People Analytics is a big deal. In our last study (Deloitte Human Capital Trends 2018) we found that 71% of companies believe people analytics is an urgent priority, and this year, as the job market gets even tougher, CEOs are asking for more data than ever. How do we drive higher performance in the organization? How do we attract the best candidates? What can we do to boost sales and service productivity? The list goes on and on.
Let’s face it, HR departments have struggled in this area. While the Bersin by Deloitte maturity model shows progress, new data from LinkedIn shows that only 22% of companies have an analytics function and only 11% have a dedicated role. Why such a lag, and how do we get there from here?
Well I’m excited to say that the era of talent intelligence is here. As LinkedIn defines it, talent intelligence means using data to reinvent and improve every part of the recruitment process. I’d say it goes much further: companies want to leverage data to improve all aspects of employee development, engagement, leadership, productivity, and ultimately business results. And AI is making this easier than ever.
Do you need a team of PhD statisticians to make this happen? Not any more. Tools like LinkedIn’s new Talent Insights offering, ADP’s Workforce Executive and Management Insights, Visier’s Analytics Platform, and Workday’s augmented analytics are now delivering actionable information right to business and HR managers, without the need for a massive analytics consulting project.
Fig 1: Example of LinkedIn Talent Insights
Are HR and business leaders ready for this? Yes in many cases they are. I recently spent a day with the HR leadership team of one of the world’s largest insurance companies and asked them “how many of you have a background in statistics?” Almost every hand went up. Analytics is rapidly permeating the HR profession, and this is a very good thing.
LinkedIn recently look at this progression and came to an amazing conclusion: over the last five years in North America, there has been a three-fold increase in the number of HR professionals who list analytics skills in their profiles. HR people are “geeking out” at last (read my article “People Analytics Arrives with a Vengeance”) and this profession is finally becoming more of a science.
Why the Growth?
There are many reasons this is happening, the biggest being simply that CEOs demand it. In a hot economy like the one we have now, business leaders don’t want hand-waving answers to their questions. When they ask “what is our level of pay equity” or “where is our turnover a problem,” they expect a valid answer. And they are going to dig in and ask why.
The second reason is that we now have accurate people-related data to analyze. Over the last five years almost 40% of companies have implemented a cloud-based HCM platform and offerings from vendors like LinkedIn, Visier, OneModel, and other specialized vendors are making this talent intelligence easier than ever. Sierra-Cedar’s research points out that 45% of large companies are increasing spending on HR technology and my research shows an explosive growth in the number of AI and data-driven tools which work out of the box.
And now, thanks to the growth of AI, the market is getting even healthier. Products like LinkedIn Talent Insights and ADP’s Management Insights use what IT people often call “augmented analytics,” AI-based agents that look for relevant data on your behalf. In the old days we had to run reports, generate graphs, and constantly play with the data to understand what’s going on. The new tools in the market today can analyze data for you, point out trends and outliers, benchmark you against peers, and highlight areas of focus. Yes you need an analytics mindset, but you can now use the data for decisions without spending hours doing statistics.
Fig 2: LinkedIn Talent Insights Skills Analysis
I recently visited a company that is analyzing employee productivity, turnover, and interactions using organizational network analysis. They found a series of teams that are totally “disconnected” from their peers, which in turn means they are less engaged and less able to share information. Why were they disengaged? It was a management issue – and once HR pointed out the problem business leadership jumped into action quickly. These organizational dynamics are vitally important to business success, and now we can see them with data.
In the research published by Bersin by Deloitte this year, fully 69% of larger companies are now building an integrated database of their people. This is a big deal and the market is now ready.
Click here to continue reading Josh Bersin’s article.