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Companies are not taking full advantage of data analytics to improve the performance of their workforce, according to a report by Bersin By Deloitte.
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Research by Bersin by Deloitte shows that 86% of businesses have yet to progress beyond using their HR data to generate basic reports.
But they are being eclipsed by a small number of companies using predictive analytics to make strategic predictions.
“A small group of companies, about 4% of the market, are doing some amazing things with data to predict performance and retention,” Josh Bersin [pictured], principle and founder told Computer Weekly.
Businesses with advanced data analytics capabilities have reduced fraud, losses and improved performance to identify hidden trends in data.
In one case a bank was spending money on training programmes to reduce fraud and theft in its retail branches. But using data analysis revealed the problems were not correlated by lack of training, but by the distance between the branch and the head office.
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In another case, an oil company expanding in China discovered that its Chinese businesses did not accept leaders coming over from the US.
“They looked at the patterns of talent mobility in China and found it was completely different from the US,” said Bersin. “Chinese business leaders had a completely different background.”
Bersin’s research shows that about 14% of businesses have invested in building an analytics team in their HR department.
In most organisations, HR staff operate independently of each doing their own analytics, rather than pooling resources.
However, companies are increasingly finding they need to rationalise and clean their HR data, if they are to extract benefits from it.
The major HR technology suppliers, SAP, Oracle and Workday, offer technology to help companies do that, and although cleaning data can take two years, it is worth the effort, said Bersin.
“We have talked to companies that have not done that and they have done the analysis on dirty data, and it has blown up in their face,” he said.
One HR department carried out a staff turnover analysis of its retail stores, and discovered serious anomalies, which it presented to senior executives.
“They said everything we do is seasonal. We always have that sort of data at that this time of year,” said Bersin.
Another HR department discovered that staff had a much higher turnover in South Africa.
Company's use of HR analytivs
Predictive analytics 4%
Advanced analytics 10%
Advanced reporting 30%
Operational reporting 86%
Source: Bersin By Deloitte
“They said our data shows you are not managing your business. The manager said, your data is wrong, we are using contractors, and you are looking at permanent staff,” said Bersin.
“If you have too many of those incidents in HR, you lose credibility,” he said.