HR Should Hire “Scary” Data People
Too many people confuse reporting with analytics–and underinvest in making sure they are asking the right questions.
Standard-issue reports about monthly employee turnover rates and average compensation per employee are important glances in the rearview mirror. But today’s savviest chief human resources officers (CHROs) do not spend time obsessing over such reports.
Instead, they are looking for ways to go beyond analyzing the data they expect. They seek real insight. They want to know what they don’t know. They want to discover those elusive flashes that management can use to hone the organization’s competitive edge. They want to create value for customers and shareholders alike.
As highlighted in the Economist Intelligence Unit report entitled “In search of insight and foresight: Getting more out of big data,” predictive analytics were most valued by the 373 global executives surveyed. The main drivers for ROI on analytics investments were found to be the quality of the questions being asked and the availability of talent to look for the right business challenges to solve. The availability of effective technology, potentially useful data, and endlessly curious data scientists asking the right questions are the three legs of the stool.
Going beyond the expected is essential to the practice of analytics and is the fundamental difference between true analytics and reporting. And to achieve this end in HR, you need to hire a scary person.
Known as data scientists or quants, these whizzes can be scary to more-traditional CHROs and HR leadership teams, because they don’t think or speak in traditional HR terms. Nevertheless, their innate curiosity, business knowledge, and supreme skills in finding insights or “signal” in data make them masters of uncovering new strategies for reaching core business goals. In short, they’re the ones asking and answering the question behind the question behind the question.
Here’s a hypothetical. An HR quant may probe the depths of data about what attracts high-performing sales talent in a particular industry and, conversely, what causes these overachievers to leave a company. Using predictive models, this data scientist may identify areas in which an investment of $500,000 could cultivate new talent capable of increasing revenues by $10 million in the coming year. When you start initiating discussions like this, don’t be surprised if the CFO says to you and your quant, “You’d better be able to back this up—but in the meantime, let’s hear what you have to say.”
Some HR applications today provide excellent and easy-to-use functionality that can predict turnover and performance and even model different scenarios to gauge the impact of different actions on predicted outcomes. This functionality can be deployed on mobile devices, requires no training, and delivers unprecedented decision support to front-line leaders, but it should be viewed as just the start.
With the right data wizard and a reliable foundation of human-generated information, CHROs will be on solid ground and well on the way to turning the HR department into a strategic business asset. The critical distinction is that the scope of inquiry should not be limited to traditional HR systems and data. More value can be created when other sources of human-generated data—including location data, activity data, sensor data, financial data, unstructured sentiment analysis, and many more—are in the mix. Although many of these pose potential HR compliance questions, they are too valuable to dismiss and should be considered possible sources of insight.
The Perfect Quant
What makes quants so scary? They exhibit a freakish combination of traits that are rare in any single person. They have a deep and innate curiosity about data, probabilities, and mathematical modeling. They’re also fired by a passion for business. Even more surprising perhaps, they welcome the opportunity to collaborate with HR leaders to develop and answer the questions that will help the business grow.
Data scientists aren’t necessarily the people CHROs already employ to create standard monthly reports. Data scientists perform vastly different roles. They are much more focused on asking “how” and “why” questions than on carrying out typical reporting functions. The same people who provide reporting on core processes and talent reviews may not be the ones who can identify the specific actions needed to elevate the quality of talent in an organization.
So where do you find these endlessly curious, business-focused data geniuses? If you track some HR quants’ careers, you’ll likely find résumés that weave in and out of various business functions. These people may have spent time in finance, developing analytical skills. Then they may have moved to product development and gained a deep understanding of target customers. The latest stop is quite likely the marketing department (take a look at my last post for more on that), because CMOs have hungered in recent years for the right mix of data and analysis to enhance the customer experience and predict and influence human behavior. Who better to satisfy that appetite than a quant?
Time to Transform
With the help of a handful of quants, CHROs can continue to evolve their roles to meet today’s new realities. My Oracle ORCL -0.34% colleague Bob Evans sees a similar transformation occurring among CIOs. “CIOs have never had such a glorious—and challenging—opportunity to deliver significant, enduring, and transformational business impact and customer value as they do today,” he writes. But he also warns that IT leaders who measure their success by server uptime and service-level agreement (SLA) enforcement “should consider swapping out the CIO title for a new one: senior director of infrastructure.”
The same is true for CHROs. If they don’t find a quant to help HR ask the question behind the question behind the question, they also may soon be changing the title on their business cards. And that’s a prediction that can probably be made today without the services of a data scientist.