Human capital is one of the biggest assets of successful companies and keeping them productive and happy is essential. New digital innovations in data analytics promise to help the human resource department do just this. We investigate the latest developments.
Having been traditionally seen as one of an organization’s support structures and a mostly reactive department, HR has developed its role greatly. Today, thanks to digital transformation shaping every area of business, HR has become a much more wide-reaching and proactive function in the organization.
Human capital describes the economic value an employee's skill set brings to a company. And today, data analytics enable HR departments to build employee profiles, conduct performance reviews that are ongoing and therefore more beneficial, and make personnel management more personalized.
Human capital management using data analytics can help businesses improve productivity, increase sales, and improve average employee performance, while also aligning company values with those of employees.
The HR data imperative
HR analytics utilizes both ‘people’ data, data gathered from HR systems such as payroll and work attendance records, and also business-related data like employee performance reports to give employers greater insight into their workforce.
This gives the HR department the ability to replace the annual performance reviews with continuous feedback. Performance reviews are often viewed as a waste of time, often by both employee and employer, since they yield reactive, short-term results. So much so that in 2015, one survey revealed that 90 percent of business managers were unhappy with how reviews are carried out, and a further 90 percent of HR leaders said the practice generated inaccurate information.
With continuous assessment however, human resource departments can be much more responsive and proactive. They could perhaps identify that an employee would be better suited to another role or target specific training to enhance professional development. All of which would help improve performance and job satisfaction, to the benefit of both the individual and the company.
To support these initiatives, a survey from HR software provider Fairsail and found that 65 percent of respondents believed HR departments will include people scientists within the next five years. These specialists in HR departments focus on the employee experience as a business-critical factor and put a company’s people at its heart.
Making HR data work for you
In the ultra-competitive digital age, companies need to gain an advantage wherever they can – and improving your human capital is a great area to get an edge. Some best practices to bear in mind to achieve this include:
- Focus HR analytics appropriately. To maximize the possibilities of the data available and use it to transform the way HR works, begin by prioritizing scalable projects. Help managers and business units hit strategic goals using HR data rather than using it to fulfill traditional, on-demand data requests. Big wins and a strategic approach are great ways to garner senior support for analytics in HR from high level stakeholders in the organization.
- Get the right blend of skills in your HR team. To maximize data analytics in HR you need to cover a variety of bases – one skillset required is a team member capable of challenging business units and senior executives, who can influence them and convince them of the value new data-based HR processes and approaches can bring to the overall business. A HR team member who specializes in big data analytics from a HR perspective is also essential, while so too is a member who can design and manage databases that incorporate all these new sources of data. Some organizations will find that they need an external partner to provide these.
- Seek out credibility. It is one thing to focus on strategic, data analytics-based HR to improve the company and the way employees work, but it helps you hugely if you can secure buy-in from senior figures who will champion your digital, data-based approach.
- Think digital means think social. Continuous feedback initiatives using data analytics can over time take on some traits of social media, where engagement between teams, managers and HR departments becomes effectively viral. One HR interaction can trigger an immediate reaction and subsequent solution, compared to historic HR processes that were long-winded and time-consuming.
- Pay proper attention to ethical issues and data protection. This includes being transparent with employees about what you are doing, and stressing that it is not about monitoring – instead about being enabled. On the data protection side, businesses need to be very careful about how they process personal data and know at all times where this data is held.
The path to digital HR and human capital management
An effective digital HR department should be analyzing employee data and using it to manage their workforces, make better-informed decisions and execute HR processes in a simpler way. Companies should use data analysis to redefine the employee experience and help make employees more productive and happier with their work-life balance.
By using agile, digital approaches and techniques, companies can drive greater interaction between managers or team leaders and collaborators in the organization, helping define and personalize individual responsibilities, design individual development strategies and monitor performance and initiatives trends. Digital transformation can be central to HR moving forward and organizations making the most of their human capital, but only if that data is analyzed and utilized correctly.
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I’ve been writing about technology for around 15 years and today focus mainly on all things telecoms - next generation networks, mobile, cloud computing and plenty more. For Futurity Media I am based in the Asia-Pacific region and keep a close eye on all things tech happening in that exciting part of the world.