Balancing the Promise and Pitfalls of Human Capital Analytics

June 12, 201510:00 am2529 views
Balancing the Promise and Pitfalls of Human Capital Analytics
Mapping both risks and opportunities for the next generation of Human Capital Analytics (HCA)

Human Capital Analytics (HCA) allows organisations to leverage on the power of real-time workplace data and reap significant competitive advantages. However, increasing use of this technology at workplace can also be perceived as “spying” on employees and this erodes trust and undermines efficiency.

According to a recent report by The Conference Board, Big Data Doesn’t Mean ‘Big Brother’: Employee Trust and the Next Generation of Human Capital Analytics, it provides a comprehensive review on the promises and pitfalls of cutting-edge Human Capital Analytics (HCA). Through these findings, employers can derive unprecedented insights into the strengths, weaknesses and dynamics of their workforce.

“From real-time sentiment polls to email header and calendar analysis to electronic sensing, new technologies help companies identify the behaviour patterns of top performers, help other employees improve, and spot emerging issues such that leaders can address them quickly,” said Mary Young, Principal Researcher, Human Capital at The Conference Board and a co-author of the report.

Young added: “But they can only do so if employees understand why the company wants to collect additional data, agree to participate, and trust that this information won’t be used against them.”

This report draws on case studies from the early adopters of HCA and maps both risks and opportunities for the next generation of human capital analytics to benefit both the employers and employees alike. Some key insights drawn from the findings are:

  • Trust is of paramount importance

An HCA initiative is only as powerful as the employees’ willingness to share personal information. It will not mask their true thoughts and feelings of fear for being identified or punished.

  • Legal requirements aren’t insurmountable

With properly designed opt-in and anonymisation protocols, even companies operating in countries with tough data-protection rules can leverage next-generation HCA tools legally and profitably.

See: HR Analytics:Go data crunching and set communication protocol

  • Need to establish a clear business case

Before collecting and analyzing new kinds of employee data, it is important for companies to establish a clear business case. The case established should be easily understood by the entire workforce and not just the legal and privacy officers.

  • Providing for overall workforce dynamics

While employees might fear the “Big Brother” surveillance during workdays, it is important to realise the actual value of next generation HCA, which does not lie in tracking employee behaviour patterns but in maintaining and managing the overall workforce dynamics.

“By anonymizing and aggregating employee data, companies can overcome privacy concerns, meet legal requirements, and gain real-time insights about their workforce and even emerging issues on the marketplace,” according to the release.

“When an organization stakes its future on the value it can create by managing people, a quantitative-analytical approach is vital to seizing opportunities, reducing risks, and fine-tuning decisions to enhance efficiency.”

HR leaders of today are required to think more like economists, to study and direct the allocation of resources, embrace the fact that talent is scarce and harness the information available by looking at macroeconomic indicators.

“Thinking like an economist can help refine talent decisions from recruiting and retention through training, rewards design, and team composition. More importantly, the economist view can help extend the value of HR to the whole organization, by driving decisions in strategic areas such as M&A, new market entry, and innovation,” Deloitte report said.

Also read: HR Professionals: Are you ready for People Analytics?

Image credits: solvait.com

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