Erik van Vulpen is the founder of Analytics in HR and a recognized expert in human resources analytics. We had a chance to speak with Erik about how HR decisions are increasingly becoming data-driven.
Tell us a bit about your background. Why did you decide to create Analytics in HR?
We created Analytics in HR because we wanted to create a platform with reliable and practical information about HR analytics. There was a lot of talk about HR analytics in LinkedIn, but there was no dedicated platform for HR analytics.
In addition, we saw a lot of interest in more data-driven approaches to human resource management. A lot of companies have a very data-driven marketing and sales department. The HR analytics department is, however, lagging behind.
A lot of HR professionals want to know how to create accurate HR metrics and how to use these metrics in an HR report or HR dashboard. We help them to make human resource management more data-driven.
What are some “startling” discoveries that you’ve made using HR analytics that tend to invalidate some of the most widely-held HR beliefs?
There are quite a few. Did you know that algorithms make better recruitment decisions than human recruiters? We humans are very bad judges of character, and we’re even worse at predicting future performance.
In addition, it is hard to keep track of key HR areas without measuring them. As an HR professional, you might feel good about retention, but you can only see a small part of the organization. People analytics helps to avoid common biases that affect us all.
What types of elements tend to have the most negative impact on employee retention?
The first thing most people think about is compensation. However, the role of compensation is oftentimes overestimated. A lack of learning and development opportunities plays a much larger role, especially for younger workers.
Other factors like young age, stress, and bad leadership also greatly impact retention. We created an infographic about the most common drivers of turnover based on two meta-studies of the past 100 years of employee turnover research.
Name one change that most organizations can make immediately to lower the costs associated with absenteeism or sick leave.
It is hard to come up with an immediate fix. There are a lot of cultural and legal differences between countries that can make it easier or harder to stay at home. In addition, the private sector usually does a better job when compared to governmental organizations. The latter usually do good by actively combating absenteeism through interventions that help to get workers back to their desk ASAP.
One suggestion is to actively call employees within 24 hours of them falling ill. As a manager, it’s important to show empathy when you call employees; and when you actively facilitate workers to return to the workplace (even when it’s initially part-time), overall absenteeism is likely to lower.
What tangible benefits can a company reap from increasing diversity in the workplace?
Diversity is an important element for a lot of companies. More diverse workplaces often lead to more innovation, a more inclusive workplace, and better decision making.
According to a recent study by the McKinsey Global Institute (MGI), employee diversity is associated with better business results. Gender-diverse companies are more likely to perform 15% better and ethnically-diverse companies are more likely to perform 35% better.
These benefits are huge. The big question is always whether these relationships are causal or correlational. Do top-performing companies have more money available for fancy diversity programs, or does diversity really lead to better performance? That’s always the question.
If a company executive were to say to you, “I won’t subsidize continuing education for my employees, because our organization will never see any return on that investment,” how might you respond?
There’s a cartoon that is often shared by HR managers on LinkedIn with the CFO saying: “What if we train them and they leave?” The CEO then responds: “What if we don’t train them and they stay?” I think that says it all.
In addition, it is hard to retain young, high-potential employees without adequate training and development programs and opportunities. According to Gallup, 59% of millennials say opportunities to learn and grow are extremely important to them when applying for a job. I see it all around me: most millennials rate learning and growth opportunities as more important than pay.
What do you foresee for the future of HR analytics and its integration into companies’ conventional hiring practices?
The future of HR analytics is exciting. I think there will be a tremendous growth in the coming years in more data-driven approaches to HR. In addition, HR analytics will become the norm for large corporations and will integrate with the HR (data) department. This means that HR professionals need to become more data-savvy.
There are also a lot of exciting developments in enterprise analytics. I think that in a decade, HR analytics will be part of enterprise analytics. This doesn’t mean that HR analytics will become obsolete; it means that it will be done much more efficiently and professionally compared to how it’s being done now.
In regards to hiring, there are a lot of innovative software solutions that focus on making a smarter and better selection of applicants. By connecting someone’s performance one or two years down the line with specific educational and demographic characteristics, you can make a better applicant selection. These processes will become increasingly automated.
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