HR professionals are unclear on how talent data can enhance business performance but, as talent strategy is increasingly a top board priority, HR must remedy that.

Business success in a global tech-savvy marketplace is increasingly down to one thing and one thing only: People.

Understanding the strengths and weaknesses of a company’s workforce, and how to make the most of the strengths while improving the weaknesses, is the key skill that senior executives must master if they want to create and run effective businesses in any industry or region of the world.

To put it in corporate speak: talent is an increasingly critical differentiator of corporate performance.

CEB’s research finds that the boards of the most successful companies are twice as likely to have a deep understanding of talent issues. Understandably, HR plays a vital role in providing the right information and helping the board make better business decisions.

Findings from CEB’s Global Assessment Trends Report 2013 reveal that whilst HR is being called upon to provide valuable strategic information, HR professionals are unclear on how talent data can be best used to enhance business performance: 77% of HR professionals worldwide do not know how the potential of the workforce affects the company’s bottom line and less than half of organizations surveyed use objective talent data to drive business decisions.

Furthermore, HR supplies the least trusted functional data in the company: only 36% of staff trust data from HR (18% for leaders), compared to 50% of employees who trust data from Finance and 47% from Legal. One of the challenges is that HR metrics reported to the board tend to have a limited direct or measurable effect on performance.

assessment analytics, big data

HR Faces a Big Data Deluge

CEB’s study of nearly 600 HR professionals shows that HR is facing a “big data deluge”. HR teams are overwhelmed by the volume of employee data and struggle to elicit meaningful insight that will help drive businesses forward and deliver results.

According to IBM, 90% of the world’s data was created in the past two years (opens pdf, see page 1) and expected to double by 2015. Therefore the two challenges for HR to overcome are improving the quality of the data and its accessibility. Respondents to CEB’s study indicated that there is room for improvement in both these areas.

The ability to analyze greater volumes of complex workforce data and translate it into meaningful talent metrics allows HR to identify skill shortages and development opportunities, and answer the most pressing talent questions posed by senior executives.

But it is clear that HR still grapples with its ability to provide strategic data to the business on its workforce and is ill-equipped to take advantage of big data. The function does not yet have the systems and tools required to identify people intelligence, create metrics, and link HR data sources together.

Big Data, Assessment Analytics, HR

How Big Data Can Help with HR’s Priorities

With organizations focused on restructuring, cost-cutting, and growing the top line in tough markets, Global Trends Assessment report from CEB showed that HR’s 2013 priorities reflect the organization’s need to engage its talent (cited by 55% of those surveyed) and cultivate strong leaders (52%). The report reveals the other priorities of HR professionals as:

  • Performance management (49%)
  • Workforce planning/talent analytics (43%)
  • Training (42%)

These HR priorities reflect the perennial contention between balancing short-term employee productivity and performance with the longer-term aim of aligning talent to the needs and vision of the business.

Organizations do use data to help with every one of these priorities but they tend to focus on efficiency. For instance HR teams might look at how well an employee is performing plotted against their ease of access to data that helps with strategic talent decisions.

This can mean key information on talent potential and future capabilities is overlooked, and can negate targeted programs that identify future leaders and nurture talent for critical roles (part of HR’s work to cultivate strong leaders). Focusing on efficiency can also increase succession risk for organizations, and jeopardize business performance and continuity.

Big data presents HR with the opportunity to demonstrate business value by improving talent initiatives but it must be selective about the employee data it chooses to retain and use.

By harnessing big data, HR can be accurate and confident about the talent insights they provide to the board. And it is this that will allow senior executives to understand people’s potential to deliver greater productivity and growth.