Peter Howes, vice president of SAP’s cloud arm SuccessFactors, claims that most companies have access only to aggregate information about their workforce, which in the main assumes that it is homogenous. He believes that aggregate information about workforces ranges from “useless to dangerous.”
He offered the example of companies which monitored their voluntary turnover rate, calculating it as an average for the entire firm. He said an aggregate of 12 per cent could well mask the fact that there were some groups of workers with churn rates of less than 3 per cent, while in some other groups one in four people could voluntarily be leaving an organisation each year.
Depending on who was staying and who was leaving, that could leave a company vulnerable.
“I believe analytics can and should be applied to the whole workforce,” said Mr Howes, although he acknowledged that there could be challenges for companies trying to apply such techniques in unionised workplaces.
He believes that although business could benefit from a much more granular understanding of their workforce, few human resources professionals are skilled in data analysis. “The really big constraint is the HR practitioners don’t have the capability to interpret this information,” he said.
In addition “as a profession they are very immature on how to integrate social data.” Instead most tried to manage their HR data using simple spreadsheets.
To date Mr Howes believed only about one in ten organisations had made much progress in terms of introducing business analytics to human resources. Locally NAB is a SuccessFactors customer as are several universities and government departments while internationally HSBC, Societe Generale and Starbucks all use the cloud based system.