, to the emergence of ‘small data’, in 2017 there’s no more pressing issue for HR than data and analytics
Looking for insights into how data and analytics is shaping up as a key priority for HR professionals? Look no further this issue’s Asia-Pacific HR Report. When survey respondents were asked to rate their top challenges this year, ‘using data and analytics more effectively’ came third on the list (behind only perennial big hitters ‘managing change’ and ‘employee engagement & retention’). Yet when asked what skills might aid them most effectively, ‘big data & analytics’ rated a paltry eighth (out of 10 skills and competencies). There’s clearly something of a disconnect occurring: HR professionals see the looming challenge but are reluctant to bolster their own capabilities to navigate that challenge.
Nick Southcombe, general manager of Frontier Software, is not surprised. He says managers in all areas today are playing catch-up with data analytics, and just because generally HR staff don’t have the requisite skills, they shouldn’t be afraid to learn.
“The most important part to becoming comfortable with analytics has to do more with mindset than expertise,” he says. “All the thought leaders in this area will say this. We have moved to a world where professionals of any background are able to acquire competencies and capabilities if they have the motivation to do so. We really are living in an age of abundant information, so people like HR managers who wish to seek out insights into their companies’ people and culture certainly have more places than ever to go digging.”
What’s perhaps different to those other areas of business that are playing catch-up is that HR must also catch up with their tools. They will want to have tools like dashboards so that they are not missing the obvious in the data they have, and then they will want to think about what data they want to have, because the data they do have might not tell the whole story. Additionally, a feature of data that has accumulated over a long period of time may also be the discrepancies in how that data has been entered or handled over time, and Southcombe says HR managers may end up in a position of having to tidy up these ‘dirty data’ issues.
“This raises the issue of what motivates HR professionals to seek out data insights and also what tools they have to help them in this pursuit,” Southcombe says.
He adds that some quests for data insights may be motivated by ‘hard’ changes such as M&A activity or a restructure. Others may be motivated by softer reasons such as having a CEO come on who is passionate about understanding the employee experience. “The tools are certainly out there, but how individual companies can benefit from them remains for HR to decide,” Southcombe says.
Structured and non-structured data
The old saying, ‘peanuts in, monkeys out’– basically meaning you get what you pay for – is applicable to data too. But in the case of data it’s not necessarily what you pay for that’s important – although quality of data is of course critical – but rather how you classify that data. It’s very important to think about both structured and non-structured data. While structured data such as leave and performance data has made the transition from paper-based to digital form, when it comes to unstructured data – things such as social media comments and emails – Frontier Software has witnessed HR professionals increasingly turning to these unstructured data sources for important hiring and performance decisions.
“We are accumulating more of each, and the tools, the insights, and the privacy issues are different for each,” says Southcombe. “You have areas of HR where you must bring the two together, particularly in performance management. You wouldn’t do deep analysis of a department’s absence and KPI data and not listen to the stories they are telling you about their work in your performance management system. And you wouldn’t do the opposite either.”
Southcombe adds that the impact that occurs when HR managers are able to grapple with both these structured and unstructured data sources ultimately determines whether an HR department is tapping into its emerging and future workforce or dealing today with problems of yesterday. In short it’s the difference between retroactive data and future-forecasting data.
“The shift to forward-looking will happen,” he says. “Until recently the default mindset about data would be that ‘actual’ data is hard, and ‘forecast’ data is very soft – finger-in-the-air stuff – so if you are a practical-minded person your data outlook stops at the present. But as you gain more confidence in data – when you know it is based on something valid – then you start to envision a full stream of history, running from past to present to future.”
In short, what will happen when people have that mindset is they will miss the ‘future’ data if it isn’t there. Where’s our future head count? Where’s our future training expenditure? What is needed to meet future workforce requirements?
And while discussions around workforce analytics are currently very much focused on ‘big data’, there are more refined developments afoot. Insights can often be found in discrete data, what some now refer to as ‘small data’. It can be in this type of one-off unique data which captures exceptions and outliers that you can find insights and potentially different ways of doing things to create a point of difference for your organisation. Nick Southcombe, for one, predicts that HR professionals, probably with the assistance of data scientists and new tools, will soon start to mine for small data, those specs of gold hidden in big data.
‘I’VE NEVER BEEN GOOD WITH NUMBERS…’
Should HR be disconcerted when they hear the hype around ‘data scientists’ and how HR teams will need to incorporate people with specific analytical capabilities in order to fulfil what their organisation expects of the HR function? Nick Southcombe responds:
“You have to be pretty brave to call yourself a data scientist when you see the mathematics that a true data scientist is expected to be across. It’s actually going to remain beyond the grasp of most of us, even as data analytics becomes more central to business. If you do have a mathematical bent, then by all means dive in. It has never been easier to learn new topics than today. But as said before, the mindset is the most important thing. A true data scientist will understand the fundamentals of data and the importance of tools, but they will mainly emphasise the importance of asking the right questions. That is the mindset that will enable any professional to thrive in this new world, because you really need to be able to ask the right questions to work with data scientists, not be one yourself.”
A starting place
There’s still a lot of work for many HR teams around the country before that point is reached, however. For those just starting out on this journey, what are some ‘foundational’ or ‘hygiene’ HR analytics to be considered? Southcombe says he cannot overemphasise the importance of competencies and training as measures. That’s because ‘competencies’ can be seen as a catch-all for what’s most important in your workforce. Southcombe explains: “Whatever qualification or knowledge or talent is needed for success, we can call it a ‘competency’ and figure out how to measure it in an HR management system. And training is basically a catch-all for all the things that we as a business can do to improve competencies.”
FOUR TECH TRENDS
Nick Southcombe outlines four futuristic trends:
Mobile. “If desktop users aren’t hungry enough for visualisations and dashboards, then mobile users certainly will be. Seeing data directly instead of using forms, spreadsheets and reporting – that is what mobile users need and expect.”
Data mining and AI. “Facebook does it to their users. Someday businesses will be able to do it to their employees. That is, they could know things about their people that the people don’t know themselves. This could come from both structured and unstructured data.”
Privacy and security. “A key criterion for our systems will be our ability to manage data about our employees discretely, protect it from accidents and exploits, and most importantly maintain trust of our employees in our ability to do so.”
Instrumentation and the Internet of Things. “Tracking time and attendance by punching time clocks starts to look primitive when everybody works all day with smart devices, smart vehicles and smart machines. Wouldn’t you do analytics on that? There are issues here for HR to consider.”
Tools for the job at hand
The tools and technology platforms HR will use to mine and make the most of the data at their fingertips will become increasingly important. Frontier Software has a user-experience (UX) design process that is applied to unpack the kinds of issues that professionals are grappling with in this data-driven world. One of the products Frontier has invested significant UX design work in has been the next iteration of its dashboard product.
“Throughout this process we have brought some of our end users into the design phase – our ‘CoDesign Studios’ – so that we are better able to understand how data is being used to inform specific business processes in a variety of environments and sectors,” says Southcombe. “Given that our software comes as an integrated suite which has accumulated large amounts of data over the years, there are lots of meaningful stories hidden in HR and payroll data that we can see add enormous benefit to HR managers. The challenge really lies in how to marry insights based on HR metrics with the specific data-capturing channels that different organisations have. This is something that changes from organisation to organisation.”
Despite these differences, Frontier has found that many organisations have some consistent themes. For example, data becomes meaningful in different ways, depending on your role in your organisation. Frontier’s UX research has highlighted how empowering individual employees and team managers with relevant data about their work lives helps these people to better manage their own performance or team outcomes, without necessarily needing the intervention of HR or senior management.
“It is insights like these that have helped us to better design for the HR leaders that are keen to improve the employee experience of tomorrow,” Southcombe says.