HR Leads Business

Jan 13, 2017 | Barry Lawrence, HRCI Staff Writier

HR, Big Data and the Human Factor

Human resource management has joined the "big data party," making use of new information sources to make more precise talent management decisions. That is well known. But what many have missed is perhaps HR’s biggest opportunity: to impart the human factor into big data and information technology management.

In fact, many experts believe this is where future human resource management activities can add the most new value for organizations.

Big data, analyzed and turned into information, is the new currency that drives business and even industries, notes Wayne Brockbank, Clinical Professor of Business at the University of Michigan’s Ross School of Business. As the defender and creator of organizational capability and differentiating talent, HR cannot help but move into the most fundamental and dramatic trend in global business, Brockbank writes in The Rise of HR, an HRCI e-book.

HR Can Help Design and Interpret Big Data

An extensive study, conducted jointly by The RBL Group and the University of Michigan, looks at HR activities and relative impact on both internal and external stakeholders. When exploring internal HR activities, Integrated HR Practices, as we’d expect, was shown to create the most value for employees and managers. Integrated HR practices include traditional HR roles such as risk management, the handling of employee complaints, and the creation of workplace policies, practices and procedures.

But when exploring HR activities with the biggest impact on customers and other external stakeholders, HR Information Management Practices led the way. And by HR Information Management, the data was not suggesting more focus on HRIS systems and other HR technologies, but on HR’s role to help businesses to, first, get the right data and then help employees translate data into useful insights.

It wasn’t even close.

HR Information Management (77.4 percent) outpaced Integrated HR (13.4 percent), Employee Performance (2.3 percent) and HR Analytics (2 percent) as the most important HR competencies that create value for customers and other external audiences.

HR’s Role in Information Management

This is good news for human resource professionals, according to the researchers: The management of data is a new area where HR can make significant impact on external stakeholders, something CEOs want dearly from the HR function.

The bad news: So far, this has not been an area where HR has a proven track record.

But strides are and can be made with some outside-the-box thinking. Many HR leaders have begun to address the big data conundrum. The Human Resource Competency Study findings, for example, sheds light on the specific kinds of HR Information Management roles HR can play to create more external value from data. HR can:

  • Identify important external information that the organization needs.
  • See that information is imported into the organization for critical decision-making.
  • Be involved in identifying important data patterns to generate insights.
  • Ensure that the application of big data analytics is part of organizational decision-making.
  • Bring in important external information to share across the organization.
  • Bundle external and internal information to create competitive advantages.
  • Determine policies for monitoring employee use of and access to key information.
  • Oversee the full use of information in decision-making.

Such human resource management activities and competencies can help businesses pivot from information discovery, now a commodity, to swifter interpretation of complex information patterns, notes Dave Ulrich, a professor at the University of Michigan and a partner at The RBL Group. This is a gap that HR can fill to help organizations make sense of unstructured information.

Numerous examples abound. HR hires special counselors at Seven-Eleven Japan to visit 16,000 stores each week to ensure the matching of supply with demand. At Disney, employees are required to make market research calls. Ulrich provides other examples, such as collaborative information sharing that can be included in 360s reviews, best practice sharing among senior leaders, and ensuring that the right people are in decision-making forums.

These HR activities can create new competitive advantages, adds Ulrich, a proponent of HR adopting an outside-in strategy to meet business goals. Ulrich admits that this is a new world for HR. But when done right, this is an HR activity that can have more impact than anything else HR does.

Big Data and the Human Element

Organizations, by and large, still struggle to derive value from data and analytic initiatives, according to Forbes Insights research, Analytics: Don’t Forget the Human Element ― Data and Analytics Impact Index.

Companies must contend with organizational resistance, processes, incentive systems, skills mismatches and other factors that are essential to achieving greater buy-in for analytics-driven approaches," according to the report. Enterprises are beginning to address these challenges by recognizing the importance of change management and forming teams or centers of excellence to elevate these initiatives across the entire organization.

HR is in the perfect position to be big data’s center for excellence. Thanks to technological advancements, HR can now expand from traditional roles emphasizing compliance and internal people enablement to taking on more transactional enablement challenges that impact customers and other external stakeholders.

Technology is changing HR. But HR can also help change how people in organizations gather and use data produced by new technological innovations. Without a doubt, analytics and big data can mean sounder decision-making, impactful leadership and increased business value.

Technology is part of the solution. But we cannot forget the human element. And that’s where HR can excel the most.