HR Professionals: Are you ready for People Analytics?

August 28, 201412:06 pm1558 views

Statistically speaking, a degree from a fancy college has zero correlation with success in writing software. This is an example of the type of  insights from people analytics, the hottest new area within human resource management that aims to bring big data to the task of corporate hiring and promotion and managing people.

On the surface, people analytics promises to to revolutionize traditional hiring and management practices- by getting rid of of intuition, old-boy networks and other outmoded rules of thumb in management and hiring. The way forward, it promises, is going to be computerized tests, database searches and quantifiable performance metrics.

Yet this isn’t drastically different from the way companies used to screen the best talent. Managers have always relied on their observations to make educated guesses abut people. HR practice has further augmented these observations by developing tools like surveys and interviews- and establishing new metrics to quantify performance.

So why are people analytics a radical change from the norm?

One Word- Data.

The real reason why people analytics leading an HR revolution is data- and the reason for this is the explosion of hard data about our behavior at work. By data- we refer to everything from E-mail records, Web browsing behavior, instant messaging logs, logs from all  other digital systems used at the workplace- which give detailed information about  how people work. Data that’s allowing us to understand who communicates with whom? How is IT tool usage related to productivity? Are there work styles that aren’t well-supported by current technology?

Yet this data is just part of the people analytics story.

Big Data looks beyond data from the virtual world- and is now looking to electronically log information from the physical world as well- something that’s developing at a breakneck pace, thanks in part to the development of wearable technology.

Wearable technology in the workplace can range from from company ID badges to cell phones to environmental sensors- and they provide reams of fine-grained data on interaction patterns, motion, and location, among other things. Since face to face communication and collaboration is a key aspect of a person’s workplace behavior,  data that’s being collated from these devices are becoming an increasingly critical aspect in people analytics. By combining data from both real and virtual worlds, people analytics promises to deliver a deeper understand of a person’s behavior on a scale that was previously unimaginable.

How Bank of America made $15 Million with People Analytics.

Some companies are already using this approach to boost productivity. For example, the Bank of America(BAC) applied people analytics to understand why their call centers were suffering from a high turnover.  The data highlighted that the biggest predictor for performance was looking at who employees talked to among their colleagues- this single metric was six times more predictive than any other.

So why weren’t their call center staff collaborating enough? When Bank of America examined their policies, they found that call center employees were asked to take breaks that didn’t coincide with anyone else’s. Therefore employees would overlap lunches by just 15 minutes or less, which was when 80% of interactions took place.

Armed with this knowledge- Bank of America implemented a key policy change- they allowed teams to take breaks at the same time. In three months, the results were amazing- their call center staff were taking calls 23% faster than before and team cohesion was up by 18%. This alone translated to $15 million extra for the company.

The Ethical consideration of People Analytics

There are many who would argue that collecting information and analyzing it could be a gross violation of personal privacy and employees and potential employees would be well within their rights to expect that companies can’t snoop where they can expect to have a reasonable expectation of privacy— for example the number of toilet breaks they take in a day- and that any evaluations that people analytics may make aren’t based on factors that discriminate against race, class or sexual orientation.

At this juncture- its important to use data-gathering technology on an opt-in basis with the understanding that participants will be anonymous and no individual data will be disseminated. This approach is the right thing to do, and the only way this technology will gain broad acceptance.

What the Future Holds

Of course people analytics will raise several philosophical questions. As professional performance becomes easier to measure and see, will we become slaves to our own status and potential, ever-focused on the metrics that tell us how and whether we are measuring up? Will too much knowledge about our limitations hinder our achievement and stifle our dreams?

Scholarly research strongly suggests that happiness at work depends greatly on feeling that one is in control of their circumstances. If people analytics tools can really get more people into better-fitting jobs, then the argument follows that their sense of personal effectiveness will increase. And if people analytics can provide employees with better guidance on how to do their jobs and how to collaborate with their fellow workers and clients- then those employees will experience a heightened sense of mastery.

It is possible that some people who now skate from job to job will find it harder to work at all, as professional evaluations become more refined. But on balance, these strike me as developments that are likely to make people happier.

And more importantly- one must realize that people analytics will not obviate the need for old-fashioned human judgment in the workplace. So HR teams- don’t worry- your job can’t be done by a computer.

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