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Gaps in Both Will and Skill Explain HR’s Struggles with Analytics

By Evan Sinar, Ph.D. and Rich Wellins, Ph.D.

Evan Sinar, Ph.D.

By now, the criticality of analytics for HR is widely recognized – as a key enabler for speaking the language of business and for gaining strategic influence. Few are still arguing against it as a top-ranked HR imperative. Yet as we discussed in an earlier article, progress is glacially slow, even among the largest corporations pouring massive investments into people analytics. This is perhaps not surprising, since HR is trying to remake itself in an entirely new image, in an environment where supply of new analytical talent—and budget to hire them—are extremely limited. This context and sense of urgency puts a premium on moving past the stage of knowing analytics is a vital HR capability, to the actionable phase of doing something about it.

To get to that next step, what’s needed is a deep diagnosis of HR’s specific analytics-related skills and personality traits. That is, how do HR capabilities match up against those needed for analytics success, and how does HR’s profile compare to other business functions who ARE excelling at analytics? With this information in hand, organizations can target their long-term talent planning efforts accordingly. HR’s core strengths are in diagnosing and developing performance—it’s time to turn that same focus on itself. In this article, we discuss what we’ve found through our research gathering extensive skill and personality data, how HR leaders can use this information to accelerate their pace of analytics adoption, and who they should partner with along the way.

What skills and traits does HR need to thrive with analytics?

Through our assessment practice, we’ve gathered detailed data from thousands of operational through strategic-level leaders, including hundreds from the HR function. These data come from immersive “day in the life” simulations of leader behavior. Leaders can’t succeed in these simulations by just saying what they can do, or even what they have done. Instead, they need to actually SHOW what they can do by demonstrating their skills in realistic scenarios, which include analysis and presentation of complex business information. Alongside the skills assessment, we also gather data about leaders’ enabling or derailing personality traits. By integrating these data, we’re able to compare HR leaders against the analytics challenges they’ll be facing, and to their peers from other functions.

How HR leaders are most prepared for analytics success…

Through our research, we found two types of skills and traits—first, those where HR leaders excel (the left side of the graphic below).

  • HR is far beyond its peers in championing strategic talent planning and seeing gaps between talent now and needed—while HR’s passion and acumen for these topics are not a surprise (it would have been deeply troubling otherwise). In the context of analytics, it speaks to HR’s awareness of the long-term value of strategy-talent integration, and of data to spot talent gaps.
  • HR is also strong at creating a learning culture—with the rise of analytics, data is now seen as a critical source of information to learn from.
  • HR excels in evaluating employee skill gaps—a necessary first step to closing these gaps between what employees have and what they need.
  • HR’s strengths in removing change barriers and resistance will be critical in converting analytical outputs to business actions, a transition which often requires major change management for organizations built on intuitive, gut-based decision-making.
  • HR leaders are adept at creating a shared team purpose and viewing risks as learning opportunities—as a new and challenging pursuit, HR’s further adoption of analytics will require coordinated action within the group and a spirit of experimentation.
  • HR leaders are stronger than functional peers in the personality trait of attention-seeking. HR will want to draw attention to its analytical proficiency and “early win” successes, so they’ll have plenty of opportunities to seek visibility for this work.

HRAnalyticsGraphic

…and how they’re least prepared

Turning to the negative portion of the analytics profile for HR leaders (the right side of the graphic above):

  • HR is weak in analyzing business and financial data—though HR has a strong measurement tradition, these analyses are often focused on metrics with little meaning outside the HR function, leading to skill gaps for analysis of business and financial data.
  • HR leaders lack understanding of financial strategies and systems and isolating business levers to focus decisions—these know-how gaps lead to a lack of confidence extending analyses into the broader business context, and of credibility to create models that connect talent metrics to financial outcomes.
  • HR is less adept than its peers at two forms of communication - communicating in business terms and using storytelling and visualization in its messaging. This links to the surging trend of using storytelling techniques and data visualization in business environments. These skills will be essential in exploring, explaining and most importantly, engaging an audience in the outcomes of an analytics project.
  • HR leaders are less likely than others to exhibit the personality traits of inquisitiveness and curiosity and attention to detail. Lower inquisitiveness will be a limiter to analytics success if as a result, HR fails to use a business question-centric approach in formulating analytics projects. Gaps in attention to detail will hinder HR’s ability to ensure that all the right—and none of the wrong—information is being gathered about employees. This will require HR to adopt a tighter connection to the mechanisms and technology tools (for example, Internet of Things devices) used to collect people data.
  • Finally, HR leaders are less inclined to take a forceful approach to positioning new ideas and initiatives—though on its own this may not cripple HR’s chances for analytics success, when paired with the other tendencies above, it can create a missed opportunity for HR’s data to proactively and aggressively attain the visibility it warrants for the valuable talent information it owns.

It’s important to note that these gaps are about more than just analysis, it’s also about business context for the recommendations stemming from an HR analytics project. Improved awareness and skills here will help ensure that HR analytics produce well-aligned—and more likely to stick—actions that extend beyond the HR function, to impact and shape the broader business. The close link between talent and strategic planning, which we’ve found to be a hallmark of high-performing organizations, shows the advantages to applying a business lens to people analytics.

Which partnerships will propel HR fastest?

HR leaders can reach a higher state of analytics readiness on its own—but they don’t have to. Plenty of opportunities exist to partner with and learn from peers in other functions. But who’s best to turn to for this? The graphic below is drawn from our assessment database and shows the organizational functions strongest, weakest, and mid-range in the 10 leadership skills varying most across functions. Several of these skills have direct relevance for analytics as noted above (and importantly, this information-sharing goes both ways, with other functions likely to learn from HR in several areas, most notably building organizational talent).

HR Analytics Graphic - Leader Skills

Based on these data, two functions stand out as the most promising HR partners. First, our data clearly support the need for a stronger HR-Finance partnership—Finance is the strongest of all functions in business savvy and financial acumen. Armed with improved skills here, HR will produce more credible analytics—taking into account the right control and interpretation factors when interpreting the connection between talent practices and financial outcomes.

We’re also seeing that Marketing is mastering many of the skills that HR lacks. Not only is Marketing second only to Finance in business savvy and financial acumen, it’s even stronger in compelling communication; that is, crafting, designing, and visualizing messages for maximum impact. Without a doubt, TELLING a story is a necessary skill for HR—by partnering with Marketing and other communicating-savvy internal partners, HR can gain skills in SELLING the story also. Though on the whole, the CHRO-CFO partnership is likely the more important one for HR’s increased analytical success, we’d argue that the CHRO-CMO partnership (and corresponding ones between leaders at other levels) isn’t far behind. HR’s improved analysis skills will get the function farther down the path toward strategic influence, but blending high-caliber analysis with compelling business communication will get them much further.

The skills and traits paving the path to an analytically-savvy HR

Though the need for stronger analytics adoption is prominent on many lists of HR strategic objectives, this awareness needs to be paired with know-how of what to target, what to draw on, and who to work with to get there. This research integrates high-precision, robust assessment data, spanning both skills and personality, to pinpoint specific behaviors where HR has strengths to leverage, where they have deficiencies to address, and who are the most promising partners for them as they pursue their goals of stronger analytical acumen and influence. This evidence-based information will aid HR in focusing its energy on what’s most likely to produce a payoff, which in turn will reverse the too-common trend of low-return investments in people analytics.

Evan Sinar, Ph.D. is DDI’s Chief Scientist and director of DDI’s Center for Analytics and Behavioral Research (CABER). Evan is a thought leader on talent management analytics and data visualization.

Rich Wellins, Ph.D., is senior vice president at DDI and coauthor of Your First Leadership Job: How Catalyst Leaders Bring Out the Best in Others. He is passionate about helping organizations employ alignment and analytics to realize the potential of their leadership capability.

 
Posted: 29 Jul, 2016,
Posted: 29 Jul, 2016,

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