Big Data has been a buzz term for a number of years now. The fact that it’s a big driver of high-level decision making in many businesses outlines just how important Big Data has become to Australian organisations.
In the HR world, we’ve witnessed Big Data transcend industry and market analytics and move into workforce planning – and we shouldn’t be surprised.
All we have to do is take a quick look back to see how we’ve gotten to this point. Even going back 15 years, the way we manage our workforce has radically changed.
HR used to be referred to as the ‘Personnel’ department. HR’s main concern was transactional relationships – Hiring, Holidays and How-to-Stay-Compliant. Nowadays, most businesses recognise that people are the most valuable asset an organisation has, which is why they account for 70% of the typical company’s expenses.
Awards were given for tenure, not performance. With the median tenure in the US for 25-34 year olds in 2012 being 4.2 years, it just doesn’t make sense to reward tenure like we used to. Instead, we now reward performance – or at the very least, value it as a better measure of employee value than tenure alone.
We recruited through classifieds and (offline) networking. Can you imagine finding a new candidate without LinkedIn, without social media and without online job boards? This outlines more than anything how much HR processes have changed in a relatively short period of time.
With this shift in focus into more performance-based, dynamic people management, there’s inevitably one thing every HR manager now has in abundance – questions.
What determines a high-performing employee? Why are these employees always absent? Which departments are providing the highest return on investment?
To answer these questions, HR needs data, and to get the right data, we need sophisticated analytics tools.
It’s a basic equation: people are the biggest operational expense, so we we need to manage them effectively to improve our bottom line. We can’t rely on ‘gut feelings’ – we need hard data to make business decisions. The cost of mismanagement can be devastating, so we will invest in good data to make good decisions.
On top of this, businesses know that their competitors are either using workforce analytics to create a competitive advantage or are considering how to better utilise workforce metrics to make strategic decisions, which creates a strong incentive to transform HR with workforce analytics sooner rather than later. If we don’t understand our workforce now, we could lose our high-value staff to the businesses that do.
It’s been a logical journey for businesses to adopt workforce analytics, but ultimately, the reason why it’s so important now is because, once again, the times have changed. As always, businesses must choose whether to move forward and seize the advantage or be left behind.
To find out how to construct the business case for workforce analytics, download the free whitepaper here.