To maximize success, HR professionals need big data

Chinese businesses' major investments in big data are putting the nation at the forefront of opportunities in AI (image Easyturn / iStockPhoto)
Companies need to learn how to make the most of their big data to drive success. (Easyturn/iStockPhoto)

Failure to incorporate big data into human resources can hurt managers and companies, an expert says.

“Historically, HR departments have been run by wonderful people who are great people-people,” Jenny Dearborn, co-author of “The Data Driven Leader,” said in a recent podcast. “They are great at the human interaction. They’re great at being empathetic. They’re wonderful at caring deeply about how people feel, and that’s fantastic. But really to be a competitive differentiator moving forward, we need to move beyond that, and we need to use all of the tools available to us in order to be more effective. Every other functional area in a business is using all of these resources available to them, all of the data and insights. HR needs to use that, too.”

But an organization’s data is not always readily packaged for HR’s use, she added. For instance, the sales department holds sales data, customer interaction data is with the customer service team and productivity numbers might be in multiple locations. To make the most of the data, they need to share it, but that’s a point of contention for many division leaders, Dearborn said.

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“They’re concerned with: ‘If I give you this information, how are you going to use it to potentially make me look bad, make me look like I missed a trend or that I wasn’t doing my job as well as I could have?’” she said. “There’s a lot of searing skepticism about giving over raw data to a central group and saying, ‘Triangulate this. Put some algorithms on top. See what you come up with.’ People are quite reluctant to share.”

Concerns about data privacy are another challenge, especially in light of recent breaches at major companies such as Equifax, Uber, SunTrust and Yahoo. The balance between company rights and consumer protections is still being worked out at many organizations.

The catch is that “most companies have all the data they need, they just don’t know how to use it,” Dearborn said. They have data on customers, employees, accounts and earnings, but they don’t know how to translate that data into actionable information. As a result, HR departments are looking to hire data scientists. In fact, it’s the most requested new job at departments, Dearborn said.

As analyses get more sophisticated, companies can begin to predict future successes, right down to the individual employee level, she said. “You can say, ‘I believe this employee will be successful in the future. There is a 90 percent confidence rate that this particular employee will make quota at the end of the year. I believe this other leader will likely fail, unless there is some sort of intervention,’” she said. “You extrapolate that out, and you can start to predict behavior. That’s really powerful. It’s a wonderful tool for a corporation to make sure that they meet their revenue targets.”