Blogging for WIRED Innovation Insights: Rethinking HR Analytics

July 11, 2013 Wes Wu

HR transformations have abounded in the last decade as HR organizations continue to attempt a grab for “the seat at the table.” Largely HR has been unsuccessful. In a world run by numbers, balance sheets, and productivity, HR’s attempt at transforming things like “talent management” and creating efficiencies through “self service” and “HR outsourcing” have not resonated with management from the business or other corporate functions. HR constantly screams the mantras, “People are our most important asset” and “Human capital is our most expensive asset.” The irony is lost only to HR that nobody can actually analyze how much incremental productivity is gained per dollar of human capital versus other assets, or that HR can’t even quantify with any degree of precision how much an employee costs when everything is factored in. Given that HR is trying to get that “seat at the table” with managers and executives who have gotten used to highly precise, quantitative information from Finance, success lies in providing the same.

What HR Does Wrong

Much of the problem is that HR does not even know that it’s not providing analytical insight. They think that providing a turnover report that trends the last 5 years, or giving a manager a headcount breakdown by age, gender and tenure is good enough. The assessment about this is easy enough to make: nobody cares! At the end of the day, the fact that your turnover went up 3 ticks LAST quarter is meaningless. It’s not an insight if the manager already knows it (it’s their employee population after all), and HR still can’t tell the manager what to do about it, or why it happened. In fact, HR can’t even tell the manager if the turnover was good or bad, it makes the assumption that all turnover must be bad when in fact there are people everyone wishes would leave the organization, or there is business reason to make it happen.

You can read Wes’ post in its entirety on the WIRED Innovations Insights Blog.

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