Why Human Resources and Analytics Make a Great Team

As technology matures and its value starts to bleed into every part of a given organization, evidence is picking up that a data-driven mindset has a lot of value in departments that might have previously been overlooked in technology conversations.

Like the human resources department.

Recently, a study supported by Oracle made the case that HR has quickly leapfrogged into one of the most valuable departments for corporate analytics—moving far faster into the discipline than other departments more traditionally associated with analytics, such as finance. The report  (opens in a new tab) [PDF], titled ‌HR Moves Boldly Into Advanced Analytics With Collaboration From Finance, found that from a maturity standpoint, HR departments tended to be more prescriptive and predictive about what’s happening in their department than even the finance department.

“Today, the trajectory of data and analytics use in HR is among the steepest in any function,” the study explained, “and many HR teams are using data not only to describe what has already happened, but also to predict future outcomes (such as which recruits may be most successful or which employees might be at risk of attrition).”

This is surprising in part because a decade ago, there wasn’t really such an appetite for analytics in the HR field, according to study coauthor Thomas H. Davenport, a Babson College professor and cofounder of the International Institute for Analytics. In a Harvard Business Review piece  (opens in a new tab), Davenport noted that when he worked on a prior study with similar subject matter in 2010, few companies were even talking about HR in analytics terms.

“There was a fair amount of reporting going on but not much prediction. Few HR organizations even had a dedicated analytics person,” Davenport explained. “‘HR analytics’ typically meant a debate about how many employees the organization had or the best way to measure employee engagement.”

This evolution also ties into a growing interest in artificial intelligence in the HR field, including for the purposes of recruiting. But recruiting isn’t the only place where a little data can go a long way. A recent piece from HR Technologist  (opens in a new tab) points out that analytics is increasingly being used to discover the latent talent gaps in an organization, uncover labor inequalities that lead to employees working unnecessary overtime, shift scheduling of workers in real time rather than being forced to plan for it weeks ahead of time, and improve employee engagement.

“HR teams often use HR technology to ensure maximum utilization of resources,” author Chiradeep BasuMallick explains  (opens in a new tab).

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