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5 Common mistakes in HR analytics

We have seen a lot of buzz surrounding HR analytics in the last couple of years. There have been many publications across the globe covering lessons learned  in HR analytics initiatives. After reading much of this content a few observations stand out.

First, getting from analysing people data to achieving tangible results for your organisation is difficult to achieve. There are many initiatives in HR analytics but when it comes to examples of specific results of this new form of business intelligence the same examples keep coming up. Especially Google has done some outstanding work and is way ahead of the rest.

Second there are many  intelligent, analytical people active in this field of sport. But when it comes to being business savvy and adding real dollar value to your organisation the pool narrows noticeably. HR analytics are a means to an end, not the other way around. If you are passionate about data science and less about running a business a career in science may be a better match.

When reading about others’ experiences in this new field a few basic pitfalls keep coming up. Pitfalls that we recognize from our own experience on working on this subject.

So, the 5 most common mistakes when starting with HR analytics:

1. Putting the Cart before the Horse.

One of the first questions you should ask yourself before starting any HR analytics project is ‘why’? What is the goal of your efforts? How will your organisation profit? Many HR departments start working on HR analytics without a clear vision on the subject. There is so  much hype that HR directors are afraid they get left behind if they don’t start doing something analytical soon. In too many cases working on analytics becomes a goal in itself. Often new software, complex statistical techniques or new HR technology is the starting point for analytical ambitions. That is putting the cart before the horse.  Business questions should always be leading, not technology. HR analytics only adds value if you can tackle a real, specific business problem . Don’t start your analytics journey working on a flashy analytics dashboard that no one needs. Work on something that will lead to real cost saving or otherwise better performance. Only then will you earn the trust of business leaders.

2. Ignoring legal risks

This is simple. If your HR analytics project involves personal data about employees there are serious risks concerning people’s privacy. There are rules and laws you need to comply to. You have to think of the legal consequences of what you are doing. You need to involve your colleagues from legal. Yes, this might take time and delay your initiative but making mistakes in this area is lethal. Employees need to feel that their data is safe and handled with integrity. If you lose the trust of your colleagues you will have a very hard time earning it back. So get the information you need from legal then collect and analyse data in the right way without breaking any laws.

3. Lack of balance in your team

Meeting an expert data scientist that understands the role of HR and can also convince your CEO is a rare thing. HR analytics is a complicated field. So to be succesful you need different types of people with a variety of skill sets in your talent analytics team.  You need people who understand and are skilled in HR, IT and data science. But you will also need people who understand the business side of things to bridge the traditional gap between HR and business. You can only be succesful in HR analytics if you can make different people from different disciplines work together. This is tricky because everybody thinks their background and skills should be leading. In reality you need different skills and different ways of thinking during different phases of your project. You need razor sharp focus to keep moving ahead and not get stuck in all kinds of details.

4. Not looking beyond the borders of the HR departments

If your are an HR enthousiast you will be excited about the new possibilities HR analytics have to offer. For the rest of the world your cherished HR analytics project is just another business intelligence pilot. Chances are there have been more than 20 new projects across your organisation  in just this last year involving data.  Big data is red hot and not just in HR. So don’t expect your colleagues to be just as excited as you are. Too many times we see HR professionals working on HR challenges nobody else really cares about. To get the attention of colleagues beyond the borders of HR you have to adress specific business issues. You have to be able to tell a convincing story about you adding value that everybody can directly understand. So always start with a real-life business concern that keeps your colleague’s up at night before you start thinking about an HR analytics aproach.

5. Manage expectations

It is usually better to start small. You allready believe in the hugh potential of this exciting new field of sports. Your colleagues from finance or IT have yet to be convinced about the value of HR analytics. Don’t make the mistake to overpromise on your expected outcomes. HR analytics will not lead to millions of cost reductions in the first few months. In HR analytics progress comes slow. It is a complex and time consuming ordeal. HR analytics project always take longer than you think and the outcomes are not as overwhelmingly clear as you hope. So stay humble and keep a low profile. Keep your focus and work hard. Once the analytics train start to build up speed and you can show your first real results you can start to make more noise.

The future of HR analytics

So where is this exciting new approach in HR taking us? Are HR analytics just a hype or just more of the same? Considering everything that is written about this subject I believe the real value of HR analytics is not so much in making HR more efficient or less costly. Reducing costs or reducing risks is not the way to stand out in today’s modern age of business. Hiring and retaining the very best talent for key positions, having a highly engaged workforce, working on innovation in high performance teams, that’s what the future holds. HR analytics give us an opportunity to finally understand the drivers behind high performance, motivation and innovation. So I think HR analytics should focus on improvingthe quality of human capital and less on cost efficiency.

This articles came out on Icrunchdatanews.com earlier, read it here.

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David Verhagen
7 December 2015
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