HR Analytics and Predictive Advantage: Still Miles Apart

W020140515335593705029“The beauty of advanced analytics … is that it ‘does not care who it annoys.’”

I love a good quote and that one’s a gem.

It comes from James C. Sesil and appears in Dr. Salvatore Falletta’s report, In Search of HR Intelligence: Evidence-Based HR Analytics Practices in High-Performing Companies. If you’re an HR professional, an analytics devotee or simply someone who’s fascinated by how businesses operate, get your hands on a copy of this report. It’s intriguing and not at all dated despite being published in 2014.

I’ll get back to that awesome opening quote in a bit. But first, a little background on the report itself …

It summarizes the results of The HR Analytics Project, which Dr. Falletta conducted at Drexel University to learn how high-performing companies—those with superior annual gross revenues—are utilizing HR research and analytics.

He surveyed more than 200 companies (195 of which were Fortune 1000 companies) in 47 industries. I won’t even attempt to recap the dozens of eye-opening insights you’ll find in the report. But here are a few items to help you decide whether to download the report for yourself:

  • The survey asked participants questions related to five core issues including the types of HR research and analytics practices being implemented in their organizations; how HR research and analytics activities are organized and structured; and the extent to which HR research and analytics facilitate HR strategy, decision-making, and execution.
  • As you’d expect, HR departments at high-performance companies implement research and analytics practices not found at less-successful organizations.
  • And high-performance companies perform a broad range of HR research that extends beyond simple metrics and scorecards.

Dr. Falletta’s research leads him to this conclusion, which I find both utterly unsurprising and yet somehow astounding: “In short, HR analytics has a long way to go. More often than not, data and analytics are used to support decisions that have already been made rather than to question the current path of HR strategy and planning within large companies.”

Why This Isn’t Surprising
Given what we know about human nature, the unempirical way we tend to put empirical information to use, and how businesses function in general, you’d have to be pretty naïve to think that HR practitioners would be leading the charge in the strategic and predictive use of analytics. Even savvy business leaders and heads of corporate functions (especially those with big egos, as Falletta points out) are often more comfortable relying on their opinions and intuition rather than on external data. If leaders can support their opinions and intuition with data after the fact, precious few of them are going to feel the need to challenge their preconceived notions … or alter their decision-making process to circumvent intuition and opinions.

Why It’s Also Astounding
HR has been talking about transforming itself for well over a decade now. Unless you’ve been living under a rock, you’ve heard the goals of this transformation countless times: to become more strategic and less transactional … to make evidence-based decisions rather than gut decisions … and to provide the c-suite and functional leaders with a steady stream of actionable people data to improve innovation, productivity and the bottom line. All well and good. But despite year after year of laboring on this transformation, HR continues to fumble over the use of data and analytics. The function still isn’t leveraging them widely for predictive purposes, which is where the real business value and potential for transformation lie.

Instead, HR continues to use data and analytics to support decisions that have already been made. Ay, caramba! Let’s not expect that seat at the strategy table to materialize anytime soon.

Just To Be Clear …
HR is not the source of all of the business world’s analytics problems—and it’s not the only discipline with these shortcomings. Not by a long shot. Which brings us back to that gem of a quote about advanced analytics not caring who it annoys.

Hard data and analytics can scare the bejeezus out of people in power—not just in HR but throughout the entire organization. The reason, according to Dr. Falletta and his source materials? “Using data to make decisions changes the power dynamics in a company. For example, a powerful and/or narcissistic leader would probably prefer to make decisions based upon his or her opinions and rather than relying on facts and figures (i.e., evidence).” So we’re back to human frailty again.

Sesil—the source of the opening quote—posits that those in positions of power might also be primarily concerned with advancing their own agendas rather than dealing with facts. They rebuff hard data if it annoys or challenges them (although it’s hard to ignore the fact that many famous and highly successful leaders have based their careers on this approach.)

At the end of the day, as Dr. Falletta’s report makes clear, HR analytics is both a science and an art. Until we figure out a way to blend the two more elegantly and not be annoyed by the facts, the predictive benefits of HR analytics will continue to remain miles beyond our grasp.

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