HR Analytics: Gaining a Foothold in Europe
Although HR analytics has long been a hot topic among HR professionals and some CXOs, hype has far exceeded reality. However, recent global economic pressures and the increasing availability of enabling tools have coalesced to transform the concept of HR analytics from science fiction to nonfiction. In light of these changes and the still nascent nature of the practice, Everest Group undertook a detailed qualitative study to understand the current state – and potential opportunity – of HR analytics, particularly in Europe, where HR, among global regions, is the most strategic and powerful.
HR analytics adoption is driven by a variety of both push- and pull-base factors.
- Emergence of HR as a strategic differentiator, versus necessary evil
- Increasing demand for better, more efficient, use of human resources
- The evolving talent scenario: millennials, increasing use of high-skilled contingent talent, etc.
- The demand for fact-based, as opposed to intuition-based, decision-making
- Advances in the science, tools, and technology behind analytics
- Information availability
- Emerging examples of successful use of HR analytics
To no one’s surprise, the HR analytics journey is not without its challenges. Chief among them is the very mindset that has challenged HR leaders for years: the view that HR is a soft, people-oriented practice, not a numbers-driven, analytical one. The implementation of HR analytics is further hampered by cost and benefits challenges, essentially a classic chicken-and-egg dilemma: nobody wants to spend money on an unproven concept, but you can’t prove the concept if you don’t have the money to test it.
An effective solution forward-thinking HR organizations have implemented is what we call the "HR analytics spiral". This process involves identifying a small project that can be completed with very little seed money and existing internal resources from which the HR team creates a pilot exercise. Thus, the HR team demonstrates the accrued benefits, gaining much-needed buy-in for future projects, leading to more money for larger follow-up exercises, with higher-impact benefits, and on and on, in an ever-growing spiral of investment, buy-in, and benefit.
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While it is still early days in the maturation of HR analytics in Europe, there is increasing evidence of success, helping to transition the concept from the science fiction category to nonfiction business.
See also: BPaaS and HR Analytics:
For details on the results of our research, including additional analysis on HR analytics stakeholders, how to inculcate a culture of HR analytics, structuring HR analytics teams, and the types of HR analytics currently being undertaken, please see Everest Group’s recent report, HR Analytics in Europe: A Patchwork Landscape.