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HR is failing to use people analytics tools, new report says

Human resource departments fail to use people analytics tools effectively, a new global study concludes. The findings were called a 'stunning regression' defying expectations.

A new global survey found a "stunning regression" in the ability of firms to use people analytics tools. Instead of improving, success rates are declining, according to a just released report by Development Dimensions International, The Conference Board and EYGM.

Despite the "steady drumbeat" and energy around people analytics tools at conferences, in academia and in articles, many HR departments are struggling to use the technology, the report found.

"Success rates declined over the past three years for every type of analytics we compared," according to the report, "Global Leadership Forecast 2018." This survey, which is completed every three years, gathered its data from nearly 26,000 business leaders globally and 2,550 HR professionals, including 1,000 C-level executives and 10,000 high-potential employees.

"We were certain that we were going to find positive movement in analytics," said Evan Sinar, the chief scientist and vice president at Development Dimensions International (DDI), based in Bridgeville, Pa., in an interview, but "we saw the opposite in many cases." Sinar, who authored the report's section on people analytics, has a doctorate in industrial and organizational psychology and heads DDI's Center for Analytics and Behavioral Research. DDI is a global HR consulting firm, and The Conference Board is a business membership and research association.

Failure is the most likely outcome

The report found while "companies attempted analytics more often than in 2014, these efforts were more likely to fail than to succeed." On average, only 21% of the firms, for instance, succeeded in using people analytics tools in traditional forms of benchmarking. It was less for emerging forms of analytics, such as leadership planning models.

I think it might be a case of HR just simply not keeping up with the advances in technology.
Evan Sinarchief scientist and vice president at DDI

It found only 19% of organizations have successfully used people analytics tools to forecast future talent needs -- a 4% decrease from three years ago. Ditto for leadership planning models, as only 18% were successful in that planning -- a decline of 5%. The report found declines across the board.

Sinar cited two problems. Researchers are seeing evidence of a need for more analytics skills in HR departments. Another problem may be the quality of the data fed into people analytics tools.

"I think it might be a case of HR just simply not keeping up with the advances in technology," Sinar said.

Majority struggle with people analytics tools

The firms that are succeeding have "a stronger bench of leaders," and they also tend to be more financially successful, Sinar said. "But the vast majority of HR professionals and organizations are still struggling with it."

HR data can pose "massive challenges" in organizing and cleaning it, Sinar said.

"The tools are only as good as the data you put into the tools," Sinar said. "If HR isn't building a broader discipline about getting data, getting the right data, getting clean data, then no tool is going to solve that," he said.

Josh Bersin, Bersin by DeloitteJosh Bersin

Josh Bersin, the founder and principal of Bersin by Deloitte, citing findings from a new study, found about 70% of companies are now investing heavily in people analytics, building more integrated systems to capture more people-related data and are seeing some type of return.

Two to three years ago, this was still experimental, and firms were sometimes running analyses that weren't necessarily worth the money, he said.

Bersin is more upbeat about the value firms are getting from people analytics tools.

Not enough success stories?

But what the Deloitte and Global Leadership studies are reporting may be affected by the range of firms they measure.

Bersin said the Deloitte study is more focused on firms with at least 5,000 employees. The Global Leadership report showed a broader range of firms in its survey, above and below the Deloitte threshold.  

"There are a lot of positive stories of people that have learned incredibly important things about their companies," Bersin said.

In Sinar's view, "there are success stories -- far fewer than we would like there to be."

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