With a looming talent battle – to attract the workers with the best skills while retaining current employees – the need for human resources departments to make key strategic decisions that are rooted in data analysis is more urgent than ever.
Moreover, a new report finds that high-performing companies are more likely to obtain, analyze and act on workforce metrics compared to low-performing companies.
There are stark differences in the reasons high- and low-performing companies collect HR data as well as who receives HR data analysis, according to a recent study by the Institute for Corporate Productivity (i4cp).
The report is based on a survey of HR professionals at 102 firms. i4cp identifies high- and low-performing companies by asking respondents how their organizations have performed within their markets during the past five years compared to other organizations.
The report, “HR Analytics: Why We’re Not There Yet,” finds 81% of respondents from high-performing companies say that HR leaders receive workforce metrics, while 52% say all of HR receives the results of data analysis. In low-performing companies, only 33% of HR leaders and 20% of all HR departments receive corresponding metrics.
“Survey responses indicate that [high performers] leave metrics to the HR department – and it is HR’s responsibility to determine the action plans from that data,” the report notes, suggesting that this “may point to a more robust, analytics-savvy HR function in more successful companies.”
In addition, 96% of respondents from high-performing companies report that they use the data that’s collected for strategic planning, while 91% use the metrics to evaluate or establish the need for programs. In contrast, only about half (47% and 59% respectively) of the low performers report the same.
Because low performers are more likely than high performers to be required to meet legal or compliance mandates with the data they collect, lower performers are more likely to use HR analytics as part of a “reactive and tactical culture,” according to the report.
“Simply focusing on doing what is currently necessary often means that activities critical to ensuring stability in the long-term, such as strategic planning, get short shrift or are overlooked altogether,” the report notes.
Both groups report grappling with finding talent with the right skills for analytics initiatives.
“When leadership does not see HR data as a priority, the trickle-down effect is that budgets are lower, time is not given to data analysis projects, and employees with the correct skills are not brought in to focus on these efforts,” according to the report. “To overcome these challenges, leadership must understand the role and use of modern HR analytics and be the role model for using them to improve performance.”
The talent management stakes are high for companies as they struggle with a predicted shortage of workers as businesses begin to expand as they emerge from the recession. That’s according to a new report from Bersin by Deloitte, an HR research firm.
The report points out that while HR is business critical, it often does not add enough value in the current global market.
“Our research shows nearly every major business is challenged with shifting talent and business towards emerging markets, while grappling with talent shortages globally – all while improving the engagement, retention and development of their workforces,” says Josh Bersin, principal and founder, Bersin by Deloitte.
“In this environment, high-performing chief human resource officers will provide a laser-like focus on high-value areas that empower and foster teamwork,” he says. “For example, programs that support business agility and innovation, continuous learning, new models of leadership and management, and workforce planning and intelligence.”
Analytics and workforce planning likely will become a priority for many large HR teams as they are forced by the talent shortage to make decisions steeped in data.
“Many large companies now have scientific models that predict the engagement of their employees,” according to a Bersin company statement. “These data-driven systems help line managers decide who to hire, how to manage for optimal performance, and what recognition programs may incent high performance. Our research shows that only six percent of HR teams feel ‘expert’ in talent analytics today, and we can expect this number to rise dramatically in 2013.”
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