The Big 5 on why start applying predictive analytic’s to the people / workforce management area. In my experience this offers the quickest way for any HR executive to gain both senior management and peer credibility plus rapidly achieve measurable business impact…

All the evidence points to the fact that HR are laggards in getting into using these advanced analytical methods than their peers in finance, marketing and operations. Bersin (2012) research found with HR data 86% organisations are reporting and looking retrospectively with only 4% using any form of predictive analytics. PWC (Saratoga) research in 2012 found only 12% organisations had reached level 3 people analytic’s and estimated only 1% were engaging in some form of predictive analytic’s….so why is that?

The Big 5 on why you can start using predictive analytic’s in HR now…

1. If you are already producing a set of executive scorecards or historical people data reporting, you are mature enough to start

Predictive analytic’s does not require organizational maturity; it requires finding people with predictive-analytical skills.

2. You do not need to have the latest and greatest version of your existing HCM providers application fully operational, its about data not process automation

It’s all about the problem issue you want to address and building a hypothesis to test the decision making assumptions with relevant data. Step one is to quickly determine the data and sources of information you may need, until you have actually done this you will never know. Remember, you do not need to have full end to end ‘integrated’ HCM/ERP systems in place, its all about the data and quality of this data not process automation.

3. It will likely cost you less than 1 FTE to produce an initial set of results

Getting started should require a relatively small investment and project i.e. a few pounds per employee and weeks in time frame. If your core HCM systems are less than 7 years old then they will have been designed with web services and have defined application programming interfaces i.e. much simpler to achieve robust secure integration. The ROI on any predictive analytics’s project will be greater and easier to monitor than traditional HR technology projects. Early proof of concept projects will provide insight to support this and gain executive investment in broader usage.

4. Currently it’s unlikely that your existing HCM provider is able to deliver the ‘best’ predictive analytic’s solution

A number of the global HCM providers have started to promote a range of predictive capabilities. I I would caution anyone blindly assuming these standard packaged predictive-modelling solutions will provide you with the best value and results. It’s all about focusing at the problem, getting the data and using a set of tools that will really provide insight and results, ones that can be easily deployed and easily maintained. We are aware of companies finding that some of the more innovative tool provided by specialist analytic’s companies are capable of producing a 10-15% uplift in accuracy of results which is a huge difference.

5. You do not need to hire anyone to get started

If you work in HR you already know having the right people with skills will be key. But, you don’t necessarily need to employ any data analysts, just make sure you have them in your project team. In practical sense you will need little time from these highly skilled individuals. Getting the data, making sure it’s clean and valid and even deployment of the model reside in core technical skills residing around your existing HCM applications platform. The most important skill set for deriving value from predictive analytic’s involves interpreting the results to arrive at business insights and linking them to actionable workforce decisions i.e. Business savvy HR and operational managers.

BTW, Coco – like many of our clients –  needed a bit of help!