Most business people have heard the term "BigData
," which refers to the analysis of massive amounts of transactional and business data to segment customers, pinpoint marketing, and predict consumer behavior.
Recently the The New York Times
ran an article which described how Target's
consumer analytics department can analyze your purchases to find out if you are pregnant and actually determine within weeks when you are due to have your child. Target then sends you promotions for baby products (intermixed with ads for lawn mowers, believe it or not) which dramatically improve sales.
Well this form of high-powered data analysis is now being used by Human Resources to understand your organization's workforce.
Last week we convened a group of high-powered talent executives from companies including Lowe's
, Alliance Data
, Turner Broadcasting
, and the Four Seasons
to discuss this topic. It turns out that many of these organizations are well along in the development of BigData strategies to understand their own employees.
This is not to spy on people, but rather to help companies understand the state of their workforce and make some vitally important (and difficult) business decisions.
Lowe's, for example, has been studying the relationship between employee engagement, compensation, managerial effectiveness, and store sales for years. The company now has a validated model that helps top executives make decisions about leadership, organizational design, and training programs which have a dramatic impact on store sales. When a store is underperforming at Lowes, the HR Analytics team can quickly provide insights to the management team to help them implement corrective action.
ARAMARK (one of the world's most successful food service companies), has discovered the relationship between OSHA safety reports, employee satisfaction, and other factors on client renewal and upgrade rates. They created a statistically valid model that helped them build a company-wide dashboard which flashes green, yellow, or red when any of these factors changes. ARAMARK executives and managers can quickly see where such risks are high and rapidly change procedures or staff to improve customer retention and revenue potential.
A large insurance company has developed a set of statistically proven measures that help the company hire high-performing sales people. They found many non-obvious factors which correlate to strong sales performance and have now changed their screening criteria and raised first-year productivity by over 20%.
And the list goes on.
Companies tell us that these talent analytics programs take years to develop. And unlike Marketing and Sales organizations, HR is relatively new to analytics and does not yet have sophisticated tools in place. HR teams are not filled with statisticians, analysts, and data visualization experts yet, and our research shows that only 6% of Human Resources teams feel they are "highly skilled" at data analysis.
But the era of BigData in HR is now here.
Just like Marketing and Sales wants to know who the highest profit customers are, HR needs to understand your internal "people model" and what people factors drive high productivity, service, innovation, and execution. Once they have this data, they can target compensation, training, leadership development, and internal mobility programs with laser-like precision. Instead of trying to "equalize" training and HR programs across the company, you can now focus your people investments where they really matter.
research, one of the best studies on this market I have read, points out:
We are at an inflexion point: Organizations which learn to leverage big data will far outperform those who do not.
This is the time to apply data science to Human Resources. It isn't easy, but the payoff is huge.
Read the book Moneyball.
Just as the Oakland A's used data science to recruit top performing ball players in Moneyball at a fraction the cost of the New York Yankees, you can do the same in your business.