THE NEXT WAVE – PREDICTIVE PEOPLE ANALYTICS the game changer for HCM 4.0

 

INDUSTRY 4.0 IN A  FAST CHANGING WORLD NEEDS TO ANSWER THE IMPOSSIBLE QUESTION “WHAT’S NEXT..?” WHAT DOES THIS MEAN FOR MANAGEMENT-BY-MEASUREMENT

C-Suite executives  need to be  forward-looking, anticipate  upcoming problems so that they can mitigate or prevent them.  That’s where predictive analytics  comes in as the next level of management-by-measurement. This comes about in an age where “big data” generated every moment ; which creates a problem of information  overload. The problem is both  the quantum  of  data that is being generated (from financial data to  endless world of social media feeds) and  the  speed  at which it  moves around the world. Whilst at the first stages HCM has problems of information scarcity the problem today is to funnel data down the critical few for better management.

 

HOW DOES PREDICTIVE ANALYTICS  HELP THE HCM LEADER DEAL WITH DATA AND DECISION MAKING?

Analytics is converting raw data  into commercially relevant insights (analytics) to provide strategic insight improve  performance  and  guide strategy (business intelligence) . Its value is how  information feeds management decision making . Predictive Analytics help you find information which  is current which you didn’t know; or  is  buried in history. It uses descriptive techniques and predictive models to gain valuable knowledge from data through analytics. So predictive Analytics create new information…with past data insights about the future can be drawn.

 

  HCM 4.0 at the vortex of the data revolution can proactively  address critical people management issues; inspire breakthrough thinking which in turn  lead to radical improvement initiatives. HCM  can use make “big data” enable  the discovery, interpretation, and communication of meaningful inputs for decision making  forecasting and pre-emptive action.

HCM 4.O needs a big springboard of data to live up to the business agenda mandated; it prescribes more than just assessing the results and impact of HCM but predicting the future outcomes. Not at looking at what went wrong yesterday (post mortem) but instead visioning what’s likely to happen in the immediate future. This needs data with analysis; it focuses on not just why it happened but  what will happen in the future.

People Analytics will aid HCM professionals  to put  long reports in a ready to use design and format. This helps to develop quick insight for decision making and action. People Analytics can be valuable in applying data patterns towards effective decision making; and  predict the impact of policy changes based on the data they’ve collected. Example: the R & D department is forewarned about  the scarce skills for key posts  in the talent market to develop them in-house as a buffer against uncontrollable attrition.  Here HCM plays a value added role of guiding line managers with their upcoming challenges.

PREDICTIVE PEOPLE ANALYTICS (ALSO KNOWN AS HCM ANALYTICS  OR WORKFORCE ANALYTICS)  OPENS  A NEW WORLD. WHAT POSSIBILITIES OPEN UP?

 It  is using behavioral data to understand how people work and change how companies are managed. A company, for example, may use analytics to find similarities between employees who chose to leave the company, creating an opportunity to plan strategically and fix the issues for current and future recruitments. In other words, this helps identify patterns and behaviors that may otherwise stay outside HCM’s radar

 HCM 4.0 can  apply analytics to business data to recognize  describe, predict, and prescribe improvement for  business performance. People Analytics can add  a visual trend line (graph line) to each strategic metrics/KPI, to show the historical direction, the current direction and the degree that the metric will likely shift up or down in the future People  analytics will look beyond the numbers to extract crucial information; it thus narrows  the route from raw data to predictions; and  enhances the value of  all metrics/KPIs  with  a forward-looking predictive component; for example - Human related trends can be foreseen to discern which employees to hire, which to reward or promote, what responsibilities to assign

 

People Analytics further includes risk analysis with your forward-looking metrics/KPI, so that decision-makers can understand both the probability of the problem occurring and the likely costs that will result if the upcoming talent problem is not promptly addressed. In the hyper speed of business; this would be a big boon to decision makers who don’t get enough warning so that upcoming problems can be mitigated. This would pre-empt the rising costs in case of delays caused by late diagnosis of a problem or losing potential business opportunity.

 

People Analytics  must now track the effectiveness of HR metrics on HR and business outcomes. Measuring the impact of HR on bottom-line performance will make HCM 4.0 become more financially adroit and more business centric. For the first time words like  lean HCM were used to indicate the accountability of budgets and the ROI justification as part of managerial responsibility. This  is  the end objective of People analytics

 

A QUESTION OFTEN ASKED IS DOES  HR ANALYTICS AND KPIS / METRICS CLASH?

No HR metrics and analytics may be considered two sides of the same coin- Management- by- Measurement. As they  are complementary  tools to create a powerhouse of information and feedback for the company- ultimately saving them time and money. HR metrics however provides the input for HR analytics, and together they pave a road towards potential solutions when HR analytics utilizes the concrete data that HR metrics provide.

 

 

WHICH SPECIFIC AREAS COULD PREDICTIVE PEOPLE ANALYTICS BE PUT   TO USE?

HCM 4.0  can draw a parallel from  marketing analytics which have  revolutionized the field of marketing. Key HCM  areas will drastically change based on the insights gained from HR analytics; which can be used  to recommend action or to guide decision making rooted in the business context.  HCM professionals can  now leverage data to understand every part of a business operation, and analytical tools are being embedded into day-to-day decision making.

People analytics  helps to address the most common questions we hear from HCM practitioners :

1.     How does learning & development investment impact sales performance for my account managers?

2.     Will accurate tracking of career paths of hi-potentials in critical jobs  help us retain key employees and thus leverage your core competency inventory ?

3.     Will HCM take proactive action  in hiring & selection procedures and decisions to bring better caliber talent into the company which spurs innovation?

4.     Can we determine the channels to acquire the required talent internally and externally?.

5.     How does a growth oriented division predict the talent inventory needed for tomorrow’s growth plans (either in greenfield ventures or due to  expansion of the company’s market share).

6.     How can we best improve customer satisfaction through smarter people processes?

7.     Can we use the talent pipeline to build a future batch of leaders?

8.     How can we measure the value of what we do in HCM in terms that line and general managers will understand and respect?  For example, how can we determine the return on invest (ROI) of a new initiative like training or succession planning or  (WFH) work from home?

9.     How can HCM  reports be incorporated in my organization’s annual reports to  measure business performance?

10.  How can hard data win credibility for HCM which lead line managers to give  a  higher priority to HCM issues?

11.   will the CEO/ CFO be will to part with more funds for the budget  as the ROI of the people management function has evidence ?

ROUNDING UP

HCM  can now address these issues and make better decisions to  predict the future of the workforce. The way forward is for HCM professionals to get proficient very speedily with People Analytics (To really stride ahead the HR head must ask the  overarching question “…What can we learn from our HR data to make better people decisions in the (near) future?...” HR analytics when it becomes a strategic tool in analyzing and forecasting will help HCM function to rise to become a strategic partner... because  HCM now has  the numbers to back up what they are saying!!!  Analytics is not to be considered as a new-fangled novelty to create some exciting facts and figures to keep managers busy.