Talent analytics presents the second largest capability gap for organizations, trailing only the need to build better leadership. Three in four companies (75 percent) in a recent Deloitte study believe that using analytics in HR is “important,” but just 8 percent believe their organization is “strong” in this area. So, despite a great deal of media attention and high-profile uses of analytics, our survey confirms that most HR organizations have been slow to get started.
One of the top challenges to building an effective analytics capability is a lack of skills in HR for gathering, analyzing and interpreting data. HR teams need dedicated staff for these activities, and these roles require new and different skill sets. Data from Burning Glass shows that the demand for HR analytics roles is still strong, but the growth in job postings slowed in 2014. As shown in Figure 1, postings for HR analytics roles (which include a variety of data- and analytics-oriented job titles) grew substantially between 2010 and 2013. The number of job postings grew 63% between 2010 and 2011, and a robust 21% from 2012-2103.
In 2014, the site listed 13,335 job postings for HR analytics roles, which is still strong, but just 3% higher than the prior year.
Source: Burning Glass
Part of the reason for the slowing growth in HR analytics job postings may be the difficulty in finding people to fill these roles. Due to high demand for analytics skill sets over the past few years, it is taking longer to fill these types of positions – and becoming more expensive. According to the latest BurtchWorks survey, salaries for entry-level data science roles rose 14% over the past year – to a median base salary of $91,000. Given the time and expense of recruiting external candidates, some organizations are starting to upskill their existing HR staff and/or borrow staff from other functions for their analytics work.
So the difficulty in finding talent for these roles is one factor. But I believe the larger issue boils down to the fact that many HR organizations have not been able to develop a plan or get buy-in for their analytics initiatives. Many simply don’t know where to start. Recent data from a survey by Harvard Business Review Analytics Services and Visier shows that one-third of HR organizations are not investing anything in improving their analytics capabilities. (See Figure 2.)
For the companies that are investing, some of the efforts are encouraging – such as hiring a CHRO with a strong analytics background, or hiring an HR leader with finance or business experience. But just 9% and 16% of organizations, respectively, say they have taken these steps to improve how data is used to make workforce decisions.
In addition, one in five organizations said they approved new HR analytics positions. Given the lack of analytics skills in HR, I’m surprised the figure isn’t much higher. This number is lower than the data from our study in 2013, when 31% of HR organizations said they had hired additional staff for their measurement and analytics efforts – hence more evidence of the slowdown in job growth for HR analytics roles.
One other figure here is interesting: 9% of organizations said they have moved analytics out of HR. If HR leaders continue to drag their feet with analytics, this may be the fate of an increasing number of organizations over time: a centralized analytics function or COE that covers all disciplines – HR, Finance, Marketing, Operations, and other functions. This is what I talked about in my blog “Will HR Lose the Battle over Analytics?”
A centralized, cross-functional team has many advantages. But for HR, this would mean losing control over the crown jewels. In this model, HR will need to compete with many other functions to get the data and analyses they need (and think about how well this works today with IT.)
To avoid this fate, HR organizations should assess where they are today and what they need to move forward. Most analytics teams get their start with a few small wins. Identify a business leader who wants to partner with you on an analytics project to solve a problem in the organization. If you don’t have any analytics staff currently, pull together a few people to do the project – someone who understands the business problem, someone can pull together the data, and someone with strong statistical modeling skills. This doesn’t have to be a formal team – just find people who want to apply analytics to an important business problem. Or hire a consultant or contractor to help. Show how the results can add value to the organization, and you’ll be on your way. Eventually you will need to hire talent to grow your analytics capabilities, and our research and skills evaluation tools can help. Analytics is a journey, so why not start now.
Figure 2: Investments in HR Analytics
Source: Harvard Business Review Analytics Services and Visier, 2015.