Big data, described by some as the “new oil” fuelling the digital economy, is expanding the frontiers of innovation and productivity, but it is also helping HR specialists improve the talent management process.
Information and insights from analysing big data can now help with everything from hiring decisions to planning promotions and meeting training and development needs. When used well, it can reveal trends and patterns relating to human interactions and behaviour which, over time, can have a marked impact on business performance and forward strategies. However, in the HR context, it is also important to exercise a certain degree of caution.
“Data is only as good as the intelligence that can be collected from it and transformed into value,” says David Hope, Asia-Pacific president at Workday.
He notes, for example, that HR departments often deal with data stored in different formats in out-of-date systems still being used for things like performance evaluations and payroll. This inevitably makes it difficult to track and analyse available information in a coherent way. It shows too that data on its own counts for little. Like oil, it must be “refined” for a specific purpose otherwise HR professionals simply fail to reap any benefits.
“Without proper analysis, the promise and potential big data offers becomes little more than rubbish in, rubbish out,” Hope says.
What’s needed is a single repository where the relevant data can securely stored, easily accessed, and cross-referenced with a clear objective in mind. This may mean companies opt for a cloud-based solution able to host all their information related to recruitment, training, evaluations and more.
With such a resource, HR professionals can then make far better use of the relevant data as a tool to plan and execute talent management strategies. They can take steps to align hiring plans more closely with emerging business needs and more accurately identify candidates with the greatest likelihood of succeeding in specific roles.
After recruitment, analysis of big data can also help to personalise learning and development programmes, allowing staff to work towards their career goals and objectives more effectively. This has been shown to boost employee engagement and loyalty.
“At the end of the day, organisations that successfully place employees in the right job at the right time will enjoy better productivity and business outcomes,” Hope says.
Lancy Chui, senior vice president of Manpower Group Greater China, believes the use of big data allows HR practitioners to be more analytical and strategic when looking for “best fit” candidates. For example, the latest tools make it possible to quickly pre-scan databases of online resumes, employment records and social media profiles when considering possible hires. And smarter use of big data can also improve retention strategies, training programmes and incentive schemes.
“HR departments are now in a position to drive better performance and generate deeper engagement from their workforce,” Chui says.
Doing this may be easier for large organisations, but small and medium-sized enterprises (SMEs) can also find ways to benefit. A good place for them to start, Chui suggests, which is not too costly or complex, is a cloud-based “infrastructure as a service”, or IaaS solution. This allows small businesses to support a wide variety of HR-related functions including job postings, tracking applicants, payroll management and staff performance.
“With the right platform to build upon, SMEs can scale up when they need to,” Chui says.
According to Tracey Malcolm, global future of work leader at Willis Towers Watson, metrics derived from big data analytics are now a key enabler for employers looking to enhance overall levels of performance, motivation and engagement. The information can provide previously unavailable insights, letting the HR team explore different scenarios and correlate the findings.
“Data is only useful when it comes to life,” Malcolm says.
For example, she notes that data-backed modelling can help to explain why productively increases or decreases when a new manager is hired. And such methods can be applied to gain a better understanding of a wide range of other workplace situations, opening up all sorts of opportunities to improve human capital management.
In particular, the HR function can identify shifting demand for certain skills, spot changing needs within an industry, and then personalise training programmes. This might lead to recommending an increased recruitment budget, more external courses, greater use of educational websites, or setting up an in-house mentoring scheme. The end result, though, should mean employees have the skills and experience to do their current jobs effectively, to keep advancing, and to adapt and adjust as necessary.
Malcolm notes that organisations can also leverage big data to examine and rethink how day-to-day work gets done. The results of such an exercise can be surprising and may lead to a broader redefining of roles and responsibilities to boost all-round efficiency or meet changing market needs.
But for this to happen, HR teams must be adept not just at interpreting the available data, but also at seeing the implications and explaining them to management and staff. And, in parallel, they must appreciate the responsibilities they bear for protecting employees' personal data and ensuring systems are secure.
This entails awareness of and compliance with local and international laws, including the General Data Protection Regulation (GDPR), which came into effect in May this year. It applies to any organisation worldwide which collects and processes the personal data of individuals, or “data subjects”, located in the European Union (EU).
So, if a Hong Kong-based company has operations in the EU, or is part of a multinational which conducts business there, employee information such as remuneration details could be subject to GDPR rules. Any infringement can potentially lead to sanctions and fines of up to 20 million euros or 4 per cent of the company’s worldwide turnover, whichever is higher. And the regulations apply to all data held – past, present and future. Therefore, experts familiar with the GDPR and similar laws recommend that employers check and monitor their procedures to ensure everything is fully compliant.
Pattie Walsh, a partner at law firm Bird & Bird, suggests a good starting point is to conduct a thorough HR data audit.
“In light of the broad reach of the GDPR in Hong Kong, businesses should carefully assess which employee-related functions and operations are affected,” Walsh says.
The review should cover in-house practices for collecting personal information, privacy policies, and recognition of enhanced rights for individuals since the GDPR was enacted.
Stephanie Wong, an associate at Bird & Bird, believes the changes in the EU may have an impact on local legislation in Hong Kong, with the possible introduction of a new category of sensitive personal data and move towards more accountability.
“Businesses should be vigilant and make sure they are aware of any updates,” Wong says.
