1 why your hr department needs big data
2 why your hr department needs big data 2 Introduction Big Data is a term that increasingly is used to describe the emerging industry of analyzing multiple databases in a scientific way to get answers that can help business leaders make decisions and predictions. hired, where they came from, how they re doing at the company and what career paths they might be on. Any single database -- hire dates, for example -- is useful on its own, but the concept of Big Data is to take multiple databases and make them work together, like instruments in an orchestra. The result is greater than the sum of its parts. and identify areas of improvement. This white paper will examine the trends that have made this kind of data analysis possible, provide concrete examples of how it works and explore what this opportunity means for HR departments at companies of any size. HR departments in particular are sitting on enormous amounts of potentially useful data about every employee -- when they were More companies are discovering the benefits of using Big Data principles to enhance employee experience, boost performance Understanding Big Data One of the main misconceptions about Big Data is that it s a magic wand, a mysterious and almost supernatural way to make predictions about anything that might happen at a business. In reality, it s simply a faster, more powerful and more efficient way to examine and analyze data that a company has. It can t come up with information you don t have, explains Peter Cappelli, director of the Center for Human Resources at the Wharton School and education professor at the University of Pennsylvania. It can only look at information that is already being collected, and mainly it looks at relationships within such data. Unless the employer already has information about something, Big Data approaches no use, Cappelli says. HR really will be changing because the volume of data is increasing, and the HR manager will have to change the way they look at candidates, the way they hire, the way they manage online and offline recruiting processes. Jeant-Paul Isson Most companies are likely familiar with the data analyses that make up the concept of Big Data, and already are collecting data that they could use in analytics. To get good results from an analytics project, you need a few things, says Rusty Frioux, owner of DataClear, a business analytics advisory and technical services firm. First off, you need data that has been collected consistently over time. Secondly, you need management with a good set of business questions for study. Thirdly, you need analysts trained in a few basic methods, a good understanding of your business and the data systems used to manage it.
3 why your hr department needs big data 3 Many companies likely already have a lot of useful data they can examine with analytics, and human resources departments should be prepared for an increase in the volume of available data as time goes on, says Jean-Paul Isson, global vice president of predictive analytics and business intelligence for Monster Worldwide and author of Win with Advanced Business Analytics: Creating Business Value from Your Data. The increase of volume and the variety of data will impact business as we know it, Isson says. HR really will be changing because the volume of data is increasing, and the HR manager will have to change the way they look at candidates, the way they hire, the way they manage online and offline recruiting processes. More importantly, they ll be using Big Data to harness and optimize their workforce. If an HR department is interested in bringing Big Data analytics to their company, it will be important to have buy-in from managers at the business. Well-planned data reporting, clever visualization and analysis that will confirm or deny a specific business hypothesis or find unexpected insights from company and industry data are key aspects of Big Data, Frioux says. But to do anything with it, most importantly, [you need] executive sponsors that are willing to take action on the answers you find. While many businesses have always been interested in data manipulation, database crunching and predictive analysis, three major trends have inspired the rapidly growing interest in the use of Big Data principles. Big Data Growth in Zettabytes 1,2 Zettabyte Just how BIG is a Zettabyte? 10 TERABYTES in Pages of Printed Text 3 1 Zettabyte 1,073,741,824 Terabytes That s 107,374,182.4 Libraries of Congress 1 Sources: Nasscom -CRISIL GR&A analysis 2 Reuters graphic/catherine Trevethan 05/10/12 3 What s a Byte, Megabytes, Gigabytes, Terabytes... What Are They?, (accessed 25 Jul. 2013)
4 why your hr department needs big data 4 Moore s Law 1 Increase in Transistor Count (Logarithmic Scale) 2,600,000,000 1,000,000, ,000,000 10,000,000 1,000,000 Pentium 4 Pentium 3 Pentium 2 AMD Pentium 10 Core Xeon 8 Core Xeon Intel Core i7 Atom 100,000 Intel ,000 2,300 Intel 4004 Intel 8080 Intel Massive Increases in Computer Processing Speed More powerful computers make it possible to manipulate larger databases and to find connections better than ever before -- and that is expected to continue. There s something called Moore s Law, named after Gordon Moore, says Patrick Riley, CEO of Modern Survey. He was one of the founders of Intel, and in the mid- 60s he said computer processing power is going to double every year to two years, for the next 10 or 15 years. That s actually carried through to our current time. The first iphone has about one-eighth the processing power that the current one does. People predict that these improvements are going to stop, but it s not going to stop anytime soon. It s going to continue on for years and it s absolutely remarkable. Increased Transparency Employees and companies have adapted to increased transparency of personal and professional information. Many professionals maintain an active LinkedIn account describing their work experience, skills, training and education. This data is beneficial to employees who wish to remain marketable in a competitive workforce, and it s also beneficial for companies who wish to search and recruit for specific talents and skill sets. HR departments commonly have employee data such as length of service, performance evaluations and personality or morale surveys, and there are other, less obvious databases that may be available as well. By 1 ASML, Sustanability, Enabling Innovation, (accessed 25 Jul. 2013)
5 why your hr department needs big data 5 combining HR employee data with new social networking datasets, there are substantial sets of data to consider for analysis. Even computer monitoring can result in useful data, as long as the company is comfortable with the ethics of doing so, and knows what kind of data it is looking for. Simpler Integration Databases can connect better than ever before through APIs (Application Program Interface), data push and data pull. Really, it s cloud computing, says Isson. You don t spend money on infrastructure and servers and all that. It s fast, so you can do more than you did before. You can crunch data from multiple databases with larger volume and velocity. The options, Isson says, can become overwhelming. That s also the challenge you have with Big Data, he says. The HR manager sees all this data increasing, and they don t know where to start. But [data collection and storage] will enable them to lever the power of Big Data more than they did before. Sometimes knowing what to leave out is the most important step. Just because you have access in terms of data, that doesn t mean it s important, Riley says. One very, very important thing that people need to understand is that there are data points that are more valuable than others. We can do a lot with data, and manipulate it in a lot of ways, but that doesn t mean we should be doing that. Not all data are created equal. To get a handle on the concept of Big Data, think about it in two parts. There s the mechanical piece, the IT piece, Frioux says. How do we take all this river of information and feed it into tables or databases or systems, so that we can ask questions of it? That s a big piece of it. The other piece, the sort of powerful edge of the practice, is the decision science piece. Once we have a business question, how do we get an answer that is scientifically valid and useful out of that sea of data? Requesting DATA from TWITTER through API Your HR APP needs DATA from Twitter Your HR APP requests DATA through Twitter s API Twitter retrieves DATA Twitter returns DATA to your HR APP through API
6 why your hr department needs big data 6 Driving HR Functions Through Science As currently used, the phrase Big Data is, at heart, the application of investigative methods practiced by scientists in other fields to business problems -- and the techniques used to organize and refine the massive business data sets available to solve those problems. It s valid to think about a Big Data problem like you would many other scientific problems, even calling up the old scientific method taught in schools around the world, Frioux says. The first thing you d do is come up with a hypothesis. For example, if you want to know who to hire for which job, you might guess that Workers with high IQs will perform better in our organization than workers with low IQs. You d then go and get the data sets that you need to test for that question, if you have them. With some basic analysis you can then know with reasonable statistical certainty if IQ is or is not correlated with performance in your organization for this set of workers in these jobs. It s then up to the analysts and managers to determine what those results mean and how they might be applied to the organization as a whole, Frioux notes. see who might succeed at a company, who might stay at a company longer -- and who might not be a good fit. Imagine hiring for a sales position, Riley says. By combining skills and personality assessments that candidates currently complete with external social media data such as influence scores like Klout, organizations will have a much better idea if one candidate has the skills, personality and relationships to be successful in the sales position. And it goes both ways. Candidates will be able to get more insight into the organizations where they may be applying, Riley says. Prospective employees can match their skills and cultural traits with ideal organizations for them. Even specialty workers, such as welders or health care specialists, can learn in real-time where good jobs are. Big Data also comes into play with online recruiting, says Isson. He says Monster leverages Big Data to find performance metrics in hiring decisions. Every job that you post, you can tell how the job is performing compared to the benchmark, he says. If you post a job in New York, and the category has been on the site for three or four days, we can provide you with statistics of a similar job that might be getting 300 views with 30 applications. If your specific job is getting 200 views and five applications, you would be able to see its performing average. The good news is we can then leverage Big Data to provide the best practices to improve the ad. We re looking at millions of postings and then we run multiple models to assess the performance of jobs. We can optimize where and when to post the job, and [find] where you get the best response for the jobs. 37% of employers are using social sites to research job candidates 1... Which sites are employers frequenting most? Facebook 65% Recruiting Using Big Data can help companies identify the best hires and use predictive analysis to Linkedin Twitter Other 63% 16% 17% 1 Career Builder, April 2012, Survey conducted within the U.S. by Harris Interactive on behalf of Career Builder among 2,303 hiring managers and human resource professionals between February 9 and March 2, 2012.
7 why your hr department needs big data 7 Performance Tracking employee performance with Big Data can identify processes that need to be improved or highlight issues that weren t clear before. It can also make predictions on an employee s likely performance -- or whether they will leave the organization. Modern Survey's Heat Platform View employee engagement levels in a 9-Box. Employee Engagement Percent Favorable Scores Right now, we re able to look at the effectiveness with which someone is onboarded into the organization and make predictions on how engaged they will be after a year, Riley says. We can make predictions on the likelihood that they will reach their performance goals, and how long they will stay with the organization. We re able to predict the chance that someone who responds a certain way to a survey question is close to leaving the organization within a year. This is a current Modern Survey capability. This kind of predictive analysis can save a company a lot of money -- if something in an employee s first few days at a company can drive her to leave within a year, changing that becomes an important part of employee retention. In order to make these kinds of analyses, companies will need to assess employee attitudes regularly to have data to track. At a bare minimum, performance and engagement should be assessed annually, says Riley. Optimally, engagement should be measured every six months or quarterly. It doesn t have to be this really big engagement survey -- quarterly measurements can just be check-ins, a three-minute or five-minute survey. Then do an annual survey where it s a little more involved in the results. Think about really talented athletes. Good coaches give feedback constantly. This level of feedback ought to be happening in the workplace as well, and technology is enabling that. The use of our solution mperform is not a performance assessment or evaluation, it s management, and management implies constant feedback. Benefits Riley describes a scenario where companies build benefit profiles by job type, modeled on what other employees have chosen and what their satisfaction level was. That information could be shared with each new hire, he says. That, coupled with the new hire completing a preferences assessment, will enable recommendations for tailored benefits packages. The result is employees receiving optimized benefits, while the organization can reduce costs by eliminating benefits that aren t useful for employees.
8 why your hr department needs big data 8 How Big Data Is Changing HR Now While discussions about HR/Big Data can sound overwhelming, the results are clear and simple. Correlating data to performance can help identify parts of a process that need improvement. For example, examining how effectively a person is onboarded into an organization and how that correlates to that employee s other data (attitude toward work, effectiveness as an employee, short-term performance and so on) highlights areas where other onboarding processes result in better outcomes. Big Data analysis can also be predictive -- examining an employee s data can result in predictions about the employee s long-term engagement with the organization. It s changing the role of recruitment in HR, Isson says. Forward-looking companies are looking at predictive analysis for at-risk employees. They identify the top performers who are at risk of quitting. They can leverage employee satisfaction -- have these performers attending conferences, checking their social media presence, looking at the distance they go to work, the interaction with their peers -- to create this score. Why is this employee at risk of quitting? [Hewlett-Packard] was able to score an entire employee population, 330,000 people, to come to an at-risk-to-leave score for every employee. They had the managers focus on the top performers to make sure they didn t leave. They addressed the issues found through predictive modeling. What s Next The current way of hiring a salesperson, for example, consists of looking at resumes, interviewing people and checking their references. By using Big Data, hiring managers will be able to take one metric -- such as social media influence -- and integrate that with performance metrics and financial results to better identify the best hires. This predictive capability will start earlier in the process by gathering and integrating assessment data, social influence, experience and other data that will affect performance with onboarding, engagement and tenure data, Riley says. Models will continue to evolve and become more precise. Isson compares the predictive part of Big Data to Siri, the Apple ios search feature that tries to provide information a user might be looking for, not just an answer to a question. Siri does a semantic search, information you would request, he says. It s semantic behind the scenes. We believe that kind of work is a game changer. That will be the challenge for the HR manager, he says of grasping the implications of predictive analysis. It will optimize day-today activities. While the use of data analytics and predictive analysis might sound like a cold new world of management, experts say there will always be a need for the human touch, and that Big Data is simply another tool to manage effectively. Human intervention will always be necessary, Isson says. Big Data can do the preliminary machine work, such as looking through resumes. Going through a gigantic mound of resumes shouldn t be done by humans; we have a machine that can do that. Then you can find more effective candidates, and increase your own productivity as well. The human still has to be there to make that judgment.
9 why your hr department needs big data 9 Conclusion Some companies are reluctant to use Big Data in HR because they are intimidated by the technology or feel like they don t have data that could be useful to such analytics. But companies that incorporate Big Data into HR practices are finding that the results speak for themselves -- more effective processes, better hires, less turnover, increased productivity. Big Data, no matter how you define it, isn t magic. It can t take the place of well-crafted business strategies or good managerial instincts, says Frioux. It can, however, help good managers make better decisions by minimizing the guesswork in both day-to-day and strategic decision making. If we can use data to improve the employee experience, we have an obligation to the employees at our organizations to do that, Riley says. The employee experience for the vast majority of people in this country and around the world is less than optimal. If we can use data to fix that, we absolutely have to. To learn more about how to create and implement a Big Data strategy at your organization, Modern Survey is here to help you. Please or call to schedule an appointment with one of our representatives.
10 about us Modern Survey measures workforce intensity that fire in your company s belly that makes all things possible. Our human capital measurement software combines feedback, benchmarks, and data from enterprise systems to elucidate the correlation between employee performance and company success. We analyze the stuff your talent management system can t so that you know what to do next. We are Modern Survey. And we are relentless. Find us at Tyler St. NE, Suite 170 Minneapolis, MN (866) modernsurvey.com 2013 Modern Survey