Today’s business executives are increasingly applying pressure to their Human Resources departments to “use predictive analytics”.
This pressure isn’t unique to Human Resources as these same business leaders are similarly pressuring Sales, Customer Service, IT, Finance and every other line of business (LOB) leader, to do something predictive or analytical. Every line of business (LOB) is clear on their focus. They need to uncover predictive analytics projects that somehow affect their bottom line. (Increase sales, increase customer service, decrease mistakes, increase calls per day and the like).
Human Resources Departments have a Different, and Somewhat Unique, Challenge not Faced By Most Other Lines of Business
When Human Resources analysts begin a predictive analytics initiative, what we see mirrors what every other line of business does. Somehow for HR, instead of having a great outcome it can be potentially devastating. Unless the unique challenge HR faces is understood, it can trip up an HR organization for a long time, cause them to lose analytics project resources and funding, and continue to perplex HR as they have no idea how they missed the goal of the predictive initiative so badly.
Human Resources’ Traditional Approach to Predictive Projects
Talent Analytics’ experience has been that (like all other lines of business) when Human Resources focuses on predictive analytics projects, they look around for interesting HR problems to solve; that is, problems inside of the Human Resources departments. They’d like to know if employee engagement predicts anything, or if they can use predictive work somehow with their diversity challenges, or predict a flight risk score that is tied to how much training or promotions someone has, or see if the kind of onboarding someone has relates to how long they last in a role. Though these projects have tentative ties to other lines of business, these projects are driven from an HR need or curiosity.
HR (and everyone else) Needs to Avoid the “Wikipedia Approach” to Predictive Analytics
Our firm is often asked if we can “explore the data in the HR systems” to see if we can find anything useful. We recommend avoiding this approach as it is exactly the same as beginning to read Wikipedia from the beginning (like a book) hoping to find something useful.
When exploring HR data (or any data) without a question, what you’ll find are factoids that will be “interesting but not actionable”. They will make people say “really, I never knew that”, but nothing will result. You’ll pay an external consultant a lot of money to do this, or have a precious internal resource do this – only to gain little value without any strategic impact. Avoid using the Wikipedia Approach – at least at first. Start with a question to solve. Don’t start with a dataset.
Human Resources Predictive Project Results are Often Met with Little Enthusiasm
Like all other Lines of Business, HR is excited to show results of their HR focused predictive projects. The important disconnect. HR shows results that are meaningful to HR only. Perhaps there is a prediction that ties # of training classes to attrition, or correlates performance review ratings with how long someone would last in their role. This is interesting information to HR but not to the business. Here’s what’s going on.
