Big Data and HR: pt II – Opportunities & Risks

I’ve been discussing Big Data and HR with the CEO of OrganizationView’s technology and analytics partner Jacqui Taylor. In the first part of this discussion we discussed Big Data and how HR needs to adopt a philosophical shift from thinking about what value can come from HR data to what value can be derived from employee data. We discussed how analysis of employee data can be used for understanding cultural issues within a firm, identifying them before they become critical. If you haven’t read it it’s worth starting there.

In this second part we look at the opportunities and risks for HR. We think we’re at the beginning of a hugely disruptive transformation and that it will happen whether HR get involved or not. How well it succeeds depends on HR’s contribution.

[Andrew] So this links to my view, where you see your employees as you do your customers. You don’t own them, but by understanding them through their data you can design approaches that are more appealing to them, and how much you invest in those approaches depends on their projected employee lifetime value.

[Jacqui] Yes, absolutely, but it’s more than that as your employees will help define your organization’s social profile. If you can engage and enthuse your employees they will reflect this out to your customers. If you look the metrics involved here you’ll see about a 1 to 10 projection. If you can do this well you’ll make a big difference to your social profile and your brand/company engagement with your customers and social influencers.

From a web science perspective we’re moving from a relevance world to a resonance world. This requires a whole new philosophy.

From an HR perspective the only way of doing this is through the use of technology, leveraging the technology to provide insight and harnessing the HR specialists to maximize value from it. Before we had the technology it didn’t matter if we understood it, we couldn’t do anything about it. This fundamental shift is what brings HR specialists to the fore right now.

You’re painting a picture I think many HR people will find scary. They’ve been happy with limiting their remit to what was in their HR system or their talent system. What we’re saying is that this is a tiny part of the important information. Most HR people haven’t got any way of dealing with this. Will HR own this, and if not who will?

The early adopters of this have always historically been the sales and marketing functions, but the issue when we move from a relevance world to a resonance world where there is all this extra data to consider is that sales, marketing, business development people don’t understand employees. It will be interesting to see how it pans out.

I’ve been talking to one company today about this. The message was very much ‘it doesn’t matter if you do it, but if your competitors do it before you, you’re in trouble because they can command the engagement, command the market share and build it out. ‘
Someone who can understand the HR piece, this employee piece, will get to be an important part of the key business decisions.

It’s a big shift but its a huge opportunity. If you want to do it well you need the employee perspective and there is really only HR which can bring this.

The question will be to how prepared are HR to bring this perspective to the business and help the analytic insight be realized.

So for a function which probably has a shortage highly numerate folk the opportunity is to align yourself with those who can deal with this data and to bring your insight, the cultural understanding and how to action it?

It’s the action bit. Possibly other people will get the insight, but they’ll do the wrong thing with it. An HR professional understands this at a fundamental level in the way that nobody else does. I would be concerned if HR stands back then it is how it develops. Without them the business will take action, but they’ll do the wrong thing and HR will have extra burden to deal with something which shouldn’t have happened. The cultural, the personal and the performance management bit is what HR can bring.

I don’t think HR will drive it as the front end are those who meet the customers and are the key. There’s a real synergy between what the market and the customers need and how that relates to the employees. This is where the value from data is driven.
What I expect to happen is that a couple of key innovators / early adopters in the HR profession will drive this value. This is what we have seen happen for other fundamental changes.

We also need to move HR thinking from one-size-fits-all to understanding to micro-cultures in the firm, in just the same way that customers are segmented.

Yes, that is correct, and quickly. When the majority of the workforce is from Gen Y this will be expected, if this is not what they find it won’t be forgiven. If this persists they’ll leave. They demand to be individuals This brings its own challenges.

Of course the data that we’re talking about is the basis of how you understand what they want and how to deliver it.

So we’re saying it’s a mass-customization approach to HR?

It is really. There are things you can build out on with the things we’ve discussed. It’s a real transformation in the way we look at this from a HR perspective.

I do think HR will be the new cool.

It’s the development of the web and the Gen Y change which will be the big drivers to the customization.

I do think that those who grasp this will drive huge innovation and it will ultimately lead the industry to a new place.

The future points towards talent and employee management being done this way, data-driven, using the web and I hope with an HR professional at the helm.