HR – Increase Your Impact Using People Analytics

HR – Increase Your Impact Using People Analytics

Is it possible to determine if your team’s best performer is going to leave you in six months?

Or whether that humble interview candidate might just be your “rockstar” trader within the year?

In a few organisations in Asia, you can. Welcome to the world of people analytics.

During her time as Group Head of Human Resources (HR), Ms. Cynthia Tan led the creation of the people analytics function at the Oversea-Chinese Banking Corporation Limited (OCBC) in Singapore.

It was very much still a novel concept when she started the initiative three years ago, especially in Asia Pacific where this phenomenon was only just beginning to be studied.

Tan describes people analytics as the “use of data and analytical methods to provide insights for more evidence-based decisions about people, relationships, processes and their impact on an organization.”

This is a challenging task for most HR departments: just 14% of organisations globally have done any “statistical analysis” of their employee data, with a meagre 4% having achieved the capabilities to perform “predictive analytics” on their workforce.

Cynthia recounted what was involved in building this within an Asian bank with nearly 30,000 employees across the globe.

The Skills Gap Within HR

A major obstacle at the outset was overcoming the lack of analytical skills within HR.

This is in keeping with the findings of a joint Harvard Business Review and Visier study, which found this to be one of the top two obstacles in the adoption of people analytics within companies.

“As far back as early 2013, we certified a large number of HR people in analytics.

Despite the knowledge acquired, putting it into practice was a different ball game altogether. Statistics and mathematics are not natural to [most HR professionals].”

“Buy” or “Build”? There’s a Short-Term Bridge

It can be difficult for organisations to wait months, maybe years to build expertise from within before even starting a people analytics function.

As a result, it can be tempting to “buy” expertise by hiring consultants.

To overcome this hurdle, Cynthia decided to tap data science expertise outside of the HR function, but within the customer analytics group of the bank. This solution seemed to strike a happy medium.

“This partnership was ideal at the startup stage. HR provided the content and context for the [customer analytics] team. The coaching and mentoring from the analytics team was invaluable in analytics workflow and modelling process.”

Key takeaway #1: This method allows HR teams to kickstart a journey into building analytical ability.

By introducing expertise from the outside, quick wins can be reached in people analytics which raises interest across the rest of the company.

This also allows the HR team time to grow in their ability to execute analytical projects.

Where People Analytics Are Needed Most

Cynthia believes that now is the time for people analytics to become more mainstream.

“Organizations across Asia are attempting to build [this] capability…Younger people with science and engineering [educational] backgrounds are also more open to joining the HR workforce.”

In particular, “analytics for HR is more widely used in sectors with intense competition for talent that face challenges like attrition and succession planning, like banking, government and healthcare.

These are the sectors that have invested in HR technology and as a result they have rich and quite complete data sets which are critical for building an analytics function.”

For example, over the past decade the banking industry in Singapore became more open to foreign competition, meaning local banks have had to work harder to attract and retain talent.

Taking on more sophisticated analytical tools to inform OCBC’s people strategy was a case of survival.

Key Takeaway #2: Asian companies in industries with the strongest competition for talent need to start investing in people analytics.

The earlier they do, the more valuable data they collect, and the more exact their analysis can be. This ultimately allows them to use these insights to better retain and develop the talent they have.

Developing a New Wave of HR Number-Crunchers

In Asia, “tertiary institutions are beginning to include analytics into the curriculum of various disciplines”, but the demand continues to exceed supply for such skills.

Cynthia recognises that the HR fraternity has yet to fully embrace analytics as a core element of professional education, but she believes it is not long before it does.

She compares this to the past, in recalling that “people used to tease [us]…[saying that the] HR department is where numbers go to be forgotten.”

Despite rarity in the ability to translate number-crunching insights into realistic HR policies and programmes, the accessibility of broader analytical skills is a positive development.

Now, HR chiefs have the choice of whether to “educate HR to perform the analyst role or hire an analyst who understands HR”.

Key takeaway #3: As people analytics matures as a legitimate business function, the role of the HR function will also change. The use of data and analytics will complement the traditional role of the department more and more.

We can expect to see more data scientists specializing in HR, and business leaders becoming more accustomed to making people decisions backed by analytical models.

Although Cynthia is now retired, she continues to be passionate about driving the profession forward.

She is optimistic that as HR analytics develops, it would rise above descriptive analytics into the realms of the predictive and prescriptive.

We’d love to hear your thoughts on the role people analytics plays in the future of HR. Leave your comments in the box below.

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