HR Analytics has made its way to HR departments — at least the field has been on the platforms and in articles for years. However, there are still no figures on the prevalence of relevant technologies and skills in companies. This is also due to the fact that the terms are often not clearly defined. The analysis by the Cologne Institute for Economic Research (IW) to be published these days, which we previously had exclusively, can help here.
Even if researchers Andrea Hammermann, Judith Lear and Alexander Borsted, who wrote the report, can only identify clear differences on a limited scale. “In reality, the terms HR analytics and HR control, for example, are not clearly distinguishable,” Andrea Hammerman, who works at IW as a senior economist for working conditions and personnel policy, says in an interview. In many cases, HR analytics is a further development of employee control, but the focus is more on the cause-and-effect relationship. “For example, it is no longer just about the number of employees leaving the company, but also why,” she explains.
Better conditions in large companies
Additionally, HR Analytics focuses on a predictive – future-oriented – approach. Hammermann noted that “looking back will only help in a limited way in many areas.” “In particular, companies currently undergoing far-reaching transformations are asking themselves which employees will need skills in the future.” HR analytics can partially answer such problems. However, “the results can be very good [können] Such data and analysis methods are used,” states the report, which also considers other success factors: “In addition to technical skills, the introduction of HR analytics also requires tangible business benefit, management support, and skillful presentation of results. Close coordination is required between the departments of human resources, information technology, finance and the concerned departments. Confidence in cooperating with employee interest groups is also essential to the success of the project. Compliance with data protection and ethical guidelines must always be maintained.”
In general, conditions in large companies seem to be becoming more favorable, Andrea Hammermann also emphasizes. You often need the time and technical resources that are more readily available in larger companies. It is also easy to answer the feasibility study question in the affirmative with a larger workforce. “When it comes to the question of whether HR analytics is useful in hiring, for example, it makes a difference whether you hire 300 or 3 people a year,” explains the scientist. Additionally, the availability of data and digital infrastructure required for assessments in corporate environments is likely to be more likely.
So far mainly testing balloons
In general, large companies have an advantage when it comes to all data-driven questions. Since the more employees there are, the more data is available and the better it is evaluated. This applies even more to machine learning, and small businesses can only access publicly available data – for example from the Federal Statistical Office or other authorities – or rely on cooperation. This is often difficult due to the competitive situation between companies. However, it is possible to envisage joint ventures within the framework of industry associations. “It’s then about attracting talent to the industry and the professional field,” Hammermann says. So it would make sense to work together there.
So far, many HR analysis projects seem to be test balloons, even at big companies. But that could soon change: “The significant and possibly growing shortage of skilled workers will require more professionalization in human resources,” the IW report says. “Part of this could be HR analytics, for example to more accurately identify employee requirements, to tailor employee development or to increase employee retention.” The necessary technologies and corresponding skills may also be more prevalent in the future than they are today.