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Tuesday, January 17, 2017

Predictive Analytics in HR: 5 Predictions

By Scott Mondore, co-founder and managing partner at SMD

Everyone can probably agree that predictive analytics is not going away (it's a good thing, too because leveraging the approach properly will behoove an organization). The following are predictions about how this approach will impact HR leaders, their organizations and the HR field in the future.

The Data Balancing Act

HR will still struggle with the balancing act in 2017. That means that there is a balance between just having more data and having the right insights from the data. Think about all the data HR already owns: HRIS, employee surveys, 360 feedback, candidate data from an ATS, performance management ratings, etc. The reality is that a lot of data already exists, and many practitioners will continue to have an insatiable—and unnecessary—need for more data.

If this prediction comes true in your organization, remember that your real need is to harvest the power of data to identify drivers of outcomes. HR functions are better off leveraging the intelligence from the data they have than racing to gather more data.

Adoption and Change Will Be Slow

The adoption of predictive analytics in the HR world will be relatively slow in 2017. This may not seem like a bold prediction, but it’s certainly worth discussing. Think about it: many HR professionals went into HR because they love working with and helping people. Not as many chose HR because they love numbers and statistics. So, many HR professionals understand that analytics can greatly help HR contribute more to the bottom line, but they may not have the proper skills to effectively apply analytics.

A Competitive Advantage with ROI … for Some

HR organizations that use analytics the right way will have a significant competitive advantage because few will do so quickly. Below is a list of reasons that will drive—and almost force—HR to achieve this competitive advantage:

Quizzical CEOs: One day soon, CEOs will start asking CHROs “What exactly is the ROI of all these surveys and assessments?” The only way to identify the ROI is through the application of analytics.

KPI confidence: HR will stay in its comfort zone for a while by focusing on KPIs such as turnover. That’s because turnover is a key metric with real costs and one that HR feels comfortable owning. Eventually, most organizations will start to show direct business impact on other KPIs, such as sales, revenue, productivity, operations, and customer satisfaction.

Bad Analytics Leads to Bad Business

There are lots of vendors jumping on the analytics bandwagon. Most of these tools and approaches use very basic methods and don’t connect results directly to business results. Others are pushing new approaches based on machine learning and algorithms. These may be truly innovative, but be very careful in this area. Remember that one of HR’s primary roles is risk mitigation and that some of these “new” approaches introduce very real risks.

Demand for Analytics Skills Will Grow

There’s already a massive shortage of HR professionals that lack skills in analytics. The demand for expertise in this area will continue to grow in 2017.

Statistics surge in schools: HR educational programs will emphasize statistics and data analysis.

Skill set search: Organizations hiring for HR roles will increasingly seek out candidates with these skills. HR leaders don’t have to be statisticians, but they must understand the application of analytics and be good consumers.

Are you I/O?: Demand for I/O psychologists in HR functions will skyrocket (and in fact, is already occurring). Predicting human behavior and performance is very difficult and complicated. I/O psychologists know how to do this – hence the increased demand for their skill sets.


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