Organizations must take aggressive steps to dramatically reduce human subjectivity and bias embedded in talent practices. They must rely much more heavily on AI and data analytics to drive talent decisions.
Right now, organizations face complex and difficult decisions on how to reposition and reskill their workforces at the speed of business, without making mistakes. Data-driven decision-making provides a sound foundation for deciding how to develop talent across the enterprise.
If talent development is ever going to have a significant impact on business performance, it must progress from a retrospective process to a prospective process. Only then can talent development show how, where and when talent must evolve. The talent-development process must be a mastery of both the art and science of people analytics to properly serve the needs of the business. One way or another, organizations must answer these questions and more:
- What types of candidates are the best fit for the organization based on the historical data of high performers?
- What types of employees are more likely to perform well in the current and future business environment?
- Does the organization demonstrate bias in hiring and promotion due to race, gender or other diversity categories?
- Where is the best place to invest resources to achieve maximum return on investment with talent development?
As the knowledge and digital economy continues to mature, high-octane talent development will become the most powerful predictor of business performance. The holy grail of talent development will be leveraging analytics to identify the critical success factors that unlock the full potential of an organization’s talent pool.
In other words, talent leaders must be able to predict the future using analytics to have the right talent on hand at the right place, at the right time. This is a tall order that cannot be achieved unless and until sophisticated talent analytics are part of an organization’s DNA.
Data and Analytics Should Lead Investment Priorities
Strategic use of talent data to inform and drive human decisions continues to be modest in most organizations.
In Brandon Hall Group’s latest Leadership Development research, two out of three organizations said they could not prove their leadership programs significantly impacted business objectives. Of those, 71% said they don’t have the data and analytics to demonstrate the impact.
One out of four organizations have no plans to invest time or money into talent data and analytics in 2019, according to Brandon Hall Group’s HCM Outlook Survey. Among organizations planning moderate or large investments in talent processes, data analytics ranks 12th among 14 processes.
Even when organizations do leverage data, most don’t go beyond descriptive analytics, which capture what has happened, rather than diagnostic, predictive and prescriptive analytics that show the “why” and suggest actions to take.
Our research reveals that 75% of organizations that use HCM analytics are at the tactical level, where ad hoc metrics and reports are used, or the functional level, where good data is collected but used for benchmarking and not for solving problems or forecasting challenges.
Balancing Data and Empathy
Our research also uncovers concerns about employee privacy, security of employee data, and removing empathy and compassion from people decisions. These issues have real merit and are major reasons why we believe HR must seize ownership of people analytics.
HR and talent practitioners are tuned in to the human toll that workforce decisions have. Therefore, they’re in the best position to balance the strategic necessity of data analytics to inform people decisions with the judgement, empathy and compassion needed to carry out those decisions.
We are in an era where workforce decisions can be dehumanizing. “Reduction in force,” “headcount reduction,” “right-sizing,” “workforce re-profiling,” “transitioning,” and “re-skilling” initiatives are commonplace. These initiatives are often inevitable. But they must be based on objective criteria, which often lie hidden beneath the surface, to minimize the number of employees affected and the negative impact on the remaining workforce.
The Talent Management function should be reimagined as an integrated team of people analytics specialists and data scientists along with professionals with backgrounds in coaching, performance consulting, organizational development and organizational psychology. This leads to data-based decision-making based on business needs balanced with empathy and understanding of the human condition of the workforce and the culture of the organization
People will always play an important role in talent decisions. However, for organizations to make the best talent decisions, people can no longer be the primary or single source of data and insights. Data-driven decision-making is the future of talent development. If your organization wants to optimize talent to drive business results, you must ramp up, starting right now. If you are among the 75% of organizations that use data at the tactical and functional levels, you have to make the investment in time and resources so you can utilize data at the diagnostic, prescriptive and predictive levels.
The business case for this is straightforward: every talent-development priority for your organization can be addressed by collecting and analyzing data to determine the best course(s) of action. Our research shows organizations are unsatisfied with many aspects of talent development. Climbing the maturity curve of data-driven decision-making for talent development is challenging but absolutely necessary for organizations to make the right decisions about how to best position and invest in their workforce.
Brandon Hall Group’s 2019 People Data and Analytics Survey will explore how organizations use data for communication and influence, and how data can be combined in new and different ways to create a more holistic approach – using data to shape organizations’ daily interactions rather than as a pure problem-solving tool. You are invited to participate in this important research.
The Evidence-Based Decision-Making 2019 Survey seeks to uncover how mindset and process play a role in creating a more analytical business culture. The data and insights from this research will help organizations achieve their people-analytics goal: creating a data and analytics cultural transformation, a structured evidence-based system and a culture that trusts the numbers. Click here to participate.
–Claude Werder, Vice President and Principal HCM Analyst, Brandon Hall Group
We are a human capital management research and advisory firm with more than 10,000 clients globally. For over 25 years, we have been delivering research-based solutions that empower excellence in organizations around the world. Our vision is to inspire a better workplace experience. Becoming a Brandon Hall Group member means our team joins your team. Membership provides a host of resources and services and – most importantly — a seasoned team of thought leaders and client support professionals dedicated to your success.