Leadership Matters

Perspectives on the key issues impacting senior leaders and their organizations
November 20, 2017

Five Ways Human Resources Can Maximize the Data and Analytics Opportunity

A better understanding of what engages employees. More efficient talent management processes. Greater insight into whether a candidate will be successful in a new role. These are just some of the possibilities that data and analytics bring to the human resources (HR) function. We recently discussed the promise — and potential pitfalls — of the growing role of data in the human resources function with Ross Pollack, executive vice president and chief human resources officer of Lionsgate, Jim O’Gorman, senior vice president of talent and organization at Hulu, and Rick Merritt, senior vice president and chief human resources officer of OSI Systems. Here are our top five takeaways from the conversation.

1. Success requires a data-ready culture.

Many organizations, even those that are further along in their digital journeys, still have a ways to go to fully integrate more sophisticated data analysis into decision-making and also implement the “holy grail” of predictive analytics. The good news is that there are a number of tools that can help organizations get there. However, making the significant leap from relying on built-in practices and assumptions to deploying more data-driven analysis will require that organizational cultures support such a transition. For example, if new data shows that long-held perceptions are false, is the organization open and flexible enough to change? Fortunately, Hulu was. “Our biggest win with data has been in talent acquisition,” said O’Gorman. “Through data we were able to challenge long-held recruitment paradigms for sources of high-performing tech talent. We used data to illustrate that certain pedigreed universities we had historically been hiring from were not consistently delivering the right type of employee for us. The data helped us determine the right universities to partner with.”

2. To adopt data-driven decision-making, effective HR teams will need to change how they think about recruiting inside the function.

Embracing the full power of data and analytics often requires organizations to shift their perceptions of what the ideal HR professional looks like. For instance, the function will benefit from hiring leaders who bring a breadth of experience beyond HR, and can borrow from training found in other functions. Applying this theory as part of its own transformation mission, Hulu has brought on analysts with backgrounds in finance, technology and data into its HR organization to help institute data-driven decision-making and created a curriculum enabling the team to approach key decisions in new ways.

3. Be relentless when evangelizing the power of data with the broader business.

The rigor of data and analytics can help HR — and the entire business — run more efficiently and make better decisions, but it might take some convincing to get everyone on board. “When I joined the organization, HR was largely a personnel office,” said Merritt. “A headcount request turned into a research project that was only 60 percent accurate. We had poor data that was not well-maintained, and our HR system did not extend outside of North America.” After building connections between applications and a global HR system, OSI was able to create a transparent dashboard to go paperless, facilitate talent acquisition and double its talent acquisition output. Merritt’s next task was to help other business leaders become more comfortable using data to make talent decisions, which was met with resistance by some despite the HR team’s early wins.

Merritt’s advice? Be relentless. “From an HR perspective, too often we wait and ask, ‘Please give us something,’” he said, “But instead, I led with, ‘Here's what we’re going to do,’ and I was persistent about it. You still have to present good business analytics. You still have to justify the reasons you do it, but you have to be relentless with other teams, and I think that's how we've been able to make progress in an organization with very established ways of doing things.”

4. Use data to win the war for talent.

Data helped Lionsgate move away from annual performance reviews to quarterly conversations with employees — ultimately improving employee engagement and retention. “HR business partners work with business units to ensure these conversations happen,” said Pollack. “When they don’t, the data shows that there is higher turnover and lower engagement scores. When they do, these statistics improve.”

5. Beware the dark side of data.

Pollack warned that one of the biggest concerns HR executives should have is making sure data doesn’t reinforce biases: “If a company has been successful to date and its executive team is composed of middle-aged white men, the data will show that the company should continue to hire this group of people.” He advised that HR leaders partner with HR information systems as well as diversity/inclusion and talent acquisition teams to review the data and ensure the right questions are being asked in order to create paths for diverse individuals to rise through the ranks.

What’s next?

Data and analytics will continue to reshape the HR function for the foreseeable future. HR leaders will need to help tell the story of what the data means for the talent agenda, while applying sound judgment to make the best strategic talent decisions. In an increasingly digital world, HR leaders have the opportunity to serve as advisers and connect the dots on digital, data, organizational culture, talent management and employee engagement.

Jennifer Heenan is a member of the firm’s Healthcare Practice and based in Spencer Stuart’s Los Angeles office. Reach her via email and follow her on LinkedIn

Kimberly Fullerton is an attorney and a member of Spencer Stuart’s Legal, Compliance & Regulatory and Human Resources practices. She has more than 19 years of executive search experience and is based in Spencer Stuart's San Francisco office. Reach her via email and follow her on LinkedIn.

Tyler Schuessler is a member of the firm’s Human Resources Practice and is based in Stamford. She has more than 15 years of leadership experience in organizational development, investor relations, strategic planning and communications. Reach her via email and follow her on LinkedIn.