The "People Lie, Numbers Don't" Approach to HR Analytics

SUMEET VARGHESE, SPHR, SHRM-SCP

A few workshops and a couple of speaking engagements later, I find
it immoral not to update what I have written earlier on the marriage
between HR Analytics and Big Data.
So here goes:
1. What is the future of Datafication in HR? Does HR already
have a lot of Data?
The idea that Data (of the wide and "wild" variety) is required to run
any form of Analytics (Big or Small) has not really caught on with
"some" HR professionals, atleast the ones I have spoken to. When I
say "some" you may take it to mean "many", since I always keep
statistical sampling requirements in mind whenever I strike a
conversation with anyone in HR (a "few' therefore might just
represent the "many" out there, If I am right about my sampling).
This means that when I speak to you, I always consider you first as
part of an important data-set - either by virtue of your title, your
experience in the HR function or your HR caste/"gotra" (XLRI, TISS,
IIM and so on). I know you may not like this statistical approach to
meeting and conversing with people selectively and treating them
as nothing more than "samples", but trust me, this approach is not
as demeaning as the kind of classificatory or analytical exercises
you perform by asking me which state I am from, which religion I
practice or whether I love Modi as much as you do or not. You see
we are always collecting data from each other, whether others like it
or not, but what we do with that data in HR is something I will
reserve for another post some other day. For the moment though,
let me clarify: HR Departments are caught in a position where they
may have too much of data and very poor analytics capabilities to
leverage the data or strong analytics capabilities but hardly any
worthwhile data to mine for insights. Frankly, I have no clue which
one is better!
Anyways, the sad/good news is that we need to sort out many
serious data related issues before we can discuss the extent to
which our neighbors in Marketing, Customer Service, Finance and
Operations use Big Data Analytics:
2. Is the Data we capture of any value at all? If it is not
valuable today, will it be valuable tomorrow?
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Unfortunately, no one has an answer. In one case, I asked a group of

HR professionals whether we should track the number of loo breaks
that senior executives took during a workshop and whether it would
serve any purpose. Obviously, there were blank stares. My question
of course wasn't pointless. The loo like the office water cooler and
the cofee/tea vending machine points in an organization is as much
a space for exchanging workshop feedback as it is for updating each
other on some juicy company gossip. While this may be a small
unwanted detail to be avoided by the HR professional it might
certainly be of interest to a Data Scientist, assuming it can offer
some interesting clues - Elementary, my dear HR Professional,
Elementary! Strangely, with a little bit of luck I was able to work out
a correlation (not causation) between the pathetic condition of the
loos used by the top management at one firm and the MD's
constant refrain that the organization lacked "ownership". In fact,
nobody (and this included the organization's top brass) bothered to
complain about the stink because they thought it wasn't "their job".
3. Should the Data we capture be of the same type or of
different types? Aren't we folks more qualitative rather
than quantitative?
Frankly, HR professionals must closely study the kind of work being
done by their Marketing and Customer Service Analytics teams to
figure out that Big Data Tools have evolved to a point where they
rarely ever care a byte if your data is structured and/or
unstructured. So, if you have an employee's leave records in XL, the
poor unsuspecting chap's FB Posts and Tweets for a full year in
Word, the person's performance appraisal history in PDF, and his/her
Compensation Data in any format that your ERP spits out, some
meaningful analytics can still be derived even if this employee
record is a gibberish amalgamation of data. For instance some
recruiters have long studied behavior patterns of candidates before,
during and after the various stages of a screening process that they
have been subjected to. Thanks to these studies we now know that
if you handle a particular stage of the recruitment process poorly,
candidates are two times or three times more likely to badmouth the
company's products and services on social media. Obviously, in this
case process feedback (quantitative and qualitative data) at each
stage of the screening cycle has been correlated with social media
behavior (qualitative data) of the candidates.

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4. Why should we capture Data?

Asking this question (considering the order in which it appears) is a
bit like placing the cart before the horse (line managers will vouch
this is precisely the image of HR they have). Unfortunately, many of
us in the HR fraternity have fallen in love with the practice of
hunting for data only when businesses want it. Also, quite
understandably, businesses don't explain why they want the data?
They know they can do the analytics themselves because we
haven't been able to figure out why businesses ask for specific types
of data in the first place. At some workshops, consultants have
asked me why clients look for specific data to be pulled out from
either an ERP and/or freely floating electronic and physical folders
containing all types of files (some including data captured on
papyrus - I am mildly exaggerating, here). My answer: that's just
their way of checking whether we are busy or not.
5. What kind of new/niche Analytics are we going to see in
the near or far future?
A. People Models
We all know Google has done some heavy number crunching over
quite so many years to figure out 8 attributes they would love to see
in Googlers who manage other Googlers (please do read the HBS
Case Study: Google's Project Oxygen) and that this model feeds
their recruitment and succession planning processes. Its quite
possible this people model might be revised in the next 10 years as
new challenges emerge with the business and the model (not
necessarily in that order). I remember studying Van der Waal's
equation in school - the final derivation of the equation, which
obviously had more variables than the one initially proposed, was
developed to fit the "reality" out there because tests/experiments
revealed the equation had not quite nailed it. If People Models are
"work in progress", People Analytics Departments can rub shoulders
with their scientific peers - if not, such models run the risk of being
exposed by a Copernican revolution (which obviously would happen
on the business side first!). We do know for a fact that the
famed/notorious 25 layered (rounds) screening process (possibly,
state-of-the-art at that point in time) at Google gave way to a 4
layered (rounds) screening process partly because business
managers wanted "good" people in "quickly". I am assuming, Van
der Waal was under no such pressure.
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B. Operational Experiments
Google did a great job of experimenting with plate size to figure out
an optimal shape that could meet its target of kicking employees
back into shape (guilt and shame worked powerfully to reduce the
number of trips employees made to fill a small plate) and help them
reduce their calorie intake. I have seen such experiments to control
wastage of food during lunch breaks. At one manufacturing firm, the
HR Department set up a Scoreboard to show how many kilos of food
was wasted the day before and so on. Obviously, such loud displays
helped control the menace to an extent. At another place, a young
engineer decided to stick graphic photos of poor children dying of
hunger right next to the serving area. Consequently, people got the
message and while some folks attributed their loss of appetite to the
pictures some said it made them more sensitive about the quantity
of food they loaded on their plates. Unlike the operational
experiments Google undertook, the examples I cite may not have
been the result of any meticulous planning, rigorous measurement
or even continuous experimentation. At the same time, I cannot
help but point out that HR is expected to change employee behavior
in numerous ways for a variety of reasons. That, to say the least, is
exactly what HR is expected to do (if we hear our Line Managers
correctly). Therefore, If earlier, HR did not have the tools to study,
analyze and mold employee behavior, thanks to Big Data Analytics
it now has a wide and bewildering array of tools that have the
potential to predict and regulate employee behavior, on a mass
scale.
While most of the examples here pertain to food, I am hopeful that
Operational Experiments in HR will extend to other more promising
areas of employee experience as well. I remember the case of a
"desi" (no HR Degree / no Strategic HR Experience) HR Head who
was asked to hire a Costing Manager. The company he works for has
a lone manufacturing unit outside Delhi. Once the Costing Manager
was on board, the company realized he had no job since he needed
data on work in progress - timely data on finished and unfinished
goods and inventory, almost on a daily basis. As the company did
not have an MIS or any practice of tracking anything remotely called
" operational and production data", the HR Head secured permission
from the MD to circulate chits of paper to collect such data from the
company's 300 odd employees (all semi-skilled) at the end of each
working day. In exchange for 10 rupees every day, each employee
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was asked to accurately mention on the chit the quantum of stock

they were sitting on. The scheme went down well with the workers
and the Costing Manager discovered he had enough and more data
to occupy himself for a full year. The MD was so pleased, he decided
to increase the amount to Rs. 20 per day. If a Desi MIS can be
generated on the fly through an operational experiment, I am sure
HR can conduct many experiments to help businesses unlock value
from Data.
C. Dashboards and Visualization
For HR Departments that continue to labor with PowerPoint and XL,
software like Tableau and Sisense (not that I am in love with these)
can appear to be the proverbial oasis in a desert formed by data.
They can make data analytics visually stunning and beautiful and
for a change, even make business leaders fall in love with HR.
However, these are low hanging fruits on a long journey. The
primary objective of an HR Analytics Department cannot be the
creation and transmission of Dashboards and Data Visualization although these can greatly help Line Managers to arrive at their own
inferences and conclusions, especially where they doubt HR to offer
some stellar insights.
D. HR Metrics
Dashboards are made up of various kinds of metrics. Thanks to the
"proliferate or perish" treaty that HR Professionals became
signatories to sometime in the past decade, various types of HR
Metrics (in the order of 1000s) are available today with leading ERP
vendors. Someone recently claimed they have developed 3000+ HR
metrics to track - now that's taking this proliferation business a bit
too far. Unfortunately businesses don't share HR's love of metrics.
Moreover, what irks them the most are the totally different ways in
which teams within the same organization measure the same
metric. Recruitment alone throws up various ways to measure an
important metric like "time to hire" depending on how exactly you
identify the base line. Worried probably by the confusing signals the
HR fraternity was sending out to the business community, SHRM
instituted standard ways of measuring some common metrics like
Cost of Hire and so on. However, I really wonder how these
standards can be applied across geographies or even industries.

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6. What kind of skill-sets will HR professionals of the future

need thanks to Big Data?
If Big Data Analytics is taken to its logical conclusion by "illogical"
(I'll explain this in a while) Departments (Whether, they be IT or
Operations or even HR), HR professionals won't be around and the
best part, HR skills won't be required. I and a senior friend facilitated
a workshop recently for a group of finance professionals. Everything
from our travel and stay onwards to getting the participants to the
venue from various regions was seamlessly managed by the Finance
team. We were personally shocked (truth be told, we had mixed
feelings and didn't know whether to laugh or cry) to not find a single
HR professional play a role anywhere from need identification to
vendor shortlisting and screening to trainee coordination to venue
booking to feedback collection. When we left, the chaps said they
have more work lined up for us - just that we would have to re-title
the entire intervention to avoid detection by the company's HR
Department and to prevent generating the impression that Finance
is stepping into HR territory. Already, many traditional HR processes
(requiring what was traditionally termed "HR skill-sets") are either
being outsourced or perhaps (in the case I recounted) taken over by
line functions. Now if the rest (which is not much - though some
serious-minded folks might give it some meat and call it "strategy"
or "business partnering" or "talent management") is to be carefully
considered, automation will slowly catch up. Google's recruitment
algorithms have done away with the need to have a hiring manager
for some positions. At the same time its retention algorithms help it
to predict who is likely to leave. While I do not immediately foresee
job-destroying algorithms to entirely replace a generation of HR
professionals, I am hoping a new breed of HR professionals with
algorithm-dismissing/refining skills will be able to find their feet in
the Big Data landscape. It is quite possible, that the HR Professional
of the future will be more analytical, a wee bit statistical, certainly
programming friendly as well as a domain expert having a more
integrated view of HR.
7. Whither Psychometric Testing?
Some time back a well-known Psychometric Testing company that
offers various types of IT platforms to conduct millions of tests
online came up with an exceptional (and I must add "sensational")
claim about the poor quality of sales "talent" in leading B-Schools in
India. They claimed they had used tests that were rigorously
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developed. As an old hand at psychometric testing, I knew more

than to believe such claims. Interestingly, companies the world over
are looking to IT to bring them platforms that "shorten" the process
of screening thousands. I don't care, a gentleman told me once,
what you do with my people, as long as there are numbers and
reports. I am hopeful Big Data Analytics will take on these
charlatans and their acolytes in interesting ways. There is already
encouraging research to show that your FB behavior, if analyzed
well, can successfully predict your Big 5 personality traits - so the
good news is we may not need psychometric tests in the future. But
the sad news is our data footprints will be stored somewhere to be
analyzed someday. I won't be surprised if my Google Calendar and
Map are combined and analyzed someday (they already have, by
the way) to tell you how I handle projects (how many meetings),
travel, stay, and money (based on bookings data probably
integrated from some other source). However, I must concede that
those data-sets along with others should provide more data points
to take a judicious people decision than simple answers to a set of
questions hosted on an IT platform designed by an IT team that
hasn't the faintest understanding of scoring and interpretation.
8. What are some common "heuristics" Line Managers are
known to use for hiring/firing and everything in between?
Across organizations of all types, you will bump across various types
of people heuristics (unexamined People Models) at work - rules of
thumb that may have served line managers well and which play a
very large role in several people decisions at a firm (contrary to
what we HR professionals think). This is the human version of Big
Data Analytics at work, perhaps! From among the few that I have
been able to identify, I find the one involving a senior finance
manager at a large Indian firm, quite interesting. This gentleman
hires juniors who meet one criteria: they should have cleared their
CA (Chartered Accountancy qualifying exams) in the 3rd or 4th
attempt. The way he sees it, such candidates are ready to stretch
more than those who have cleared it in the first attempt. Now,
anyone who has taken the exam thrice will confess that the pain of
preparing for the exam three times over and clearing it can be
excruciating indeed. Whether that preparation makes them more
industrious and persevering (atleast, in the eyes of this finance
professional) is a matter of debate for statisticians and behaviorists
alike. While there is no independent study out there that can
establish whether these 3-timers are more persevering and
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industrious than the first-timers, our finance manager continues to

operate on the basis of this heuristic and what is more, over time,
has been able to build and retain a team of productive professionals
using the same logic.
9. How can HR Analytics explore such "heuristics" that drive
people decisions in a firm?
Every people heuristic is a fit subject of research for a budding HR
Analytics professional. Armed with statistical tools, behavioral
analysis models and an understanding of how people form
perceptions about groups and individuals, an HR Analytics
Department should statistically examine those "notions" or
"assumptions" about people that might be actually preventing
organizations from attracting, hiring, promoting and retaining
talented people.
One gentleman at a leading telecom company confessed using a
particular heuristic to screen out candidates: he would ask the
candidate to share his/her contact numbers during the interview. If
the candidate used the services of a rival telecom operator (as
would be evident from the number he/she provided), he/she would
be dismissed from the interview. My friend's logic (based obviously
on years of experience - Big Data Analytics) for the summary
rejection is based on the idea that such individuals are never loyal
to the brands they work for. If they were, they would avail their
company's services and not that of a rival. In his scheme of things,
people lied but the numbers didn't. If our Big Data Analytics
program operates on a similar premise: people lie but numbers
don't, we risk repeating the same mistake that my friend from the
telecom sector makes. You see - my friend never asks where the
candidate lives and more importantly, whether this place has
adequate network coverage or not or whether the area in which the
candidate usually operates has a good number of telecom towers
for his customers or not.

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