30/8/2016

BigDatainHumanResources:AWorldofHavesAndHaveNots

http://blogs.forbes.com/joshbersin/?p=2384

JoshBersinContributor

IanalyzecorporateHR,talentmanagementandleadership.
OpinionsexpressedbyForbesContributorsaretheirown.

LEADERSHIP

10/07/2013@11:19PM 93.873views

BigDatainHumanResources:A
WorldofHavesAndHaveNots

SomeCompaniesUnderstandPeoplePerformanceInTheir
OrganizationsWell:MostDoNot

IvewrittenseveraltimesabouttheDatafication
ofHRandBigDatainHumanResources,
explainingthetremendousbusinessopportunity
companieshavetoleveragetheiremployeedata
toimproveoperationalperformance.
Thisweekweintroducedresearchconducted
overthelasttwoyearsandtheresultswere
astounding:whilemorethan60%ofcompanies
arenowinvestinginBigDataandanalyticstools
tohelpmaketheirHRdepartmentsmoredata
driven,thereisahugechasmbetweenthe
havesandthehavenots.
TheChasmBetweenAnalyticsLeaders
AndEveryoneElse
Usingourresearchmethodology(whichreached
around480largeorganizations),wefoundthat
only4%ofcompanieshaveachievedthe
capabilitytoperformpredictiveanalyticsabout
theirworkforce.(Understandingthedriversof
performanceandretention,usingstatisticsto
decidewhotohire,analyzinghowpay
correlatestoperformance,etc.)Infact,inour
researchonly14%havedoneanysignificant
statisticalanalysisofemployeedataatall.
Whataretherestdoing?Dealingwithreporting.
Theseremaining84%ontheothersideofthe
chasmarestilldealingwithdatamanagement
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andreportingchallenges,tryingtogetoutfrom
undertheburdenofadhocreportstodeliver
standardoperationalmetrics.

Fig1:BersinbyDeloitteTalentAnalytics
MaturityModel
AnalyticsLeadersGainTremendous
Returns
Theresearchalsoshowedthattheseleading
companiesgeneratehighreturnsfortheirhard
work:theirstockmarketreturnsare30%higher
thantheS&P500,theyaretwiceaslikelytobe
deliveringhighimpactrecruitingsolutions,and
theirleadershippipelinesare2.5Xhealthier.
Inaddition,theseHRteamsarefourtimesmore
likelytoberespectedbytheirbusiness
counterpartsfortheirdatadrivendecision
making,givingthemtruepotentialtohelp
changethebusiness.
TalentAnalyticsIsMuchMorethanBig
DataToolsandStatistics
Theresearchalsoshowsthatwhiletoolsare
important,theleadingcompanieshaveinvested
inotherthings:sounddatamanagementwhich
deliversqualitydata,businessconsulting
capabilitiestofocusontherightproblems,
strongrelationshipswithfinanceandoperational
analyticsteams,andvisualdesignand
communicationsskills.Theseareallcritical
skills,inadditiontostatistics,data,andmath.
InfactmostHRteamstellustheycanfind
statisticiansfairlyeasily(I/Opsychologistsstudy
statistics)buthaveahardtimefindingproject
managers,peoplewhocancombinedataand
business,andpeoplewhocantranslatea
findingintoaprogramorsolutionthatdrives
businesschange.
Functionally,highperforminganalyticsteams
havemultidisciplinaryskills.Theseinclude
businessunderstanding,consultingskills,data
visualization,datamanagement,statistics,and
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executivepresence.Theanalyticsteamnotonly
hastodiagnoseandsolvebusinessproblems,but
oftenconfrontexecutiveswithsurprisingornew
news.
OneofthebiggestchallengestoBigData
analyticsincompanieswevetalkedwithis
gettingpeopletochangetheirbehavioroncethey
havethedata.Mostmanagershaveyearsof
beliefsystemsandexperiencethatholds
thembackfromusingthedatasciencewe
provide.
AnExample:PayingPeopleToDrive
Performance
Letmeciteoneoftheexamplesfromthe
research.Onecompanystudiedtheturnoverand
retentionbehaviorofemployeesbasedonpay
raises.Theirtraditionalapproachwastopay
basedonanormalcurveandgivetopperformers
slightlyhigherraisesthansecondtier
performers,theyreceivedslightlymorethanthe
nextgroup,andsoon.

Itturnsout,asmuchofourotherresearchshows,
thatthisnormaldistributioncurveofpayisabig
mistake.Whattheresearchfoundwasthat
employeesinthesecondandthirdquintileof
performance(goodsolidperformers)wouldstay
withthecompanyeveniftheirraisewasaslowas
91%ofaverageincreasesintheirjobclass.Sothese
folkswerebeingoverpaid.
Ontheotherhand,peopleatthetopofthe
performancecurvewouldleavethecompanyunless
theyreceived115120%oftheaveragepayincrease
fortheirjobclass,indicatingthatthepayrollmoney
shouldgohere.

Asmostmanagersknow,topperformersout
delivermidlevelperformersbyawidemargin,
sopayingtoppeoplemuchmoreisahuge
advantageifitpreventsthemfromleaving.
Inthisparticularcasethefindingsdidnotsolve
theproblem.Evenafterbeinginformed,
managerscontinuedtopaytheirpeopletheold
way(beliefsystemsdiehardandmanagersdont
liketomakewaves).Sothecompanyhadtoroll
outamassivetrainingprogramandanewtool
setforcompensationdistributionbasedonthe
datascience,essentiallyoverridingtypical
managerthinking.
Only14%OfCompaniesAreGainingSuch
Benefits
Thesekindsofbenefitsareeverywheretobe
foundincompanies.Weveseendozensofsuch
storiesaboutapplyingdatasciencetoHRandin
everycasethereturnoninvestmentishigh.
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Unfortunately,becausesomanycompanieshave
notinvestedinthisareayetthevastmajorityare
unabletoachievetheseresults.
Sothebottomlineofthisresearchissimple:the
warfordataison.
Ifyouarenotinvestinginanintegratedanalytics
capabilitywithinHRandcreatingaBigData
solutionaboutyourowninternalpeopleand
payroll,youregoingtofallbehind.
Thecompaniesthatunlocksomeofthesecretsof
theirownpeopleperformancewillgreatly
outperformtheirpeers.
Youcanreadmoreabouttheresearch
here.
Youcanfollowmetostayuptodateontrends,
research,andnewsinallareasofHR,
leadership,andtalentmanagementontwitter
at@josh_bersin.
FormoreinformationonBersinbyDeloitte,
pleasevisithttp://www.bersin.com.

Thispublicationcontainsgeneralinformation
onlyandDeloitteisnot,bymeansofthis
publication,renderingaccounting,business,
financial,investment,legal,tax,orother
professionaladviceorservices.Thispublication
isnotasubstituteforsuchprofessionaladvice
orservices,norshoulditbeusedasabasisfor
anydecisionoractionthatmayaffectyour
business.Beforemakinganydecisionortaking
anyactionthatmayaffectyourbusiness,you
shouldconsultaqualifiedprofessionaladvisor.
Deloitteshallnotberesponsibleforanyloss
sustainedbyanypersonwhoreliesonthis
publication.
AboutDeloitte
Asusedinthisdocument,Deloittemeans
DeloitteConsultingLLP,asubsidiaryofDeloitte
LLP.Pleaseseewww.deloitte.com/us/aboutfor
adetaileddescriptionofthelegalstructureof
DeloitteLLPanditssubsidiaries.Certain
servicesmaynotbeavailabletoattestclients
undertherulesandregulationsofpublic
accounting.
JoshBersinisaleadinganalystinHR,talent,
leadership,andHRtechnology.Heisalso
founderandPrincipalofBersinbyDeloitte.

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