watson goes hr

04/11/2011

by anne lueneburger

When we work with corporate clients, we often collaborate with HR teams.  An increasingly prominent trend we have noticed in these engagements is the use of technology to foster a fresh and transformative dialogue about the link between people and performance. “Fresh” because it helps HR leaders demonstrate the impact of their work; “transformative” because it elevates them as thought partners and members of senior-management.

Earlier this month, in an engagement review of a client in the food industry, the HR leader spontaneously responded to a question about the relevance of a particular competence (in this case the ability to deal with ambiguity) by saying: “Let’s ask Watson” and consulting with her relational data base.  We were stunned and delighted.

McKinsey just issued a ‘Using People Data to Create Value‘ report that explores this trend, concluding that organizations that get the most value from investing in HR analytics rely on combinations of four steps:

*First, they rigorously focus HR on business priorities.

*Second, they build on the existing capabilities of the HR team and promote the integration of analytical resources wherever possible.

*At the same time – third – they go beyond traditional HR resources and drive closer collaboration with business leaders.

*Fourth, they ensure that these practices become part of the every day HR processes.

The attached study explains each of these steps in detail. Interestingly, the article describes how the Bon-Ton chain that consists of more than 280 department stores in the United States uses its data. Specifically, Bon-Ton “leveraged its data to identify attributes that made cosmetics sales reps successful. Now it screens potential reps using a test of cognitive ability, situational judgment, initiative taking, and other relevant traits. Those who score in the top half tend to sell 10 percent more product than the others and tend to like their work more. Since 2008, the chain has seen an increase of $1,400 in sales per representative and 25 per-cent lower turnover among them.”

What is fascinating about these new HR analytics – what makes them powerful – is that they begin to first identify what individual traits make for commercial success and then seek for corresponding strengths in new employees: the essence of a work force that operates north of neutral.

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