HR analytics is a high priority in APAC, but the adoption is sluggish

Articles

Published 22 January 2019

Adoption of HR analytics is better in countries like India, Singapore, Hong Kong while the usage of analytics is limited in countries like Indonesia, Philippines, Malaysia, and China.

Human resource function has moved beyond operational to strategic to now data-driven. Extracting insights from data has paved a way into HR functions across businesses. The technology which has become a trend for the last couple of years called analytics helps companies track absenteeism, turnover, burnout, performance and much more. In other words, analytics enables companies to measure the business impact of people policies and is no longer a mere sophistication that amps up capability into HR. The ability to use people data, derive insights from it, and help influence decisions is an essential part of an HR professional’s job responsibilities, especially in large enterprises. To uncover future trends and build future skills, leading organizations are already exploiting HR Analytics to their competitive advantage.

According to Deloitte, analytics is being applied to a wide range of business challenges and recruitment remains the number one focus, followed by performance measurement and compensation. The professional services network sees an explosive growth in the use of organizational network analysis and studying employee behaviour to better understand opportunities for business improvement. So much so that KPMG says, “data and analytics capabilities are critical to shaping and intelligently managing the workforce of the future. Forward-looking businesses are already exploiting data’s unprecedented capability to dramatically improve decision-making and predict behaviours.”

Now that HR departments are generating more data than ever, they end up struggling with their data to turn them into insights. As such, according to Emerald Publishing, HR analytics will have become an established discipline by 2015, will have a proven impact on business outcomes, and will have a strong influence in operational and strategic decision making.

Why HR analytics?

As we move into the digital age, people are going to be the key differentiators. “The rapid pace of change is seeing companies undertaking transformational business models. Hence organizations need to align their workforce strategy to the organization business strategy. Organizations should clearly identify the critical skills/employee segments which are likely to drive the business plan and create a customized strategy for critical segments.

Analytics plays a big role in driving evidence-based decision making to organizations,” says Neeraj Tandon, Director, Workforce Analytics and Planning, Willis Towers Watson.

It is equally important for companies to apply rigour surrounding data accuracy and consistency, as well as security and privacy, to ensure people analytics are valuable and actionable to the social enterprise. “Transparency, including sharing how the data will be used, is critical to building trust and providing a positive experience for all stakeholders. Companies also need to ensure that people analytics is foundational to their culture, valuing data as an asset and committing to make data-driven decisions.,” argues Chris Havrilla, VP of HR Technology and Solution Provider Research of Bersin, Deloitte Consulting LLP.

Adoption of HR analytics in Asia Pacific

Data analytics is no more about scouting for actionable information; now data are being utilized to decipher entire business operation, and hence analytical tools are being embedded into everyday decision making.

A lot of companies including Google, AOL, and Facebook use analytics to gain insights into the impact of every interview and source of hire. A survey done by Deloitte in 2017 finds 71 per cent of companies see people analytics as a high priority in their organizations, however, the progress has been slow. While a latest 2019 study by KPMG says, analytics initiatives remain a low priority among HR leaders and their businesses — ranking next to last among 10 potential HR initiatives. And this despite more than half of respondents citing analytics as a key skill needed for optimizing the integration of AI/ML and over 80 per cent agreeing that HR can provide value through analytics.

Overall, the number of companies connecting HR data to business outcomes and performing predictive analytics barely changed from last year. On the other hand, McKinsey Global Institute estimates that companies using a portfolio of HR-analytics solutions could realize an increase of 275 basis points in profit margins, on an average, by 2025.

India witnessed a 77% growth in HR analytics professionals, according to a report by LinkedIn – “The Rise of Analytics in HR: An era of Talent Intelligence.” Data shows that in India, 14 per cent of total jobs in HR is analytics based which has further led to the rise of HR analytics professionals in India. In the past five years, there has been a 77 per cent increase in specialized analytics professionals in HR in India. These professionals are known to fill various specialized job titles such as ‘Data Scientist’, ‘Talent Analytics Director’ and ‘Diversity Analytics Specialist’.

However, when it comes to using data and statistics to predict likely outcomes, which is emerging as a high-interest area, only three per cent of organizations are currently leveraging it for making people decisions, according to Willis Towers Watson. The power of predictive analytics can be unleashed by using the power of four, says Neeraj. a). Building the right team which can help to target the real business issues for the organization and provide appropriate solutions. b). Process – Build a Predictive analytics process instead of doing piecemeal projects. c). IT tools – Plan ahead of the time while selecting the key tools for doing people analytics. d). Timeframe – Invest in people analytics from a long term perspective than immediate gains.

Having said, within the Asia Pacific, adoption of HR analytics is better in countries like India, Singapore, Hong Kong. However, usage of HR analytics is limited in countries like Indonesia, Philippines, Malaysia, and China, according to Neeraj.

This article first appeared in People Matters in the lead up to their TechHR Conference on 28 February 2019.