BackHow talent analytics is becoming key to HR growth
HR is gradually moving away from making gut decisions to more evidence-based decision making. But how effectively is HR leveraging talent analytics for taking informed people-related decisions?
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The digital revolution is redefining the workplace, skills requirement and the employer-employee relationship in a more fundamental way than ever before. Organizations are increasingly recognizing the value of big data and data analysis in predicting and dealing with constant change.
As a function, human resources (HR) too is gradually moving away from making gut decisions to more evidence-based decision making. But how effectively is HR leveraging talent analytics for taking informed people-related decisions?
Willis Towers Watson (WTW), a global advisory, broking and solutions company has released a study on the ‘State of Talent Analytics in India’’ that assesses the overall maturity of talent analytics, examines various approaches and compares them against best practices. The report also looks at the state of workforce planning in India.
Talent analytics is a science, which focuses on the current/historical state of the workforce in the organization. It is a cross-sectional representation of how many people work for you, who are your best performers, which departments are functioning most effectively and leverage this current/historical state of workforce to address deeper HR issues taking a predictive view on issues like predicting and controlling attrition, (and) predicting good quality hires in the organization, thus improving effectiveness in recruitment.
On the other hand, workforce planning (WFP) looks at the current and the future headcount requirements in terms of both capacity and capability, required to meet an organization’s current and future business plans. Workforce plans look at external and internal factors influencing the need for the number of people and the skill set required by the organization into the future. “Workforce planning is about thinking about the future—about automation and AI and how you can be ready so that you have planned your headcount for the future," says Sambhav Rakyan, Willis Towers Watson Data Services Practice Leader.
According to the WTW report, 11% of the organizations (among the companies surveyed) are satisfied with the level of talent analytics in their organizations while 74% are still at a nascent stage. “Companies have been leveraging customer data to increase their top line and bottom line but people analytics is the new kid on the block. Organizations that have been able to leverage people data have been able to tangibly add value to their stakeholders, their employees and management, and this is the one single thing that gets the chief human resources officer (CHRO) a seat in the boardroom where he can factually present findings on the people and talk about how he can improve performance by improving people quality," says Neeraj Tandon, director, Workforce, Analytics and Planning, WTW.
Another key finding is that only 8% of the respondents say they’re using predictive/prescriptive analytics, while a huge majority (82%) of companies are still stuck with using traditional reporting methods like dashboards or spreadsheets for HR analytics.
“We see a lot of analytics today is very dashboard-based but if companies start using predictive analytics, then they will be able to use the data from an employee’s perspective and be able to make targeted interventions to an individual, rather than a group which is currently happening," says Rakyan.
But the good news is that 70% of the organizations surveyed said “predictive analytics" is their key area of interest, while 65% of the organizations find “self-service reporting" as another area of key interest.
In terms of adoption rate, talent analytics has a higher comparative adoption among CHROs, but the true value of HR analytics can only be realized with increased usage among CEOs (chief executive officers) and COOs (chief operating officers). According to the study, 58% of the CEOs with the surveyed organizations actively use HR data analytics for their decision making. Adoption remains low among COOs (31.58%) and business analytics heads (13.16%). Not surprisingly, the usage of HR analytics is highest with CHROs (84.21%) and HR business partner (HRBPs) (79%). Only 14% of the organizations have a dedicated HR analytics center of excellence that is integrated with business functions.
However, the study claims that the focus and investments around talent analytics is set to increase in India. Eighty-seven percent of companies will increase investments or maintain their investments in talent analytics. Additionally, organizations plan a series of measures to improve the effectiveness of HR analytics within their organizations. Two key focus areas of investments for organizations in talent analytics will be technology (71%) and people/competence (68%).
According to the report, only 24% of the organizations are satisfied with the current level of WFP in their organization. While 53% of the organizations do resource, headcount and strategic planning, they do not have a strategic view of their workforce plans as they tend to focus on the short term. Tandon says that 74% of the organizations have less than a 12-month view of the workforce plans, 17% organizations have a 2-3 years’ view of the workforce plans and only 11% organizations have a 3-5 years view of their workforce plans."
Similar to talent analytics, 86% of the surveyed organizations still use spreadsheets to do workforce planning while only 20% organizations use dedicated WFP solutions to conduct this activity. Most organizations (35%) review their workforce plans on an annual basis, 25% organizations review their plans on a quarterly basis and only 20% organizations review their workforce plans on a monthly basis. Only 16% of the organizations are leveraging the outputs from the workforce plans to allocate actions to the talent acquisition or the learning and development. While the need for estimating the future workforce requirements is the key driver within organizations to do workforce planning (83%), rising cost of workforce and workforce optimization is high among the key drivers for doing workforce planning in organizations (64%).
In 76% of the organizations, the workforce planning process is led by HR but is typically sponsored by the CEO/COO of the organization (46%) and the key governance decisions on workforce plans are taken by an executive team comprising of the CEO and COO. In almost 45% of the organizations, workforce planning is viewed as an integral part of the business planning process. However, in almost 52% of the organization, it is viewed as an important HR project or a key initiative.
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