How Data Trends are Changing the Role of Human Resources

In September 2022, I had the privilege to share my thoughts on how data trends are changing the role of Human Resources with Students from UniAthena. During July 2023, I will be presenting a follow-on webinar in which I hope to share the latest insight on the topic. As data has become an invaluable resource, we are still experiencing a transformational shift driven by data trends. According to a survey by McKinsey, more than 90 percent of chief human resources officers (CHROs) predict significant changes to the HR operating model during the next two to three years. Some of the data trends that are influencing these changes will be discussed below.

Data-Driven Decision-Making in HR:

In a world where data is abundant, HR professionals are increasingly relying on data-driven decision-making. Research conducted by McKinsey & Company shows that data-driven HR practices lead to better organisational performance and higher revenue growth. For example, Google adopted a data-driven approach to optimise its hiring process, resulting in improved quality of hires and reduced time-to-fill. By leveraging data analytics, HR can make informed decisions regarding talent acquisition, performance management, employee engagement, and more.

Predictive Analytics for Talent Acquisition and Retention:

Predictive analytics is revolutionising talent acquisition and retention strategies. By utilising algorithms and machine learning, HR departments can predict candidate suitability, forecast employee attrition, and implement targeted retention programs. IBM is a prime example of a company using predictive analytics to enhance talent management. They developed an AI-based model to identify high-potential employees and tailor development programs accordingly. This approach has significantly improved employee engagement and retention rates.

Personalising Employee Development with People Analytics:

Gone are the days of one-size-fits-all employee development programs. HR professionals are now utilising people analytics to personalise learning and development initiatives. Through data analysis, skill gaps can be identified, and tailored training programs can be created. Microsoft is a frontrunner in this area, using people analytics to recommend personalised learning paths to employees based on their skills, preferences, and career aspirations. This approach not only enhances employee development but also improves overall performance and satisfaction.

Mitigating Bias and Promoting Diversity through Data Analysis:

Data analysis plays a crucial role in addressing bias and promoting diversity within organisations. By examining data from various HR processes, including hiring, performance evaluations, and promotions, HR professionals can identify and eliminate bias. For instance, Gap Inc. adopted an evidence-based approach to tackle pay equity and ensure fair compensation for all employees. They used data analysis to identify and address any gender or ethnicity-based pay disparities, resulting in a more inclusive work environment.

Leveraging Employee Feedback and Sentiment Analysis:

Employee feedback is a treasure trove of insights that can inform HR decision-making. With sentiment analysis, HR professionals can gauge employee satisfaction, engagement levels, and overall sentiment through surveys, social media, and other sources. Airbnb exemplifies this approach by using sentiment analysis to analyse employee feedback and make data-driven improvements to their work environment. This not only boosts employee morale but also fosters a culture of continuous improvement.

The data trends discussed above have significant implications for the role of HR in the organisation. HR continues to transition from being a support function to being a strategic partner; from being reactive to being proactive; from being transactional to being transformational. Some of the ways that data trends are changing the role of HR are:

HR as a business partner: 

Data enables HR to align their activities with the business strategy and objectives; to understand the needs and expectations of the business stakeholders; and to provide evidence-based solutions and advice. HR can also use data to identify opportunities and risks for the business; anticipate future scenarios and trends; and drive innovation and change.

HR as a talent leader: 

Data enables HR to attract, develop, and retain the best talent for the organisation; to create a diverse, inclusive, and engaged workforce; and to foster a culture of learning and growth. HR can also use data to understand the motivations, preferences, and feedback of employees; to design meaningful and rewarding employee experiences; and to empower employees with autonomy and flexibility.

HR as a change agent:

Data enables HR to lead and facilitate organisational change; to communicate effectively with employees and stakeholders; and to monitor and evaluate the progress and outcomes of change initiatives. HR can also use data to diagnose organisational issues and challenges to improve the design of impactful interventions.

The changing role of HR in the era of data trends presents immense opportunities for organisations to optimise their talent management practices, foster diversity and inclusion, and enhance employee engagement. By embracing data-driven decision-making, predictive analytics, personalised employee development, bias mitigation, and sentiment analysis, HR departments can elevate their effectiveness and make a significant impact on organisational success. As technology continues to advance, it is crucial for HR professionals to stay updated with the latest research and industry examples, allowing them to leverage data trends and drive positive change within their organisations.