The Future of People Analytics and Human Resources
The following is an excerpt from a dialogue between Takako Ogawa, CEO Panalyt Japan, and Chi Tran, COO Panalyt Japan focussed on how people analytics will impact the evolution of Human Resources Departments and discussing how the future of HR lies in being a proactive & strategic business partner.
Takako: In the series, you have discussed various perspectives that highlight “the wave of data utilization will come to the human resources field in the future”. How do you think the future human resources department will change?
Tran: Firstly, I believe that it will change from a reactive role to a proactive role. I think that more strategic roles will be required instead of operational roles. It will be necessary to have personnel as business partners who will support the organization while keeping pace with management and the field.
Takako: Certainly, the “two major trends for the future” that authorities in the human resources field have recently put together are (1) automation of operational work by machines, and (2) the tendency of reducing office personnel as a result. It seems that it will be necessary to evolve from a conventional manual and operation-heavy occupation to a smarter and more tech-savvy department. On top of that, you need strategic decision-making support on the premise that you have the expertise of human resources that machines cannot do. By the way, as a person who has been in the field for many years, what kind of proactive support do you seek from personnel as a business partner?
Tran: Hmm… So, my impression of human resources so far is more like the police than a business partner. For example, I got the impression that they play the role of cracking down on employees who do bad things and acted as the labour management that dealt with evaluation and recruitment processes, and beyond that, there wasn’t much visibility regarding what they were doing elsewhere. Also, I had the impression that understanding what was happening in the field and actions tended to be slow.
Takako: I see. Certainly, the role of human resources is often a black box for those in the field. In order to establish a position as a business partner, a change of image around that aspect may be necessary.
A long time ago, I knew a senior employee who was very trusted by the department manager in the field as a business partner. For example, when things on the ground got very busy and others were trying to compromise on hiring standards, she said, “Are you compromising on hiring standards just because you don’t have enough on-site workers? You shouldn’t proceed with the selection unless you have a clear image of success. If good candidates aren’t in the pipeline, we’ll do whatever we can to fix them. Compromising is good for the future of the team, but it’s not good for the candidate.” Then, she proposed a number of measures to strengthen the pipeline and kept an eye on things until an ideal candidate was chosen for the position.
As a recruiter, it would have been a quick personal achievement to fill that position with anyone qualified, but for the business and the team, she made an effort to make future-oriented decisions for the good of the company. I think this was a decisive factor in a trusted partner.
Implications of Digital transformation (DX) in Human Resources” Deciphered From Peripheral Fields
Takako: Do you think there are any points that you can learn from DX in peripheral fields such as finance and marketing, as the human resources department becomes increasingly digital in the future?
Tran: I think there are so many. At the upstream “business efficiency” point, the digitization of contact points and the acquisition of digital data in human resources have progressed. As a result, the development of specialized human resources and data processing technology has improved at the midstream, and I think that best practices for what kind of KPIs are important indicators have begun to be established. Ultimately, by using these, I think we can expect to support the implementation of improvement measures with the help of machine learning and improve their overwhelming effects.
Takako: I see. The idea of turnover rates can now be understood with higher resolution by comparing it to the “churn rate” in terms of business. In addition to simply grasping the turnover rate for a certain period in %, it’s also important to know “what attributes of turnover are noticeable?”, “When did you leave the job?”, “what is the secondary impact of the turnover on the business?” If you dig deeper, you can expand the story even with just one topic of turnover. I feel that the turnover analysis based on this churn rate scale is especially stabbed by those who follow business KPIs daily with numbers, such as business managers and managers, even during business negotiations. Even for those who are not yet familiar with grasping the issues of human resources and organizations with data, telling a story with an analogy in a field they are familiar with may increase their understanding and conviction.
Takako: What are the improvements in process accuracy and speed through machine learning in the marketing domain that HR can learn from?
Tran: For example, there is a mechanism that automatically selects target x creative x channel by machine learning so that humans make only the original material of advertising material and then maximize CVR (achievement rate of achievements such as a purchase). In the world of marketing, it is already possible to automatically generate creative cut order, images, taglines, and even appealing content. I think this can probably be applied to creating materials for recruitment public relations as well.
Takako: I think that is a good point. Actually, this was a long time ago, but when I sent an approach email for recruitment candidates, I thought that if I divided the candidate segments into smaller pieces and delivered different messages, the response rate would increase, so I tried that. I remember cutting the segments and messages into very small pieces, creating 270 patterns of email templates, and manually setting the delivery one by one. In the previous year, it was roughly divided, and I think there were at most 20 types of message templates. With this measure, the reply efficiency has improved by 300%. However, my happiness dropped significantly because I set the distribution settings using the power of manual operation (laughs). Now, this kind of thing can be done automatically. I really feel that HR is often taking ideas from peripheral fields.
Finally – HR after the digital shift may be the most creative job
Takako: When I look at the HR departments of several countries and companies, I can say that HR is a department with a lot of routine work. In addition, the operations are extremely diverse and complicated, and since it is a department that handles confidential information, I think it is a very difficult job that cannot tolerate mistakes. I’ve never seen a human resources department that has spare time.
Furthermore, I think that it is also the department that is the most estranged from digital skills. We see the wave of the digital revolution in the Human Resources department as a tremendous opportunity. Originally, the most important management resource should be “people,” and I think that improving the quality of decision-making here has the greatest business impact. Until now, there was little data and it wasn’t quantified.
I feel that HR will become the most creative job in a company when operational jobs are being cut off and transformed into more strategic roles due to the DX conversion of HR. As an HR professional, I am very excited about the future.
I hope that this helped you in promoting the digitization and data utilization of your Human Resources Department. Thank you for visiting!
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