We recently published a new report investigating people data in the HR profession. People analytics: driving business performance with people data explored if & how HR professionals are using people data to understand people risk. Whilst it might not be a term we often use, “people risk” is actually something many HR professionals are all too aware of.
It’s apparent most when people management practices go awry, whether through poor leadership, lack of investment in skills, or even misconduct and toxic culture, the signals of looming people risks are there for all to see. Some of these signals have a measurable component to them, and its here at the risk measurement level where people analytics could hold a lot of value.
Take a toxic culture for example. The signals for this might be increased incidents of bullying and harassment, poor levels of mental health and well-being, presenteeism – but what about before? Are there measures that might point to a culture going sour? This is where the measurement of people risk comes in; not in predicting behavior, but establishing the right measures as hygiene factors that, if tracked could be an early warning system which may prompt further investigation.
Seven types of people risk
In our study, which we developed in association with Workday, we looked at the key people risks that HR see in their organisations, and asked them to consider quality of people data available to them that describe this risk and their perception of the risk management practices associated with it. We looked at seven groups of people risk, each with two examples, to understand more about the HR perspective.
The results are shown in the diagram below:
Table 1: Effectiveness of risk management types
We found that certain people risks are being managed well by HR, and there is strong belief that HR has the right data to help understand key issues. However there are some risks which need greater attention, and for which more insight is needed to improve management, namely: the risk of presented by poor industrial relations and turnover of senior roles.
In our survey of global HR professionals a fifth (20%) of HR professionals said that turnover of senior roles is a risk that is not being managed effectively, and less than two-thirds (62%) said that they had data on this issue. Similarly for industrial relations activity almost a quarter believed this risk was not being managed effectively (23%) and 57% said that have at least good quality data describing the risk.
How effective is HR at tackling people risks?
In addition to understanding which risks HR is managing well we also investigated the extent to which risk management effectiveness is related to other characteristics. Our analysis showed that the effectiveness of HR at tackling people risks has a strong positive correlation with people analytics cultures (r=0.494, p=0.000): when there is a strong people analytics culture, there are improved perceptions of people risk management.
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