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Data-Driven HR Is Turning the Corner...and Hitting the Gas

by Dave Hannon

May 10, 2011

By Dave Hannon


There’s a lot of interesting and exciting information emerging about how moving to a more data-driven model is changing companies, industries and business functions. And among the business functions, there are some clear indications that the human resources organization is actually accelerating its use of analytics and business intelligence, for several reasons.

As this insightful Deloitte report points out, for starters most HR organizations have already amassed piles of workforce data—they were collecting data before most of the other organizations in the enterprise through legacy systems for payroll and employee benefits purposes. So the ability to leverage that mass of historical data for forward-looking trends is right there in front of most HR orgs.

“Leading HR operations are moving from filing reports to harnessing the power of workforce analytics to make more effective decisions in hiring, training, assignments, and trend projections,” the Deloitte repot says. “For example, [data-driven statistical] models have been demonstrated to predict the likelihood that a particular employee will leave in the next six months — and can provide likely reasons for the prediction.”

That’s a pretty powerful business case right there, especially given the current IT job market, where employee retention is a growing priority. But that’s just the tip of the human capital analytics iceberg. This article in the Financial Times points out that more HR organizations are looking into their business intelligence solutions, especially in an integrated ERP environment, for clues on how to optimize their workforce.

“The more sophisticated organizations are looking not at workforce planning but at capacity planning, working out what the organization can do, whether with staff, temps, consultants or in partnerships,” says Stephen Brooks of PA Consulting in the Financial Times article.

Even if you’re not using analytics much in your HR organization, the good news for SAP users is you’re already way ahead of the curve in an integrated environment. A great example is the story of Day & Zimmerman, which uses dashboards to track workforce availability. Read the case study here in insiderPROFILES.

If you’re looking for specifics on how you can best leverage your SAP implementation for improved human resources performance, the HR Expert knowledgebase is a great place to look.

Because when you get down to it, the employees are truly what sets a company apart. And “if you want better performance from your top employees—who are perhaps your greatest asset and your largest expense—you’ll do well to favor analytics over your gut instincts,” is how the authors of this report in the Harvard Business Review put it.

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