By Eduardo Suárez Battán - Partner
September 2019

How "People Analytics" potentiates Human Capital Area

HR executives are seeing that, in the US, many companies are already using technology as a tool to get to know their employees more, in a similar way to how Marketing does to get to know their customers or consumers more. . To quickly explain what is meant by "People Analytics", we can say that it is the use of computer techniques of "Big Data", "Business Intelligence" and even "Artificial Intelligence" in the area of ??HR in order to better understand to their collaborators and thus increase their degree of satisfaction and productivity within the company.
The main innovation with respect to a more conventional approach is the intensive use of data for diagnosis and decision-making by the "Human Capital" management, in order to have more "hard" information regarding who to hire, who promote, what should be the ideal organizational structure of the company, etc.
Some of these US companies are already incorporating a People Analytics Manager, an “HR Data Engineer”, an “HR Business Intelligence Engineer” or a “Data Scientist” into their structures. Clearly these technologies are becoming a reality and are not only currently used by Google and Facebook.
But what is behind this trend? Why is it becoming useful and how far should its use go?
The HR Executive, or CPO (Chief People Officer), has a mission that goes beyond managing “employees”, or ensuring that they are well paid, or that they are well hired and properly evaluated. He is the one who must help take care of the "asset or human capital" as a CFO does with the "physical assets / assets" of the company.
With the advancement of technology, companies will increasingly depend on human talent and the leadership of managers to grow (and maintain) their brands and businesses. Robots, automation and technology will replace many of the "human resources" that are on the production line or in customer service areas. However, the human capital that will be key is that which allows to "use and govern" these technologies so that better use can be made of the information that arises from the data available in any function in the company.
We are more used to the Marketing area using consumer and customer data to make decisions based on behaviors. However, this data can also be used within the company in the analysis of the behaviors and personal characteristics of the collaborators. This implies that there must be specialists such as an "HR data scientist." who will analyze and interpret the data and footprints that the collaborators are “leaving” in their internal actions to learn more about their behaviors and competencies and then visualize and design their careers and new organizational structures.
This is in addition to the fact that today's companies are ceasing to be hierarchical to being more horizontal and even organizing and defining themselves as networks based on the needs and the business environment. This makes the team more important than the individual. The data and analysis will not be aimed at measuring the individual achievements of people but their ability to achieve them as a team. It is an HR paradigm that needs to be changed. The collaborator who increases the performance of those who work with him is becoming more and more valuable and, even more valuable, if this is his circumstantial leader. The fundamental task of the manager and leader is to lead his team so that there is a good climate of collaboration, generation of innovation, that they try and take risks. This task of caring for and taking advantage of talent and human capital is fundamental and the metric by which the performance of these leaders should be valued.
The use of People Analytics will be for everyone because it will be useful for companies, but also for NGOs or non-profit associations since it could optimize their processes of hiring and loyalty of collaborators or volunteers. Algorithms are likely to be more effective than people when it comes to choosing the best candidate, especially in lower-level positions like McDonalds does, which is using these technologies to take care of employees in the premises. As is already done in many disciplines (for example in finance), technology is more effective than the human brain that makes mistakes when making some decisions, either due to biases or “noise” or mood or the routine, these errors being very frequent, for example, in selection processes.
Consideration of diversity will probably also improve as there are no paradigms and selection will only be made via cold analysis of a CV. Lack of diversity is a general problem in all industries where many people are not chosen because they have a CV that "does not sell" or an "inappropriate" appearance. A hiring model based on technology and data can be selected considering the ability to develop the work that is requested, which may be the key to the integration of various groups.
Finally, it will be necessary to see how this use of technology and data does not exceed the limit of privacy. In any case, it is already a topic that must be faced and taken care of when collaborators put data on Facebook or other social networks. It will be another challenge and one of the great tasks to be solved by the Human Capital area.

Eduardo Suárez Battán


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