HR analytics and the challenges

David Farmer our consultant managing the role
Posting date: 5/9/2014 4:06 PM
If I may, I'm going to start with a somewhat base level analogy, but one that I think serves a purpose!

 
Big data is like teenage sex: everyone talks about it, nobody really knows how to do it, everyone thinks everyone else is doing it, so everyone claims they are doing it...

HR analytics seems to be exactly the same

We started Harnham in 2006, and reflecting on our 8 years, the market and industry is almost unrecognizable from the early days of our business. The use of data is of course growing exponentially, and companies are placing more importance on using data to make intelligent decisions. The era of just following gut instinct seems to be over.

With an increase in the volume of data available, companies begin to look at new ways to use the data at their disposal, both for external and internal gain. With that in mind, I attended a conference on HR analytics recently and got a fascinating insight in to this growing sector.

Of course the term HR analytics is not new. This has been around for a long time – but I learnt that there is a real desire and a real need to use the data available in new ways, and to change the analysis that companies are performing to add additional value.  

The buzzword from attendees at the conference seemed to be "journey". Companies have spent years gathering and collating data on employees, but now seem to be at a crossroads - do you continue just compiling this data and generating excel reports on whatever metric has been asked for by a manager that week, or is there a better way to use this data? Are we at a point where we can start going further? Can we start using this data for predictive analysis?

Here is where I feel we hit three challenges.

1. ROI

There was a fascinating presentation at the conference in which a case study was shared by a major retailer. They found that in a 3 year study, they could prove a link between an engaged workforce and the profit of a store. I'm sure you'll agree that this is a great find and a useful exercise, but I wondered how many organizations would be willing to spend 3 years analyzing the relationships in their business to find out if it would have a small increase in profits at a local level. Herein lies the problem, - as the actual analysis of this data seems to be a new thing but how many management teams are willing to invest in it?

It seemed to me that the analysts and data managers that I met were confident that they were able to give amazing insights to their businesses, but did not have the time and resources to get in to the data and have a look around.  Instead they were simply required to submit excel reports to show what has happened rather than predict what this means for the future or make recommendations on what the organization to do as a result.

 

2. Data Quality

The systems where this data is stored largely seem to require input from a manager within the business, and at the point they're inputting this data it is likely that they are either just dealing with someone leaving the team or joining the team. In either of these situations, I would imagine they're busy and stressed, so will potentially not be too worried about what they're putting in to a workforce management system. 

The upshot is that the data you're then analyzing may not actually give you a true reflection of the fact. Again, it seems like the person inputting the data needs to understand the value to them of making sure that it is correct and I was not convinced any of the presenters had quite got this right in their business.

3. Skill Set

I listened to a fascinating debate at the conference about what skills would be needed to grow a team of HR analysts, and I would say the room was split almost 50/50 between the "data is data" opinion and the "HR knowledge is essential" group.

I reflected on this afterwards based on a comment made during the discussion.

It was noted that HR analytics is probably 5-10 years behind other analytics disciplines such as logistics and marketing analysis for example. I would agree with this, but rather than worrying about this fact, the teams should look at the reasons why and also how to utilize those skills.

Analysts in marketing or credit risk don't study marketing or credit risk at University. They study mathematics, physics, statistics or similar and then apply these techniques to an industry. They don't know everything about marketing strategies on their first day in the role, but they can model data to tell you with a very high degree of certainty what the propensity for something to happen is. Data is data - you just ask it the questions.

So if companies don't utilize these data skills, my concern is that they will stay behind other analytical disciplines and only be able to do a small proportion of what could be possible with the data available to them.

The Ethical Standpoint

People are more aware of their personal data now than they were 5-10 years ago, and also more willing to share it - as long as they get something in return. Therefore the data available for HR and workforce analysis now is vastly different to 5-10 years ago - you only have to look at the growth of Facebook and LinkedIn in that period to know that you have more opportunity to know more about your teams than ever before.

Here is another question then - the interests on someone's LinkedIn profile or Facebook page will give you a huge amount of insight into skills that you may not see on a day to day basis in their role, and may mean that you consider them for roles that they wouldn't normally be considered for, but is it ethically right to look at this page for the potential benefit of the candidate? Where do you draw the line?  It is potentially for their benefit, but does that make it right?

I heard of tools where members of staff could link their Facebook to a talent management tool within the business - the take up was very low. Let's be honest, you may not want your company seeing your personal photos and online conversations, even if it could mean more chance of an internal promotion!

Putting the onus on the employee seems to be the best course of action then. If they fill in their internal profile similar to how they would a Facebook or LinkedIn account, then you have all you need to be able to draw better analysis. They have a vested interest in the outcome, and as long as this is understood you should get pretty accurate data to use. However, building an internal platform to match the functionality of the likes of Facebook and LinkedIn can be costly and once again requires more data experts to analyze the new data it will generate so we are back to the ROI challenge.

In conclusion

I agree that HR analytics could and should have a direct impact on business profit, but just in the way that all new concepts need to; HR teams need to harness the skills of other analytical disciplines to achieve all that is possible to prevent falling further and further behind. It is also going to take companies being brave and setting the trends for the use of this data to show what is possible before others will follow.

As someone put it when discussing how companies improve the potential and usage of analysis in HR and workforce planning - we should talk about it a lot in conferences and meetings to share as much as we can to make sure that we all learn as much as possible from each other, but we don't want to share too much so that nobody can do it better than us…!

At the end of the day, being better at anything within the sphere of analytics and data gives you competitive advantage and you don’t want to lose that.
 

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How to Succeed in Self-Service BI

How to Succeed in Self-Service BI

Business Intelligence, along with Business Analytics and Big Data, is one of the terms often associated with decision-making processes in organisations.  However, there is little discussion around the importance of what skills decision makers in your organisation need to use the technology efficiently.  In recent years, the development of user-friendly tools for BI processes, Self-Service BI are increasing. Self-Service BI is an approach to BI where anyone in an organisation can collect and organise data for analysis without the assistance of data specialists. As a result of this, many businesses have invested in comprehensive storage and information processing tools. However, many are beginning to find that they are not able to realise the gains of these investments as they were expecting, may often due to underestimating the difficulties of introducing these systems into the current processes and transforming existing knowledge into actual actions and decisions.  In a worst-case scenario, if left unplanned, Self Service BI can sabotage your successful BI deployment by cutting mass user adoption, impairing query performance, failing to reduce report backlogs, and increasing confusion over the “single truth”. To prevent this from happening, here are our top three tips for ensuring the right implementation of SSBI in your company: UNDERSTAND YOUR USERS’ NEEDS There are three major user areas for analytics tools: strategic, tactical and operational. The strategic users make few, but important decisions. The tactical users make many decisions during a week and need updated information daily. Operational users are often closest to the customer, and this group needs data in its own applications in order to carry out a large number of requests and transactions.  Understanding the different needs of each group is necessary to know what information should be available at each given frequency to help scale the BI solution.  HARNESS THE POWER OF ADVANCED USERS To ensure a successful BI deployment, utilising advanced users is key. Self-service BI is not a one-size fits all approach. Casual users usually don’t have the time to learn the tool and will often reach out to ‘Power Users’ to create what they need. Hence, these users can become the go-to resource for creating ad-hoc views of data. Power Users are the ideal advocates for your business’ self-service BI implementation and should be able to help spur user adoption.  UPGRADE INTERNAL COMPETENCIES  Our final tip for a successful implementation is to communicate the new tool thoroughly to the users.  It is highly unlikely that employees who have not been involved in the actual development project will immediately understand what the tool should be used for, who needs it, and what it should replace. By upgrading internal competencies, you can avoid becoming dependent on external assistance. Establishing a cross-organizational BI competence centre of 5-10 members, who meet regularly to share their experiences will help drives and prioritise future use of the tool. The added benefit of a successful implementation is that it will generate new ideas from users for how the organisation can use data to make better decisions. If you have the skillset to implement Business Intelligence solutions, we may have a role for you.  Take a look at our latest opportunities or get in contact with our team. 

Real Time Pricing - Coming to a store near you

Real Time Pricing - Coming to a store near you

Real-time pricing: coming to a store near you.Personal shopping is on the brink of taking on a whole new meaning. The advancement of mobile technology and the information held on individuals' shopping histories means product prices could soon adapt as shoppers walk up and down their supermarket aisle.Gone are the days of retailers only being able to actively manage the price of a small number of products once a week. Algorithmic pricing and real-time competitive pricing data allows the changing of product prices on the fly.Amazon is at the forefront of such "real-time pricing" initiatives, which have traditionally been the preserve of online-only retailers.However, brick-and-mortar retailers in the US are showing their UK counterparts the limitless possibilities when it comes to dynamic pricing.Independent consumer electronics retailer Abt Electronics pipes competitive pricing data gathered by Dynamite Data into its point-of-sale systems to allow staff to negotiate prices at the point-of-sale, according to Dynamite Data chief executive Diana Schulz.Meanwhile, another one of Dynamite Data’s unnamed clients uses electronic shelf labels and re-prices every product in their stores each morning based on the prices of its rivals.The ability to change prices dynamically is not simply the preserve of all-powerful brands such as Walmart or Target either.Schulz explained that her company has "seen these types of technologies in both large and mid-sized retailers" despite the "investment in technology and competitive data that is typically needed".Commercial sensitivitiesBack in the UK things are not quite as close to a Minority Report-style personalized shopping experience.Even online-only specialists Shop Direct and Ocado claim they do not engage in real-time pricing, while those that do heavily use real-time data to adapt their prices such as the airline brands are reluctant to discuss the issues.EasyJet declined to comment when contacted because of commercial sensitivities around discussing pricing-related issues.Grocers Tesco, Asda and  Sainsbury’s have all claimed they do not engage in real-time pricing, with the latter two both citing the logistical difficulties in aligning such a strategy across their physical stores and online presence.A Sainsbury’s spokesman claims real-time pricing would result in "chaos", while an Asda spokeswoman saying such a strategy would be a "nightmare".Yet, despite such a negative perspective from UK brands, experts are confident real-time pricing will arrive on these shores sooner or later.Simon Spyer, a partner of VCCP data arm Conduit who began his career working on the Sainsbury's Nectar business, believes the UK will begin to see "more and more" of matching rivals’ prices dynamically, particularly in the grocery and electrical sectors.He explained that real-time pricing is likely to affect "anything where the product is largely commoditized" and in instances where the only way retailers can differentiate that product is by "being really keen on price".Electronic labelsAs it stands the major barrier for implementing "real-time pricing" in-store is changing the prices to match the online price, a hurdle that could be removed by the electronic shelf labels being pioneered in the US.Schemes like Tesco Price Promise and Asda Price Guarantee already use real-time data to 'price match'In the UK various retailers have dipped their toes into the water when it comes to electronic shelf-labeling including a Nisa Local store in Shrewsbury that launched a trial in August last year to carry out automatic pricing and timed promotional updates, alongside QR codes and meal deals.Tesco has also experimented with electronic labeling on various occasions with trials in 2006 and 2008, but the retail giant has yet to combine real-time pricing with its electronic labels.Spyer claims "the capability is definitely there both online and offline – it is whether there is a business rationale for investing in it".However, with major UK supermarkets lacking a pressing reason to implement real-time pricing, that investment may be slow in arriving, argues Kaye Coleman, the founder of price consultancy Ripe Strategic.Coleman explains: "The supermarkets already do price matching – it is not so sophisticated but price matching is already happening".Schemes including the Tesco Price Promise, the Asda Price Guarantee and the Sainsbury’s Brand Match currently use real-time data to "price match" by offering money off the next shop.A cynic could argue the supermarkets should knock money off at the till rather than relying on customers to redeem their vouchers at the next shop, but such an action could hit the companies' bottom line.Mobile sophisticationThe growing sophistication of mobile marketing is also likely to revolutionize the way brands approach their price matching."If you can come up with a value proposition where I check-in [on my mobile] when I walk through the store for the first time and that presents me with a personalized experience based on my purchase history then I could see the benefit for a customer and a retailer," said Spyer.The trick for retailers is persuading customers to adopt such behavior, but the offer of being delivered ever-changing personalized price offers and messages in-store is a compelling proposition.Personalization is already a priority for retailers. Sainsbury’s uses anonymized shopping data gathered from the Nectar card to personalize offers.The levels of personalization offered by Sainsbury’s are increasingly complex. If a female customer buys folic acid they will be sent promotions on other pregnancy-related supplements during the pregnancy period and offers on nappies further down the line.UK retailers are sure to keep a close eye on developments over the Atlantic, with Schulz claiming she knows of clients that are piloting technologies that enable in-store personalized discounts.The challenges on the high-street mean there will inevitably be more casualties, but real-time pricing does not have to be the sole preserve of online-only retailers.Innovative ways of manipulating real-time data could be the shot in the arm the high-street retail industry so desperately needs.This article was first published on marketingmagazine.co.ukClick here for the article on the web.

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