Hybrid working and the advance of digitisation, much-discussed agenda points prior to 2020, were accelerated by the pandemic and have generated new challenges and fresh solutions for hard-pressed HR departments. Going forward, HR’s capability to optimise performance in a hybrid and diverse workforce will depend largely on their ability to use data to identify, retain and develop employees and to recruit the right candidates.
Even before the pandemic, the adoption of data analytics was booming, as organisations sought all the efficiencies of digital transformation in the era of the cloud. As economic conditions assume greater normality, digitisation will extend further into HR. Businesses will seek to fix continuing problems with productivity and employee engagement which the pandemic has magnified, while also gearing up for greater competition.
There is mounting evidence about the effectiveness of this approach. According to IBM, workforce analytics systems can make companies up to 66 per cent more likely to increase HR performance efficiency, but without any extra headcount. There is though, a lot of ground to make up. Globally, prior to the coronavirus, Gallup estimated $7 trillion in productivity was lost annually through poor employee engagement and workplace cultures that failed to motivate or inspire.
All companies have data of course, but not all collect and collate employee information in a systematic manner, or hold it where it can be analysed quickly and in near-real-time by advanced people analytics solutions.
Platforms make transformation accessible
The big difference now, compared with even a few years ago, is the arrival of highly intuitive software platforms that are easy for the employee and their line manager to use. In-built automation removes so much of the admin drudgery associated with HR data, and ensures dates and deadlines are adhered to on both sides.
HR platforms are critical to a more effective, holistic approach to HR analytics, because it is very difficult to use manual methods to keep track of every worker, their aspirations, performance, continuing education and goals, even in a medium-sized organisation. Manual methods are more likely to generate inaccuracies or inconsistencies that make data more difficult to analyse.
Collecting data on a platform also becomes a necessity when so many employees continue to work remotely. Management consultancy McKinsey found that across Europe, 38 per cent of employers now expect their employees to work two or more days a week away from the office after the pandemic. Regular check-ins with managers will be needed to maintain a sense of connection and to ensure employees are treated as individuals and develop on the course they have agreed.
The pivotal role of people analytics
Once the platform has collected the data, HR can use people analytics to extract insights that are genuinely transformative. The capabilities they confer on an HR department help move it from a purely administrative role into a strategic driver of business initiatives and decisions.
In addition to spotting wider organisational trends, people analytics enables HR to understand individual employees, what makes them tick and to map their journey through the organisation. HR can take a more holistic, personalised approach to engagement, considering not only productivity and performance, but also physical and mental wellbeing, mood, and surroundings. This is about looking at the employee’s experience throughout the entire employment lifecycle from recruitment and onboarding through to when they leave.
People analytics gives HR the power to optimise performance, spot hidden threats and opportunities and build scenarios so they are never caught on the wrong foot. Companies that already invested in workforce planning analytics, for example, were quickly able to build scenarios when the UK government announced its furlough scheme in 2020. They had a much clearer view of the impact of furloughing specific individuals and bringing them back to full-time work, even in an enterprise-level organisation with thousands of employees. Using analytics to deliver business insights and actionable real-time intelligence makes ‘what-if’ scenarios far easier to create and much more accurate than with spreadsheets alone.
Analytics and the use of performance indicators
It is true, of course, that people do not go into HR because they are data scientists, but with the right software data can be extracted from business systems automatically, removing the chore (and mistakes) of manual collation. This is invaluable for report preparation and offers vital insights into where employee performance needs to be improved or where different functions need extra support or new recruits.
Measurement according to key performance indicators provides near-immediate visualisation of where the organisation sits against its targets. Individuals or teams with high absence rates are flagged up faster, enabling earlier and more effective intervention. Analytics can reveal where an organisation has a problem with the retention of new recruits, putting the spotlight on on-boarding policies or delivery issues when it comes to their initial training. The ability to comb through thousands of records provides full visibility of periods of time managers are concerned about.
Data-driven recruitment
With access to analytics, HR can quickly match a job spec to the qualifications of individuals when internal vacancies or promotion opportunities arise, examining feedback from managers over the candidate’s entire career in the company. Natural language processing tools are capable of rapid analysis of key terms to provide insights into who is most suitable and most likely to provide the best outcome.
Identification of recruitment trends using analytics not only indicates when is the best time of year to fill certain types of role but also the candidates most worthy of offering an interview. No organisation should replace HR involvement and interviews with analytics, but tools of this kind reduce wasted effort on both sides of the recruitment equation.
Predictive HR and retention
Analytics platforms combined with AI-based technologies take HR a step further into predictive models, indicating where problems are likely to occur and where current successes may need more resources to grow in the face of new challenges. A predictive model will, for instance, flag up the need for intervention after employees leave, exposing their colleagues to heavier workloads. Or it may indicate that an individual requires skills development and training to fulfil their stated ambitions.
Analytics solutions employed in this way, have a major role to play in improving retention. Before Covid, improving retention was a significant aim in most organisations, with two years being the average length of service for across most organisations. This focus on finding and retaining talent will intensify after Covid, precisely because markets could be subject to significant disruptions from new competitors emerging from economic turbulence. In these new conditions, analytics will scan the data and alert HR to flight-risk, or recommend actions to meet targets on recruitment, gender, pay gap and pension requirements.
The importance of new approaches to employee data
Reaching this point of data maturity and obtaining these valuable capabilities in HR is within the grasp of most organisations. It may, however, require greater internal attention to the quality of data, which traditionally has been held in different formats and systems. Implementation of data-driven HR requires attention to data processing and adherence to new standards, as the entire organisation learns just what an asset its people data is.
While we never want to reach the point of management by machine, the more effective use of people data and analytics is fast becoming a necessity. The ability to engage, inspire and promote employees, using data from what they say, feel and do, will be a major competitive capability, increasing productivity along with organisational and individual wellbeing. It will deliver significant benefits long after the end of the pandemic.
