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Since the very early days of industrial engineering, companies have been trying to collect data about people at work. The first pioneer in this market, Fredrick Taylor, measured the activity of iron workers in the steel mills. He found that when people carried exactly 65 pounds of iron, they produced the optimum output of productivity (and didn’t hurt themselves). Since then, we have learned how to capture a myriad of data about people at work.
We now capture data about where applicants and employees went to school, their employment histories, their job performance, their training histories, their career paths, and of course their ages and even their psychological profiles. Bringing all this data together and making sense of it has always been the dream of HR leaders. Today, this dream is starting to become a reality.
We have been studying the discipline of people analytics (aka talent analytics) for more than five years now, and in the latest research from Deloitte’s Global Human Capital Trends 2016 report, we found an astounding jump in investment, maturity and tools available. In fact, this new discipline within HR, which people have been writing about regularly in the press, is now taking off. Among the more than 7,000 companies we surveyed, the jump in adoption is amazing.
While the market has been slow to evolve (we labeled it “stuck in neutral” last year), I think this year growth will accelerate. In fact, I would suggest that you, as an HR professional, don’t really have a choice anymore but to jump in with both feet.
HR data is getting cleaned up. More than 40 percent of the companies we surveyed recently replaced their core HR systems. And almost 70 percent of the remaining polled plan to do so in the next year, giving companies a new, integrated database with information about their people that is ripe for analysis.
Analytics skills are available. While many HR professionals didn’t study statistics or math, more and more industrial/organizational psychologists and other analytics experts are coming into HR, making this a whole new career path in our profession.
Business impact is here. Today’s analytics strategies are moving well beyond retention and employee engagement analytics. You can now examine the patterns of high-performing salespeople, understand why we have fraud and theft, and identify how and why we lose customers based on people.
Let’s face it: Most of the things we do in HR (training, compensation, promotion, coaching) are soft tools—we never really know what impact they have, and, while we feel good about them, businesspeople squint their eyes when we tell them what huge impact we drive.
With people analytics, something you can now almost buy “out of the box” with new HR platforms, you can statistically show how various talent and management practices drive results and actually learn new things about your company.
Did you know that salespeople who got good grades in school typically are not the top performers? Did you know that employees who are likely to steal or cheat can be identified in the pre-hire assessment process?
These types of management decisions, and many more, can be measured, quantified and predicted with data, giving us amazing opportunities to improve our companies’ performance and educate leaders at the same time.
In today’s fast-moving business environment, I urge you to put an analytics team in place and invest in buying or building a people analytics solution over the next year.
Not only is it an important new “center of excellence” in HR, but you’ll also find it an imperative to compete in the tight labor market in the coming years.
I’m excited people analytics has finally started to take off. It bodes well for HR professionals everywhere.
Josh Bersin is founder and principal of Bersin by Deloitte, Deloitte Consulting LLP. He is a published author on the Forbes website; is a LinkedIn Influencer; has been quoted by Bloomberg, NPR and The Wall Street Journal; and speaks at industry conferences and to corporate HR departments around the world. Contact him on Twitter @josh_bersin and follow him at http://www.bersin.com/Blog/.
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