There’s much wisdom in the above saying, which has been attributed to Sherlock Holmes from that brilliant story “Adventure of the Copper Beeches”, written by Sir Arthur Conan Doyle and first published in the Strand Magazine in June 1892.
Flash forward to Circa 2015, a new age of strategic recruitment and human resource management has dawned upon us, yet this 19th century Sherlock Holmes speak continues to be germane to the recent digital data explosion of our times. Simply put, from a recruiting perspective, with data ( big or small) the recruiting function can measure, and hence know, radically more about its process internals, and directly translate that knowledge into improved decision making and performance. Put another way it aims to take the guesswork, gut feel and prejudice out of hiring, promotion & career planning decisions.
Data or Big Data if you may have it is the new clay for building the blocks of a high impact recruiting function. For much of the last few years, there was talk of just what big data is, how it would affect talent acquisition and talent management, and how to work with the constant and much larger flow of data slated to have an impact on the Industry. Data, according to most major analysts, is all set to change everything about what we do and why we do it in the near future. Nobody knows for certain what the future holds, but as Neil Griffiths, wrote in his introductory note in a seminal white paper by Dave Mendoza, “It seems the coming years will see the rise of what we call ‘Futurecasting’ – the ability to interrogate big data generated by the increasingly ‘social’ digital world and to begin basing hiring strategies and tactics on the new insights that are created.”
The business world today is grappling with a deluge of data points from myriad sources. This data comes from everywhere: browsers, posts to social media sites, digital pictures and videos, purchase transaction records, tablets and cell phone to name a few. All this data supposedly offers unprecedented awareness of people’s actions and attitudes. Every day, we create 2.5 quintillion bytes of data – so much that 90% of the data in the world today has been created in the last two years alone and the number is doubling every 40 months or so.
Given this ocean of data, the prevailing wisdom is centered round the great competitive advantages big data potentially offers because it allows companies to make better predictions and smarter decisions. We can target more effective interventions, and can do so in areas that so far have been dominated by gut and intuition rather than by data and rigor. The potential power of this data-driven approach has its champions. “This is absolutely the way forward,” says Peter Cappelli, director of the Center for Human Resources at the Wharton School of the University of Pennsylvania. “Most companies have been flying completely blind.”
Making the Leap to Data – Driven Recruiting
While Analytics and Big Data have created quite a stir in the marketplace, the reality, as a recent Bersin by Deloitte research study findings – shown below- revealed is that most HR organizations fall well short of mastering these capabilities.
The study revealed that a staggering 86% of the surveyed organizations focused primarily on reporting, just 10% had taken the next step towards advanced analytics – helping business leaders solve their talent challenges through data analysis and a mere 4 % of the surveyed organizations were using predictive analytics to predict future talent outcomes. The statistics brings to the fore key issues and challenges organizations are grappling with in their efforts to build a successful data-centric recruiting function.
Data cannot stand in for vision or human judgement. On the contrary, being “big data-driven” requires more qualified human judgment than cloud-enabled machine learning. It moves the efficacy around more sound, more objective, and better decision making. The key to success here is an understanding that (big) data is not about subordinating managerial decisions to automated algorithms, but deciding what kinds of data should enhance or transform user hiring experience.
This scenario necessitates organizations to confront a new philosophy about decision making. For instance, hiring decisions are an interplay of multiple variables, the weighing and interaction of which are rarely obvious. Behavior and achievement are contextually driven, and motivation may or may not change with time. The selection path resembles more like the flight of a bumblebee than a predictable, linear hiring pattern and requires we bring in a nuanced understanding of the process combining the science of analytics with the art of intuition.
This behooves organizations to move away from “What do we think?” approach to “What do we know?” and an enlightened leadership team is key to enabling this culture shift, where senior executives are willing to override their own intuition in favor of reasoning. Fast Company has a great quote from Jeff Bezos: “The great thing about fact-based decisions is that they overrule the hierarchy.” The most junior person in the company can win an argument with the most senior person with a fact-based decision.
The geeks have arrived in HR, avers noted industry analyst and consultant, Josh Bersin. “Statisticians, mathematicians, and engineers have entered the people analytics space. More frequently, big data skills are appearing in job postings for recruiters, HR generalists, comp and benefit specialists, and trainers. ”The advent of the data era means that analyzing large, messy, structured, unstructured data is going to be integral to a recruiter’s work. For organization’s today, more effectively using talent data is a key component of their optimization efforts, one that seeks to improve the function’s role as a true business partner. Companies at the forefront of the data revolution are increasingly integrating workforce and workforce and financial data to align talent investments with business results.
The recruiting function of the future will often be called upon to create innovative data-based recruiting products and services and more proactively develop data-driven insights used to predict turnover, reduce new hire failure rates, and manage persistent poor performers.To thrive in this world, many will require additional skills. An ingenuity to see the (data) picture: one might call this “data literacy”: competence in finding, manipulating, managing, and interpreting data, including not just numbers but also text and images.
Visualization skills are important here, one can have all the data analysis faculty available, but unless one is able to present a coherent picture to the stakeholders, and demonstrate how it will help to improve performance and drive success, there is little value attached. The real win for business comes when the recruiter combines the artistry of wooing top talent in the market with the data acumen to influence the organization’s hiring strategy. The best hiring solutions arise from a willingness to blend art with science, ideas with data, and instinct with analysis.
In the movie “The Matrix” there’s a scene where Laurence Fishburne says to Keanu Reeves, “The Matrix is everywhere. It is all around us. Even now, in this very room. You can see it when you look out your window or when you turn on your television. You can feel it when you go to work … when you go to church … when you pay your taxes.”
The “Matrix” underscores how sentient our world today has become. With cameras, smartphones, microphones, and other smart devices the human race is giving inanimate objects everywhere eyes, ears, and skin. And with all this observation, we are creating massive layers of data and information deluge every day.
But for all this data ubiquity, data is the lowest level of abstraction from which information is derived, and its ability to enable informed decision making can only be brought to fruition if data aka ‘meaningful data’ is analyzed and interpreted in the right business context.There is a certain danger in not truly understanding what it means to be data-driven and leveraging on the acquired knowledge. Big Data has become a catchall phrase today and despite the much-lauded buzz around data, metrics, and analytics there is little appreciation around the import and value of these terms and most importantly, how they go about creating the background for the right business case. An understanding of this hierarchy of knowledge can go a long way in ensuring consistency in the evaluation and improvement process of our talent acquisition strategy and its consequent bottom-line impact.
So what is the difference? ( And why we should care!)
Metrics and Analytics, as the exhibit below illustrates, are generally fueled by the same data sources, which entwine the two and can be the root cause of confusion sometimes seen against their independent roles.
Metrics, as the above exhibit illustrates, are numerical information points that encompass both financial and non-financial dimensions:
- Qualitative measures : e.g. Cost to Hire, Time-to-Fill, Cost of Vacancy
- Quantitative measure: e.g. Quality of Hire (QoH), Hiring Manager Satisfaction, Employer Brand Strength
Although both are different, the common element is the use of data and this is where the lines between metrics and analytics are often blurred, especially as the real value in metrics is seen when they’re using data to feed into decision-making processes. Analytics are the highest level of understanding. They help provide the answers to the many questions that metrics create:
With analytics, a greater understanding can be developed around the metrics being measured, by providing insight and context, which in turn, can be used to truly optimize the recruiting function and boost its strategic impact. Turning these insights into value is the next and probably the biggest hurdle to achieving better use of data, metrics, and predictive analysis by HR and talent acquisition professionals. A fact underscored by a research study by Harvard Business Review Analytic Services. An excerpt from this HBR survey is presented below:
Creating the right interplay between data, metrics and analytics is critical to ensuring a clear alignment to measurable business outcomes. It is essentially about seeking to answer, “What value matters most, and what marriage of data and algorithms gets us there?”
There are many dimensions to technology. To build a data-driven recruiting function, the technology assets must be in step with the recruitment strategy. The more out-of-sync recruitment and technology are, the more debilitating the impact on the organization’s agility to hire top talent. Investments in technology need to focus on the sources of data, how data is moved around the organization, and how it is handled, either through transactions, reporting, or analytics. The analysis of large data sets (big data) and unstructured data requires new and different technology than the organization probably has today. Even if the organization has already invested in new technologies, management has to figure out how it becomes central to the organization — not just serving as an incubation environment.
The technologies for data enabled recruiting are still fairly new and in some cases exotic. It’s too easy to mistake correlation for causation and to find misleading patterns in the data. The cultural challenges are enormous, and, of course, privacy concerns are only going to become more significant. But the underlying trends, both in the technology and in the business payoff, are unmistakable.The key challenge here is in knowing how to leverage technology in order to marry the right data sets with complex algorithms and optimize on the value proposition.
The above challenges, notwithstanding, the evidence is clear: Data -driven and a scientific approach to recruiting is the way forward. There is a growing realization among the recruiting fraternity at large that overhead functions will not be exempt from the unstoppable business trend toward data enabled decision-making. As the tools and philosophies of big data spread, they will change long-standing ideas about the value of experience, the nature of expertise, and the overall practices in recruiting. Big Data innovation presents talent acquisition with a unique opportunity to raise its profile as a strategic business partner. Strategic sourcing, improved workforce planning, building critical talent pipelines, are just few of the yet many un-researched possibilities presented by applying Big Data principles to the recruitment process.
The Industry is in consensus that the data interplay will change the nuances of recruiting as we understand now, but many are not sure how. The challenges are enormous, yet it is a transition that recruiting must engage with today. The scenario brings to mind the Chinese curse:“May you (recruitment) live in interesting times.”