Data deluge weighs down HR’s ability to measure talent

All the buzz about big data is leading to big headaches for human resources departments.

Globally, HR is inundated by the amount of data about employees, and HR professionals are not sure how to use the information for business gains.

The data deluge is highlighted in SHL’s annual Global Assessment Trends Report, which surveyed nearly 600 HR professionals in countries such as the US, UK, China and South Africa. SHL, which supplies talent measurement solutions to businesses, is owned by The Corporate Executive Board.

Companies see the importance of collecting the data, but after that, they’re not sure what to do with it. Less than one in five respondents (18%) reported being satisfied with their systems’ ability to manage talent data.

While HR’s 2013 priorities remained relatively similar to those in the 2012 survey, a press release accompanying the report said the priorities “reflect the contention between balancing short-term employee productivity and performance with longer-term strategy of aligning talent to the needs and vision of the business.” Just 24% agreed with the statement that their companies had a clear understanding of their workforce’s potential for additional responsibilities or management roles.

“Our research shows that even though organisations measure employee performance, they have historically focused on efficiency data, like how well an employee is performing versus data that allows them to make a strategic talent decision,” Ken Lahti, SHL’s vice president of product development and innovation, said in the press release. “This means key information on talent potential and future capability is overlooked, effectively making targeted programmes that identify the next generation of leaders and nurture talent for critical roles ineffective. This increases succession risk for organisations, putting business performance and continuity in jeopardy."

The report showed that companies are less focused in 2013 on developing talent internally than on hiring externally. Also, 73% say recruiting and hiring talent is a concern in the coming year, compared with 64% who thought that in the previous survey.

The report focused on the data crunch for both existing employees and potential hires. On the recruiting front, social media is being used more as a strategy to vet candidates. Nearly half (48%) of respondents said they allowed recruiters or hiring managers to review social media information about potential candidates. That practice carries over to an online peek into the photos someone posts online, especially in emerging markets. However, just 29% of respondents, the same as the previous year, said using social media information to determine a candidate’s fit with the company was useful.

The report makes recommendations for companies in four topics:

1. Big data presents HR with a unique opportunity to demonstrate value: A company should review the type of data it has about employees and candidates. It should then link the data to relevant business outcomes to better measure effectiveness.
2. Only the right data will lead to the success of talent initiatives: Not all data is useful. Companies should prioritise what they collect to make sure it objectively measures performance and to make sure HR is not buried by numbers.
3. Embrace innovation that improves how talent is recruited, but with caution: Very few companies have formal policies on the use of social media in recruiting. Organisations should specify which information is fair game in evaluating candidates.
4. Consider mobile technology for competitive advantage, not to follow the crowd: Very few companies have a mobile platform for talent management. Companies should consider the appropriateness, security and potential value of a mobile tool for candidates.

The SHL research cited a CGMA report from September 2012 that said that 43% of chief executives, CFOs and HR directors believed poor human capital management had kept their companies from reaching key financial targets in the previous 18 months. The CGMA report also said that 40% of respondents believed subpar talent management hindered their companies’ ability to innovate.

The CGMA report, Talent Pipeline Draining Growth: Connecting Human Capital to the Growth Agenda, detailed the disconnect about human capital strategy. Most senior business leaders disagreed on the key aspects of talent management as well as disagreeing on which department should take responsibility for managing talent.

Related CGMA Magazine content:

“Employers Can’t Afford to Let Worker Retention Practices Lapse”: Four in five employees in a recent survey indicate they plan to remain with their current employers, but statistics show that when unemployment decreases, voluntary job turnover increases. Many organisations have been reporting trouble finding skilled workers, so employers who neglect retention practices do so at their own risk.

“How HR Leadership Can Drive Business Performance”: Maximising operational efficiency alone is not enough to keep up with quickly changing global business trends. Successful companies also managed to transform their workforces. Those companies have eight traits in common, PwC and HfS Research found.

—Neil Amato (namato@aicpa.org) is a CGMA Magazine senior editor.