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"Big Data" Meets HR

Saturday, June 16, 2012
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Over the last decade, the HR profession has transitioned from a lack of information and technology to an avalanche of data from various sources. We get reports from our internal systems and also from the myriad of service providers for benefits, recruiting, learning and other HR functions.

In HR, there is a growing need to master the avalanche and to use "Big Data," as it's being called, to produce better results for our companies and our employees.

Problem is, large amounts of the data and reports flooding our inboxes are inconsistent and unusable. Information is often pulled off systems by disparate providers or suppliers after being generated by those suppliers for their own internal needs and purposes.

The client's information needs are incidental and secondary. One client recently estimated that 30 percent of all the data it receives must be scrubbed and made internally consistent before it can even be reviewed by HR managers.

Responding to this problem is a burgeoning industry segment focused on the core data and information necessary to determine whether benefits programs are well-utilized, whether the plan provisions are well-understood by employees and dependents, and whether enrollments reflect knowledge or habit.

Every major segment of human capital management is beginning to develop business-intelligence solutions and tools designed to better measure the effectiveness of HR processes.

In mastering "Big HR Data," HR executives should first focus on what they would like to know if only they could find the right data and information. In a recent survey of multiple customers, Taleo found that almost all of them measured time-to-hire, but not quality of hire. HR leaders need to look at end-to-end processes and determine the key performance indicators that are relevant and meaningful to their respective companies and institutions.

While time-to-hire is one measure of recruiting performance, it is not nearly as important as integrating the performance reviews, disciplinary problems and resignations occurring in the first two years of engaging a new employee.

Quality of hire is a much more critical data point than time-to-hire or even cost-to-hire. Newer, systematic and integrated analytic tools combine hire, performance, compensation and training reviews into a comprehensive view of new-hire quality.

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The same is true in learning and training, where analytics play an even more important role. Companies commonly spend huge amounts on training but often have inadequate measures of competency, mastery and subsequent usage in the workplace.

Management guru Peter Drucker once taught us that we can manage something if we can measure it, and the corollary is that we should not spend capital on outcomes that we do not or cannot measure.

The HR community needs to harness the data it receives to better understand overtime use and abuse, on-the-job injuries, segment disabilities, employee savings rates, learning results and many other areas.

The key is to use Big HR Data to produce better results in finding, nurturing and paying our most important single asset, our people.

Lowell Williams is a director in KPMG's Shared Services and Outsourcing Advisory group, based in New York. He can be reached at lcwilliams@KPMG.com.

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