Big Data in HR2
Everyone’s talking about big data — but what does it mean for HR and for
HR professionals?
• How can HR harness big data insights to help make better informed
business decisions?
• How useful is big data to the HR function in anticipating and
predicting workforce trends?
• Can big data help HR professionals (HRPs) establish themselves as
strategic partners in their organisations?
Executive Summary
HR big data — like big data in any other field of business — is all
about offering businesses insight about their operations. But
ultimately, the value of an HR big data initiative depends on the
usefulness of the insights it creates.
Embracing big data and HR analytics will allow HRPs to engage
more knowledgeably as strategic partners to the business.
HRPs need to be more ‘data fluent’. Big Data presents a challenge
to the HR profession’s adoption of HR analytics - and more and
more HRPs are acquiring the necessary mindset and skills.
Traditionally, HR data has been disorganised: distributed across
multiple functions within an organisation and often across multiple
databases or systems. Cleansing and structuring data is the first
step to adopting HR analytics — and this is a major challenge.
But data is not the whole story. HR’s relationships (networks) and
experience will continue to play central roles in shaping the future
of organisations.
The value of an HRbig data initiativedepends on theusefulness of theinsights it creates.
The big questions being asked
Big Data in HR 3
In April 2014, ADP brought together some of Europe’s leading HR thinkers
and practitioners to consider these questions and suggest some answers.
The HR Question Time panel
Maria Black, President of ADP TotalSource
Dr. Max Blumberg, Research Fellow at Goldsmiths, University of London; and Founder, Blumberg Partnership
Dr. Anthony Hesketh, Senior Lecturer and Associate Professor, Lancaster University Management School
Matt Stripe, Group HR Director UK & Ireland, Nestlé
Trevor Townsend, Product Director, ADP UK
Chair: Jackie Murphy, Managing Director, Flagship Consulting
This ADP Perspective paper captures the main points of a thought-
provoking and fast-paced discussion. It catalogues the chief topics
addressed by the ADP HR Question Time panel, and offers some key
insights to take the debate forward.
There was consensus on issues such as the value of big data in helping
HRPs and their peers gain a clearer view on key people factors like talent
management. Everyone could agree on the need for HRPs to become
‘data fluent’: to understand the language of big data and be comfortable
speaking it. But there was also a lively diversity in views, particularly on
whether the adoption of big data could enhance the status of HRPs within
their organisations.
Big Data Question Timepanellists (left to right):
Max Blumberg, Maria Black, Matt Stripe, Anthony Hesketh
and Trevor Townsend
Finding answers to the big questions
Big Data in HR4
Big data defined – it’s all about value
Big data is clearly on the business agenda, and impressive claims are
made about its potential to “transform every aspect of the organisation”1.
But what does big data mean in the context of HR — and is everyone
talking about the same thing?
Steering away from technical definitions, the panel preferred to talk about
big data in terms of outcomes. For Dr. Max Blumberg, HR big data means
“using all the data available to you to improve the performance of your
workforce.” Agreeing that “big data equals better outcomes”, Trevor
Townsend added that achieving those outcomes depends on how
effectively the organisation deploys big data insights.
For Maria Black and Matt Stripe, big data’s role is in helping leaders make
better decisions and providing the evidence they need to support those
decisions. As Maria Black said, it is about actually “doing something” with
big data.
Dr. Anthony Hesketh challenges the textbook “Three V’s definition of big
data: Volume (there’s a lot of it), Velocity (it moves fast) and Variety (it
comes from multiple sources)”. Instead he offered his own modified trio
of: “Volume, Veracity (i.e. can you trust this information?) and Value (i.e.
what is the Return on Insight, how does it help you value your people?)” as
the pillars of HR big data.
Transparency and globalisation driveHR data onto the business agenda
Why is big data so topical right now? For Maria Black, globalisation is the
explanation. Competitive pressure compels companies to anchor resource
and investment decisions in big data insights to gain competitive edge.
For Matt Stripe, a growing need for transparency is pushing HR big data
up the agenda. Websites like glassdoor.com — “the TripAdvisor for job
search” — mean outsiders, such as prospective employees and
competitors, can see deep inside a company. HR big data could prepare
companies for transparency, helping them make sense of a complex
interconnected world and giving them insights to drive the appropriate
people strategy.
Steering away fromtechnical definitions,the panel preferredto talk about bigdata in terms ofoutcomes.
"HR big data couldprepare companiesfor transparency [...] giving theminsights to drive theappropriate peoplestrategy."
Matt Stripe
Big Data in HR 5
The other panellists looked to events within the HR function. Dr. Max
Blumberg believes the experience of outsourcing is forcing HR to become
more organised in its handling of data, and therefore more aware of its
value. Dr. Anthony Hesketh detects a growing willingness to allow HR data
outside the organisation but within the boundaries of adequate data
security. Previously, this information has been seen as too sensitive to share.
Meanwhile, some of the panellists warned against being seduced by the
hype around big data, with Matt Stripe stressing that big data is
fundamentally an “evolution” of HR reporting, and Dr. Anthony Hesketh
arguing that many commentators are in danger of overplaying its potential
through what he called “big data, no theory”.
Understanding data can lead to betterdecision-making
The panel agreed that it would be great if HR big data could help business
leaders predict and shape the future. But there were differences of
opinion on the ability of big data to fulfil this promise.
Matt Stripe is sceptical. Big data provides useful insights into the business
today — what Matt refers to as the ‘Reveal’ dimension. It can also drive
forward-looking initiatives like Strategic Workforce Planning - the
‘Enhance’ dimension. But it has limited use in the predictive or ‘Model’
dimension because there are too many questionable assumptions.
Dr. Anthony Hesketh also doubts the benefit of big data in modelling the
future. Business leaders should rely on their insight and experience —
what Anthony terms ’executive craft’. HR analytics cannot substitute for
that. “Smart executives don’t need analytics. Their experience allows
them to see value that others don’t.”
Dr. Max Blumberg, however, believes HR big data can shape business
outcomes, citing the example of a company which used HR big data to
build a demographic profile for recruiting sales teams. Revenues
reportedly increased by over 30 per cent in countries that had used the
model.
“Smart executivesdon’t need analytics.Their experienceallows them to seevalue that othersdon’t.”
Dr. Anthony Hesketh
Big Data in HR6
Making sense of the numbers: are HRprofessionals ‘fluent in big data’?
A 2013 research project by the CEB2 revealed that the majority of HRPs do
not know how they could use big data or HR analytics to support their
work. The panel considered to what extent HRPs possess the numerical
and analytical skills to deal with big data.
Dr. Anthony Hesketh believes HR tends to “talk in PowerPoint”, while
other functional departments “talk in Excel”. Besides creating
communication issues, he warned that unfamiliarity with numbers could
make it difficult for HRPs to make informed decisions about where and
how to deploy HR analytics.
According to Matt Stripe, HR has not traditionally harnessed metrics
effectively. He describes many HR measures as ‘so what?’ measures,
offering up basic numbers about absence and attendance that do not help
leaders make better decisions. Instead, he argued that HRPs need to
provide meaningful strategic insights and ask the right questions, so as to
understand what is going on in the business and help shape future growth.
Reinforcing HR’s place in the boardroom
The status of the HR professional is a recurring theme in the debate on
big data. So can big data finally hand HR the key to a permanent position
in the boardroom?
Matt Stripe disagrees with the premise of the question: “The argument
about why HR is not in the room is 10 years old. If you’re not in the room,
you need to ask yourself why”. He believes the debate needs to move on.
“The future demands that HR thinks beyond transactions to encompass
strategy, transparency and flexibility.”
Dr. Anthony Hesketh also detects an evolution in the attitude of HRPs.
“There’s an appetite now among HRPs to be part of the business. And
[they] are coming from more diverse backgrounds — a lot of HR Directors
these days are accountants.”
In contrast, Dr. Max Blumberg believes HR still struggles to get a place at
“the big table”, but argues that people insights, which are grounded in big
data, could allow HRPs to become a regular part of C-suite conversations.
“HRPs need toprovide meaningfulstrategic insightsand ask the rightquestions, so as tounderstand what isgoing on in thebusiness and helpshape futuregrowth.“
Matt Stripe
Big Data in HR 7
Putting a price on people inputs: HRprofessionals and the City
Linked to the discussion about the status of HR, and the role of the HR
professional as a strategic partner, could the adoption of HR analytics
affect a firm’s equity valuation?
While Dr. Anthony Hesketh is not convinced - “The City is driven by KPIs,
not PIs” - he does believe HR is “part of the conversation”. With equity
analysts primarily interested in “optimisation not maximisation”; human
capital is “nestled in the middle of enabling that”, he argued.
Dr. Max Blumberg went further, stating that “the new generation of HRDs
are going to have to walk around the city justifying why the company is
spending money on human capital management”.
Specialist support is crucial
The panel turned to the practical steps HRPs can take to introduce HR
analytics. Assembling and structuring HR data is widely acknowledged as
an issue: research by the CEB3 reveals that fewer than one in five
companies are satisfied with the ability of their current data management
systems.
Trevor Townsend sums up the challenge: “The data is all over the place on
different business systems — and a lot is locked away in people’s heads”.
Matt Stripe advises companies intent on deploying HR big data to not
underestimate the challenge of finding and organising diffuse information.
“Cleansing data to make it useful is hard.” With the relevant data-sets
distributed across different systems it took Matt’s team at Nestlé some
time to organise the data and put it into a useable format.
To make it happen, Nestlé created an analytics team composed of big data
specialists with no HR background. “We ‘protect’ the team from HR people
who want to ‘HR’ them.” By preserving this functional separation the big
data team is free to focus on the numbers and ask the difficult questions.”
Maria Black underlined the importance of creating a functional divide.
Ring-fencing the analytics specialists allows them to focus on the
numbers and “removes the subjective”.
“The new generationof HRDs are going tohave to walk aroundthe city justifyingwhy the company isspending money onhuman capitalmanagement.”
Dr. Max Blumberg
“The data is all overthe place ondifferent businesssystems – and a lotis locked away inpeople’s heads.”
Trevor Townsend
Big Data in HR8
Integration is the Holy Grail
Obstacles to the adoption of big data — within HR and the wider
organisation — is a recurring topic in the big data debate.
Numeracy is a key challenge. A survey for HR Review4 found that 78 per
cent of HRPs do not feel they are very effective at HR analytics (the
interpretation of HR big data). Dr. Max Blumberg agrees that HRPs must
get more comfortable with numbers: “You need to be numerate, to sniff
out the snake oil and understand the correlations”.
Among the panel, there was consensus that the HR profession is rising to
the challenge of data fluency. For example, CIPD training for HRPs now
links big data to strategy, while Matt Stripe has seen signs that new
entrants to HR within Nestlé are more confident dealing with data: “We’re
seeing this ability in new entrants to the company, and that wasn’t there
four years ago.”
The panel was also keen to stress the importance of integrating HR data
with the rest of the business. As Dr. Max Blumberg explained: “Not
everything is HR. Analytics belongs to the organisation as an integrated
whole”. The HR department must therefore make sure it works with other
departments to gain a holistic view of business performance.
There is also an issue of transparency and a need for HR to feel
comfortable making its data available to others in their organisation. Dr.
Anthony Hesketh made the point that the figures may not show what the
HRD would hope and, as a result, collaboration with other areas of the
business is all the more important.
Despite the challenges, the panel agreed that progress is being made,
with Maria Black noting a shift: “At ADP, we are having very different
conversations today with our clients. HR professionals have changed”.
Trevor Townsend added that HR consulting and services providers such as
ADP are now on hand to help HR professionals put big data to work in
their organisations.
“At ADP, we arehaving very differentconversations todaywith our clients. HRprofessionals havechanged”
Maria Black
Big Data in HR 9
The ADP Perspective on HR Big Data
Steve Hardy - VP Global Brand Strategy
In most businesses, there are multiple systems which hold various
employee information, ranging from spreadsheets to bespoke
databases and disparate HR or payroll legacy systems. The
challenge of multiple silos gets more problematic as a business
grows - a recent ADP Research Institute survey found the average
multinational business had more than 22 HR systems — many of
which were deployed over two decades ago. But as ADP has a
holistic integrated view of Human Capital Management, which
includes technology, as well as addressing people and process
aspects of business, we’ve definitely found that alignment of people,
process and technology helps drive a more cohesive culture, all
focused on the needs of our 625,000 clients.
I truly believe Human Capital Management analytics tools will have
a major impact on HR. Analysing big data will allow simple
questions like ‘how many people do we employ?’ to be answered in
an instant, allowing HR to focus on more strategic business issues.
Using big data analytics will enable HR professionals to better
anticipate changes in their organisations and to provide leadership
teams with real strategic insights. Big Data can also support HR
teams in increasing employees’ performance, while the introduction
of analytics may also create new professions within the HR function.
Panellist Biography
Maria Black
Maria is the President of ADP TotalSource and was previously the General
Manager ADP UK and brings a C-suite perspective to the subject of Big
Data. Maria has been with ADP since 1996 and held several roles before
taking on a senior leadership position in Client Services in 2005, where
she led a major launch in California. Maria was promoted to General
Manager of TotalSource's Western Region in 2008 and expanded this role
by combining West and Central regions in 2010 generating revenues of
$150million ($685million across 26 offices in 15 states).
“ADP has a holisticintegrated view ofHuman CapitalManagement, whichincludes technology,as well asaddressing peopleand process aspectsof business.”
Steve Hardy
Big Data in HR10
Human Resources is a key area for Maria who is committed to developing
people and fostering leadership opportunities while sharing talent across
the organization. Maria has a Bachelor’s degree in Political Science and
International Affairs from the University of Colorado-Boulder.
Dr. Max Blumberg
Max is a Research Fellow at Goldsmiths, University of London and founder
of the Blumberg Partnership, a group of corporate psychologists who
develop human capital analytics techniques by linking HR and business
strategies. Some of their clients include the BBC, Rentokil Initial, Barclays
Bank, and Friends Provident. In his academic capacity, Max is responsible
for developing the CIPD’s Human Capital Analytics training programmes.
Max is also a regular contributor to the media, and prior to the Blumberg
Partnership, he worked as a management consultant at Accenture and
founded a technology start-up, before successfully exiting in order to
pursue his PhD.
Dr. Anthony Hesketh
Anthony is the Senior Lecturer/Associate Professor at Lancaster
University Management School where he focuses on the impact of human
capital and strategy on organizational performance. He has written a
number of books about talent and leadership and is the recipient of
numerous prizes for his academic work, including the US Academy of
Management. More recently he contributed to the Hutton Review of Fair
Pay and last year was appointed as an advisor to the Deloitte Analytics
Institute. Anthony is currently leading the Valuing Your Talent research
project for the CIPD, CIMA and UK government, exploring the financial
capitalisation of human resources — so HCM.
Matt Stripe
Matt is the Group Human Resources Director for Nestlé UK & Ireland, and
started his career in the defence industry, designing manufacturing
facilities for missile systems. He then moved to Human Resources and
progressed in a number of roles before joining BAE Systems as Head
of Human Resources and Employee Relations for the Hawk Aircraft.
During that time Matt spent two years working with Dave Ulrich, Wayne
Brockbank and CK Prahalad from the University of Michigan on the future
role of Human Resources.
In 2003 he joined Nestlé and was promoted three years later to the role of
Director of Human Resources for the Nestlé Rowntree Division.
Big Data in HR 11
Matt spent two years in Switzerland as Assistant Vice President Human
Resources before returning to the UK in August 2010 to take up the role of
Group HRD Nestlé UK & Ireland. Matt has a Masters in organisational
design and development and is the Chair of the Centre for Performance
Led HR at Lancaster University.
Trevor Townsend
Trevor is ADP’s Product Director. Having worked in HR software
development for many years, both at ADP and elsewhere, Trevor is
regularly sought and widely quoted in the media on self -service,
outsourcing, flexible working and other issues facing HR and payroll
professionals.
Watch the HR Question Time event
This debate was filmed before a live studio audience at the Hospital Club,
London, on April 2nd 2014 and is available to view at http://bit.ly/bigdataADP
References1 Price Waterhouse Coopers, Capitalizing on the Promise of Big Data, 2013
2 CEB 2013 Global Assessment Trends Report. Alpharetta: CEB.
http://bit.ly/GATR2013
3 HRReview (October 25th, 2013). 78% of HR managers do not feel they are
very effective at workforce analytics. Retrieved March 2, 2014, from
HRReview: http://bit.ly/HRRAnalytics
4 HRReview (October, 2013). Global survey of 1,300 HR, finance and IT
managers, commissioned by SuccessFactors and conducted by the
international research firm, Vanson Bourne.