Across a number of industries, analytics has become an integral part of the way organisations operate and make decisions. Data is king and being able to leverage it effectively is now an essential skill in the pursuit of competitive advantage.
However, you can have all the data in the world, but analysing results and getting the right insights are what really matter. HR departments must have the capability to generate solutions that matter to the business, by becoming much more adept at seeing the potential in data and being more agile when it comes to predicting future trends.
This is made even more challenging by the shift in today’s workplaces, where work patterns and a multigenerational workforce with different needs have seen an increase in flexible working arrangements. So, at the same time as applying more agile thinking when creating new policies on work arrangements, HR leaders should be developing themselves and their teams to become what I would call 'people economists'.
So what will it take to enable HR departments to better use their data and turn it into actionable insights?
For quite a few years the subject of people analytics has grown and has now reached a high level of complexity. With various sources, subjects and considerations at play, HR teams have more data at their fingertips than ever before. When I think about HR’s overall role in an organisation I see a huge amount of potential in understanding the bigger picture from this intricate tangled web of market data. This is what I mean by being people economists: it’s making sense of the data available and using that insight to create solutions for the organisation now and in the future.
The ability to gain insights from data will differentiate the good from the great when considering the HR department’s ability to add value to the organisation.
With the advent of emerging technologies such as artificial intelligence (AI) and machine learning (ML), we’re now much better equipped to understand and gain insight from the vast data lakes we have at our disposal. There should be no excuses that we don’t have access to the data we need.
Economists don’t focus on just one set of data; they deal with social, geographical, political data and so on. Through in-depth analysis and experience, clear insights and strategy on future courses of action can be reached. This is an area where HR departments can benefit greatly: by looking at a wider range of data sources they can learn a huge amount about defining and predicting new ways of nurturing and growing their workforces.
The people economist transformation
When I think of transforming a traditional HR department and building its capability as a team of people economists, there are seven key traits that are integral to success:
- Critical thinking – deductive and inductive reasoning to process and generate information and beliefs.
- Big-picture thinking – looking at the bigger social, geographical and legal pictures, both internally and externally.
- Curiosity – being eager to ask questions to gain further understanding.
- Continuous learning – using the data to learn, not making early assumptions, and keeping their minds open.
- Being data-savvy – having a strong knowledge of which data matters most and being good at manipulating the data for further understanding.
- Building networks – using their network to facilitate the findings and interpretation of data.
- True context of business – understanding the business model, strategy, plans and market position.
Datasets are only as useful as the insights and analyses made of them, so HR departments need to incorporate the above traits into their overall philosophy. In doing so they will be able to have a greater understanding of future trends, enabling them to become more agile and to mitigate against potential threats while also taking advantage of potential opportunities.
This isn’t something that will happen overnight, and it requires a shift in focus from data management into data insights. But by creating and developing HR's capability as people economists, the function will be in a better position to help make the business stronger and more competitive.
David Morgan is HR director, international at Kronos