What skills are required of a data analyst to work with the HR profession? We all know that data analytics is a hot topic in the HR profession right now. Data analytics can be a powerful tool for the HR profession. It can be used to highlight talent or leadership shortages in a global firm or boost employee engagement.
Unfortunately, many global firms believe that analytics is one of the areas where organisations face a significant capability gap, according to a Deloitte global human capital trends 2015: Leading in the new world of work report. The study of 3,300 HR and business leaders in 106 countries revealed that 75 percent of companies believed that using people analytics was ‘important’ but just 8 percent felt their organisation was ‘strong’ in this area.
The increasing importance of data analytics to the HR function and the role of analytics in impacting the bottom line of an organisation has put the spotlight on the role of an HR data analyst.
Can these analysts be created from inside the profession and what are the challenges and opportunities presented by analytics to the HR profession? How can the HR profession grasp the opportunities presented by analytics?
Getting to know data analytics
Data analytics has been around for a long time. The only thing that is different is that the technology behind it works and can give you more data differentiation between data insights and action.
There is also a difference between how HR functions in large FTSE100 firms are using the data. Organisations which have begun to invest in some HR information software will be in a position to generate data and share that data much more readily –this will be the kind of data which is relational in that it is well-structured, relatively reliable and can be exploited using data warehouses.
Only a few, larger firms will be in a position to start asking questions related to complex analytics and big data. Very few organisations know how to work with big data and it hasn’t got a lot of strong applications in HR yet.
Big data refers to the fact that the amount of data is doubling every year and the IT tools that are now available mean it is possible to analyse these data in real time to deliver insights that can enhance business performance. IBM data scientists break big data into four distinguishing characteristics: velocity; volume; veracity and variety. Depending on the industry and organisation, big data encompasses information from multiple internal and external sources such as transactions, social media, sensors, enterprise content and mobile devices.
Why does data analytics matter?
Organisations that build capabilities in people analytics out-perform their peers in quality of hire, retention and leadership capabilities and are generally higher ranked in their employment brand, according to a High-impact talent analytics: Building a world-class HR measurement and analytics function report by Bersin by Deloitte.
A data analyst doesn’t need to sit in the HR function. Some HR experts prefer a data analyst didn’t sit in HR, but worked across the business functions. The real power is linking your people and capabilities data to your sales and finance data.
Having analysts that can pull in data from all parts of the business is important. The danger of an analyst sitting in the HR function is they will not have the relationship with other functions or make the link to other parts of the business. You also need HR people who understand the business issues and translate that into a data task and then HR can present back to the business.
The increasingly sophistication of data has massive implications for the HR profession. Firstly, it is about how to get HR connected to business and the second implication is that people in HR have to be comfortable with data. They do not have to be data analysts themselves, but understand the potential of data to direct their activities in the right direction and understand enough about data not to be blinded by science.
What It Takes to be an HR Data Analyst
A survey of how companies are recruiting and managing their data talent entitled ‘Model Workers’ highlights that the skills of data scientists who have the hybrid skill set to do this type of work is at a premium.
“Almost all the companies we interviewed regardless of their data mode are looking for analysts with a data scientist profile, including a mix of analytical and coding skills and creativity and business know-how,” commented Juan Mateos-Garcia, author of the ‘Model Workers’ report and an economics research fellow at Nesta Policy and Research, an innovation foundation.
There are a bunch of skills that are generic to data analysts, said Mateos-Garcia. “This is the ability to extract information from data in a robust way and increasingly there is a need for computing skills and to be able to work with spreadsheet applications and databases. Then you need the domain knowledge where it is important for an analyst to understand what is going on in HR. In addition, you need a bunch of competencies such as the ability to collaborate across disciplines and business know-how. These capabilities and competencies are proving difficult to find.”
The shortage of HR professionals with knowledge and experience of data analytics is due to the fact that HR is still relatively new to this discipline, commented Jason Geller, US human capital leader for Deloitte Consulting.
“They are simply not confident in their ability to seamlessly and effectively build and incorporate people analytic programs into their business models. Moreover, we see shortages both within organisations and in the labor market for professionals that possess the combined skills required to perform people analytics such as talent knowledge, analytics expertise, information design and technology savvy. The strategy that we have seen success in is hiring for one or two of these skill areas and training for the others to round out the capability.”
The limited availability of HR analytics professionals means that many global firms are targeting specific degree types to help accelerate the development of this capability, remarked Geller. “The degree types that have proven effective for HR data analysts include engineering, maths, statistics, economics, industrial and occupational psychology. Companies that are seen as leaders or strong in the area of analytics tend to have dedicated staff working within the HR function focused specifically on HR and people analytics on behalf of the HR function and the business.”
There has been a huge explosion in advertisements for data analysts. There are not many people who have those skills. Indeed, a ‘Big Data: The next frontier for innovation, competition and productivity’ report by McKinsey Global Institute estimates that the US alone faces a shortage of 140,000 to 190,000 people with deep analytical skills as well as 1.5 million managers and analysts to analyse big data and make decisions based on their findings.
Analytics that fuses HR and business data, otherwise known as people analytics, can maximise talent decisions to drive higher levels of organisational performance that ultimately drives shareholder value, remarked Geller.
“Leading organisations are using people analytics to understand and predict retention, boost employee engagement, improve quality of hires and profile high performers. However, the vast majority of organisations are still playing catch-up and suffering from poor data quality, lack of skills and a weak business case for change.”
See also: Why Your HR Data is Presumably Bad