Mary B. Young explains in this Conference Board Insight Minute.
Organizations at the leading edge of human capital analytics (HCA) are leveraging new data sources to optimize their human capital.
The future of attracting, developing and retaining any organization’s key talent starts with its ability to understand its data. This data takes many forms and functions including what skills our key asset has and moves along a continuum to understanding trends, patterns and predictive models around what the business needs to make workforce intelligent decisions.
The list of sources for human capital data continues to unfold: electronic sensing badges, email headers, online calendars, social media, weekly polls, and real-time big data streaming from internal collaboration platforms. This next-generation of HCA allows leaders to gain real-time data about their workforce, much as they have about consumers, so they can take action quickly. Insights from HCA can boost employee engagement and retention as well as productivity, collaboration, and innovation, giving companies at the forefront a competitive advantage. Consequently, we expect to see a widening performance gap between companies that excel at using new data sources and tools to optimize human capital and those that lag behind.
HR is joining the data analytics revolution that has touched all aspects of business decision making. The business case for using large data sets to glean insights about human capital is clear, but in some instances senior leaders are hesitant to use data insights to make HR decisions—though they often use data to make decisions in other areas. The challenge for HR practitioners now is to champion data-based decision making in the organization. They must lead the transition from a complicated data landscape to an integrated work flow that produces consistent quality, reporting, and finally, analytics that shed light on business challenges.
Next-generation human capital analytics enables HR leaders to make more targeted investments in their workforces, identify specific behaviors that drive performance, track employee engagement in real time, monitor reactions to change initiatives, and tailor training and development to identified needs. Even companies that aren’t ready for these new data sources may be able to squeeze fresh insights from “old” data using innovative analytic tools.
How can human capital practitioners maximize the benefits of big data?
Mary B. Young explains in this CEB Insight Minute.
Organizations may amass huge amounts of information about employees, but few companies are using human capital analytics to its full potential or leveraging big data from external sources.
Organizations at the leading edge of HCA are using new sources of data to gain competitive advantage. And they’re doing so with the full knowledge and consent of their workforce. Next-generation HCA allows leaders to gain real-time data about their workforce, much as they have about consumers, so they can take action quickly. As a result, we expect to see a widening performance gap between companies that excel at using new data sources and tools to optimize human capital and those that lag behind.
To stay competitive, organizations must build stronger capabilities in human capital analytics data collection and analysis. To start on this path, they must:
- Reach out to key stakeholders at the organization and establish an HCA governance group and code of conduct;
- Allow employees to own their data, commit to using only employee-provided personal information, protect individual identities and individual-level data, and offer employees some benefit in exchange for supporting the effort; and
- Be transparent about their motives for collecting data and the business case for doing so.
Trust is a prerequisite for employee participation, and the opportunities for misunderstanding are abundant.
Big Data will increasingly shape the targeting, content, and performance of future public relations, just as it will transform every other corporate function. And that presents two interrelated challenges for PR people. First, they need to work with senior management in thinking through the ethical implications of gathering and using all this data. Second, PR people need to get as comfortable with data as they are with words. They should be plumbing whatever data they have—Small, Medium, or Big—for actionable insights.
The workplace has always been a social place, where unofficial communications channels and social contracts have been at least as important to employees as their organizations’ formal communications systems and official organizational structures.
Social collaboration refers not only to the social technology tools, but also to the behavior that is driving participation and usage of these tools. In the past, a company’s “stock of knowledge” could be monetized; now, it is the “flow of knowledge” that underwrites the future. The ability to transfer knowledge within an organization in its varied forms (e.g., facts, solutions, ideas, referrals, opinions) is now a strategic concern. Organizations need to “get great” at internal social collaboration (ISC) to solve new problems rapidly, accelerate innovation, get products and services to market faster, and outperform the competition.
What do new sources of workforce data mean for the CFO?
We expect to see enhanced competitive advantage for organizations at the leading edge of HCA that excel at using new data sources and tools to optimize human capital. Organizations can gain real-time data about their workforce, allowing them to optimize their workforce strategies; reduce resourcing costs; mediate risks; increase sales; improve customer retention; and identify cost and performance-related issues in their supply chain—all at a preemptive stage. However, few companies have thought through the opportunities, risks, and operational and capacity issues related to next-generation HCA.
How can Legal prepare for the use of big data?
Organizations at the leading edge of HCA are leveraging new sources of human capital data with the full knowledge and consent of their workforce. Nevertheless, if these new data sources and analytic methods are mishandled, they can potentially do more harm than good. If the company does not steward personal data appropriately, it may be in violation of regulations regarding data protection, fair employment, discrimination, and protected classes. Ineffective communication and management could damage public perceptions of the organization and its employer brand. Companies need to have rigorous policies and processes for protecting employee data from internal or external sabotage.
These implications will affect legal and risk functions, including chief legal officer, general counsel, chief risk officer, chief privacy officer, chief information security officer, and chief information officer.