BSP^pw !-7<i(i?'*.ipa*fiF-%!

COVER STORY
The Benefits
Daunting t o
acquire and
interpret but
rich in rewards,
'big d a t a ' i s the
latest chapter
in workforce
analytics.
By Bill Roberts
H
ave you wondered
how HR can use "big
data"? The following
examples illustrate its potential:
Defense Acquisition Uni-
versity, which trains thousands
of military and civilian profes-
sionals in defense acquisition,
logistics and technology, ana-
lyzes internal and external data
to determine the least expensive
places to conduct classroom
training based on total cost.
Variables include room cost,
instructor salary and travel,
expected attendance, and travel
costs for students.
Silicon Valley-based Juni-
per Networks, which develops
network infrastructure prod-
ucts, uses Linkedin (the career-
oriented social networking
site) to track and analyze the
skills, knowledge, experience
and career paths of employees.
October 2013 HR Magazine 21
180* 11 iiofto io 11 n1111 ieoeoto4otosoi 1 sosoco' ioo ' 10000 s 100 i i i ioo 11 i soi n 11
COVER ST(
former employees and potential
employees.
Before FedEx Corp. acquires a
company, its HR department ana-
lyzes aggregate employee data from the
acquisition target, including employee
engagement survey results, and com-
pares them with FedEx data. "Our anal-
ysis provides management with another
data point before they make their deci-
sion," says Bob Bennett, chief learning
officer and vice president of HR.
Big data is the latest chapter in the
story of data-driven HR. The story
began in the 1970s with the creation of
the first human capital metrics, contin-
ued on to benchmarks and dashboards,
and advanced in the past decade to
more-predictive workforce analytics.
Big data represents a big leap forward,
however, and most HR organizations
are still in the early stages of applying
metrics.
"I try not to use the term 'big data.' It
scares people away," Bennett says. "The
important message is that now, more
than ever, deriving value from data is
critical in the business environment. HR
has an important role because it has to
use data to drive employee behaviors,
making sure those behaviors are mea-
sured, monitored and shaped to achieve
business goals."
Needle and Haystack
Big data is not just the buzzword du
jour; it is a new reality defined by new
sources of data. It applies methods and
tools across the enterprise, especially
in marketing, customer service, prod-
uct development and HR. The goal is
to make human capital decisions based
on data, not intuition or conventional
wisdom. Challenges include capturing
the data, finding and using appropriate
analytical tools, and putting the data to
good use.
If anything, the term "big data"
understates the tsunami of data avail-
able from transactional systems,
relational databases and business
Mi1090110
)0t100f01100
jotmtotm
I H1 MI 1 1 1 M
1100f OtOl 10OftO@O1 ISOSOtO Y11111001190': 11100S010011M MeoeO 1100 V
1H1110011111180f0(001000l!0! 11100 180 M
11t1O11WiO
coaoiioi
011
oo
uto
iOAOtO 0 1 H1 0 1 1 M1 1
sotoeoeoimti
101111111111
1 lOOOOsOeOUM 11 ' 1 ' 190' 1
111111? 19060 tmsOeOi O
!1'190S0S000
I1M11I1 11
inio 11
I into 0
OSWO M
mi m
1111 M
111 M
#011 <1
1100
IMO HU M
t ot i 0*000
0 totm
1 0 0 0 0 0 0
11t10000
I1#O
smo
11
00
11
tio
ton
oto
190
'111
0
1
0
1
'1 oso
90
00
o
90
11
e o
111111
11
no
1
O
o
1
o
1
1
1
a
ao
11
1
o
11
o
o
o
o
1
OOIIO
1 0 0
0 o
1 o
o
11
10
1
1
t1
o
u o
iO
11
1
180
301150
O 111
031S0
o 1
50 JO
- o
1
o
11
o
o
1
00
11
o
tf O
1
Besides sheer volume, th e v ar iety of th e
information and th e v elocity w ith w h ich it
becomes available also fuel big d ata.
applications that are available from a
growing number of outside sources,
including e-mails, social media and
more. The amount of data businesses
have has increased because most infor-
mation is now digitized and comes from
many new sources, such as smartphones
and sensors embedded in furniture and
badges. EMC Corp., a data storage ven-
dor, estimates that the amount of world-
wide digital information doubles every
two years. Standard software tools and
databases are not designed to manage
that kind of deluge.
"We have access to more informa-
tion about people than ever, and it lets
us be more precise," says Bill McKinney,
vice president of talent and long-term
development at Thrivent Financial for
'^ ONLI NE RESOURCES
For more infor mation about analyzing "b ig
d ata" to g ain business insig h ts, see th e
online v er sion of th is ar ticle atv
or q/1013-biq-data.
Lutherans, a faith-based financial ser-
vices organization with 3,000 employ-
ees and 2,500 independent agents. "In
HR, we can find people we never knew
existed who might be interested in
working here. Big data is the haystack
and helps you find the needle."
Besides sheer volume, the variety of
the information and the velocity with
which it becomes available also fuel big
data.
The variety includes data sources
internal to HR and the enterprise as
well as external sources, such as salary
studies, industry benchmarks and work-
force demographics. Variety also refers
to structured and unstructured data,
each of which places different demands
on technology and users. Structured
data is the standard stuff of relational
databases, including HR information
systems (HRIS), accounting systems
and enterprise resource planning sys-
tems. Unstructured data covers an array
of free-form information, including
narrative answers on engagement sur-
veys, social media posts, blogs, wikis.
22 HR Magazine October 2013
COVER STORY
e-mails, and even images and videos
all of which require new technologies
for organization and analysis.
Velocity refers to the increase in
streaming data arriving in real time and
to the speed at which data must be eval-
uated and made actionable for business
value.
Data Integration
Of the three dimensions of big data,
variety presents the greatest challenge
toHR.
HR has two internal sources: data
it owns and data it collects from other
enterprise systems.
HR data comes from systems such as
payroll and HRIS. While HRIS and pay-
roll systems have seen an increase in data
volume, this by itself is not big data.
Sometimes an HRIS is a module in
an enterprise application suite, which
can make accessing data from other
modules relatively easy. But often an
HRIS stands alone, not linked to other
systems in or outside HR. Point solu-
tions have proliferated for talent man-
agement, recruiting, performance man-
agement, learning management and
other functions, adding to the challenge
of accessing and managing this rich data
vein.
Surveys by Josh Bersin, principal
and founder of Bersin by Deloitte, a tal-
ent management subsidiary of Deloitte
Consulting, have found that "the aver-
age large company has more than 10
HR applications and its core HR sys-
tem is over six years old," he wrote in
a recent blog post. "It takes effort and
energy to bring this data together and
make sense of it."
HR often needs a data mart to tie its
data together before subjecting it to ana-
lytics. A data mart is a software layer on
top of independent databases that gives
users access to some or all of the data in
each layer.
A decade ago, when Defense Acqui-
sition University got serious about met-
rics and analysis, it brought in an expert
from industry as its new CFO, Mark
Whiteside. He led a team that quickly
put into place an integrated set of busi-
ness systems that included a data mart.
All these systems were mapped into the
data mart, says Christopher R. Hardy,
director of the university's global learn-
ing and technology center.
Dashboards on desktop computers
Coming to Terms
"Data will set you free," says Steven Rice, executive vice
president for HR at Juniper Networks based in Sunnyvale,
Calif.
But first it might drown you. Many basic issues about
"big data" existed before the concept of big data itself exist-
edsuch as availability, accuracy and definitions of data.
Consider Rice's skirmishes over how to measure head
count. "There was always a battle over who owned the
data and the definition of head count," Rice recalls. "People
fought me tooth and nail, insisting that it was owned by the
line businesses and wasn't company data."
Consultants, analysts and practitioners agree that defin-
ing what a metric means is one of the big unresolved chal-
lenges for HR metricsand that challenge existed long
before the big data era arrived. If enterprises do not use
standard definitions of the data points that create these met-
rics, they are essentially meaningless. Imagine if the finance
department had to use different definitions for "revenue"
from each business unit. That's the basic problem many HR
organizations face with head count, attrition and other key
terms.
Eventually, Rice successfully argued that the company
needed to agree on one calculation to use for business plan-
ning, forecasting operational expenses and resource plan-
ning that would comply with the legal definition of "employ-
ee." It still took a couple of quarters after his team "owned"
head count before business-unit leaders accepted HR's
number as accurate. Now, it's no longer a question of who
owns the data but of how to unleash the potential brought
on by having so much information at one's fingertips.
Disputes like the one Rice describes may someday be a
thing of the past. The 3-year-old Center for Talent Reporting,
a consortium with 60 member companies, has proposed a
set of standard definitions to be used for HR metrics.
David Vance, the center's executive director, says the
goal is to bring standard measures and standard reports on
HR metrics the way the accounting profession has standard
measures and reports for financial statements. More than
500 proposed definitions can be viewed on the center's
website.
The aim is to persuade HR organizations to adopt the
definitions voluntarily and for software vendors to incorpo-
rate them into their products. This fall, the group expects to
post an accreditation process for HR organizations, vendors
and consultants, Vance says. Now, with big data, "it is more
important than ever to have clarity and ground rules on how
you report these measures, because companies are buried
in data."
24 HR Magazine October 2013
COVER STORY
now give managers a direct view into the
data mart and the metrics they use to
run their operations. "We have monthly
meetings to specifically look at trends
and results," Hardy says. "Data analysis
has changed our whole culture."
An early exercise convinced Hardy
of the power of data analysis. The lead-
ership team at the university had ear-
lier accepted the conventional wisdom
that an instructor needs four hours to
prepare for one hour of class instruc-
tion. Data analysis revealed that after
the instructor had taught the class for
a while, prep time fell to 30 minutes
for each hour, says Hardy, co-author
of Leading a Learning Revolution:
The Story Behind Defense Acquisi-
tion University's Reinvention of Train-
ing (Pfeiffer, 2008). "The finding had a
huge impact on staffing, budgeting and
instructor performance expectations,
and other resource decisions," he says.
Peeling Back the Layers
Analysis that combines HR data and
financial data can provide human capi-
tal insights that lead to decisions and
programs with business impact. Sales
databases and customer relationship
management systems are fertile reposi-
tories for information that can be used
in advanced workforce analysis. Due to
technical difficulties and silo mentali-
ties, however, gaining access to data
outside of HR's control can be a hurdle.
This is especially true of companies that
have decentralized structures with busi-
ness units that use different systems.
"We have all the people data we need
because we did a serious overhaul of
HRIS a couple of years ago, but the peo-
ple data by itself isn't enough for strate-
gic analysis," says Andrew Ermon, HR
analyst at Superior Energy Services Inc.,
a Houston-based oil equipment and
services business with 14,000 employ-
ees worldwide. Ermon needs additional
data to prepare a strategic workforce
analysis when a business unit considers
opening operations in a new domestic
11110000001100 1 0 0 0 i s o i u m
IOt11111l11111 -I 1 I 01111M11
l1M11110000110i1l1i1t1'1 0 0 0
I11190001100 110000001iO 0 0 1
^onoooonto iiiiiiOioiiiri o
)oiiiioiiii MOCOtMon 0 0
jituoiimo iiinoiio o 11
ioeoiiiitoii otMoeoooo 10
i oi i ti i i o*o t on ooo o o i
tiiiiioo*o t oo 1190 0 o o
101111000011 1100 011 1 11
oiitiimii 1111 Mito 00
>oooiiii 11 1111 neo o 10
I1901111 11 1100 1111 o 0
mi t o 11 ton wo o 0
1111(0 to oto 0011 1 1
oooto to lito 11 o 0
1'1 o 1111 90 1 1
1 1 ' I 0000 090 eo
1 1 "O M-I -1-0 O
0 1 1 1 1 1 0
o o 1 .0 lO o
o 1 '1 '1 1
1 o o
^1 1 o
0 0 1
o
o
o
1
". , u .
0 0 0 1 0
0 0 0 1 1 '
0 0 0 0 1
o 0 1 o O'
0 - 1 1 1 1
n o 0 1
100110011
000111111
0 o 1i11
1 1 0<1>0
0 0 0 0 0
1 1 o
1 1
1 0 0 0 0
o 1111100i1111111001100O1Oi09
0 o 1 016OO01001111O0111i>0tH11
1 o 1 o 111000011001111110040t1*01
0 o o 1110011001100000011000011111
1 o o i ' i ooi i i i oot i i i oot i i i i i oi oi
o 1 1 1M00000011111100 11t1111
0'1 10900011t100001111 BOtOHI
1111000000
iiiieoioiiii imiitoeo
00
111
1111
11 1
0 0"0
111
1 o
0 1
11O0f111011 tO11111H1
'10011111111 11 111100 tito a
ooioiiiooo 00 001100 ton 1
ao"0 OM'1 00 001111 eoti 1
00 1 o o 00 111111
10 1 1 1 'O "O' ro
11 0 1 0 1 o 1 11,1 %
1 1 0 0 1 vO o to ^
1 00 00 11 i
1 "1 O -JO go
1 o 1 fo a
0 1 0 .,
1 0 1 o
0 1 0 . ,
o 1 o
o 1
o
1
In te r n a l and e x t e r n a l sources of u n s t r u c t u r e d
d a t a are m u l t i p l y i n g t o include social nnedia,
b logs, w i k i s , e-m ails and m o re .
location. This data includes internal and
external HR and financial data about
the labor poolsupply, demand, skills
and hiring costs.
In this highly decentralized com-
pany, however, "getting access to finan-
cial and operational data is hit or miss.
The data is either hard to get to or hard
to find," Ermon says. "And it often
includes confidential data that people
are hesitant to let others have access to."
Once HR gets permission to use
financial data, there is more to do. At
Juniper, which has more than 9,000
employees worldwide, HR wanted to
quantify how quickly it took new sales-
people to generate revenue at expected
levels. "A lot of our backend systems
were not aligned to capture this kind of
information," says Steven Rice, execu-
tive vice president of HR. "We had to do
a lot of architecting around what data
items we capture. That is hard work."
In the past decade, HR at FedEx
Express, an operating company of
EedEx Corp. with 155,000 employees
worldwide, has increased its use of ana-
lytics and fought similar battles. Today
it has access to all kinds of data. "We
always look at HR metrics in hiring,
recruitment, training, ROI, efficien-
cies, retention, talent, skill sets needed,
succession planning and individual
planning," Bennett says. "To support
business goals, we also look at business
metrics when we evaluate our talent
cost of salary and benefits for talent per
revenue, for example."
Unstructured Data
Eor years, HR has used unstructured
narrative answers from engagement
surveys and performance reviews for
human capital insights. In the era of big
data, the internal and external sources
of unstructured data are multiplying
to include social media, blogs, wikis,
e-mails and more. These sources are
likely to offer many actionable insights
about employee engagement.
Starbucks gained insights about
employee motivation from a survey with
26 HR Magazine October 2013
COVER STORY
many open-ended questions the com-
pany used in an employee segmentation
study. It hired graduate students to assist
with a manual content analysis of the
massive amount of information. Tools
to automate this type of process are still
evolving.
"Automated analysis techniques
of unstructured data are still in their
infancy," says Ranjan Dutta, director
of the metrics and predictive analytics
practice at PwC Saratoga, a consult-
ing firm. "But the capabilities will grow
over the next few years." Oracle, SAP,
Workday and other software vendors
are working to make it easier for cus-
tomers to manage and use multisource
big data.
A few HR organizations already
mine social networking sites for data.
Juniper, for example, uses Linkedln.
In addition to housing resumes, the site
puts a lot of research and development
into analytics. Over the years, it has
rolled out more and more analytical fea-
tures for both individual users and busi-
nesses. Today, a business that subscribes
to the Linkedln Recruiter service can
access every Linkedln profile and search
for any number of criteria using stan-
dard Linkedln filters.
Rice had developed an internal data-
base for tracking employees' skills,
knowledge and experiences, as well
as voluntary departures and potential
candidates, but Linkedln has become a
superior solution because most profes-
sionals use it as the go-to place to post
and update their career profiles. "People
are much better about updating their
profiles on Linkedln than in our data-
base," he says.
In addition to recruiting. Rice's team
uses Linkedln data to better understand
where Juniper hires from and where
departing employees go.
Juniper is also among a group of cor-
porate early adopters and power users
that collaborate with Linkedln to iden-
tify emerging talent practices and inno-
vative ways the service might evolve.
I O11i 1' 1' 1M'
MOOi i ' 1 0 0
011*0001100
01111901111
1 1 0 1 , o i 1 1 1 OuO IWUUOJ i . i . i o. i i i i m9 0i i ooonoooooo
1 0 1 1 1 1 1 o o Oj 0ooooi i 6oao@ot i ooi i ooi oi i ooi i i i t oi i i i ooi i i i i i
i1uOuOtOi1OvOuOt1000000i11111MI1011110001101111110000110011
11111100001111i100OOO00OO011|OO(01111O0l1tO11OM0011O0O0111111
08011110011
01111110000
oootoooeon
111100!10000
S0000 0*0 o
OO'OCOi 1000011060l 11100111 lOOtit 160111111(10OO90
1 1 0 1M11i1011l1111100909000t11H100
1 0 11 0 0 iotuio0oooooiiiii(moiiii
imeo
O11t1OtO11
I0111U11111
10001111 11
11
11
00
' O
o
1
.0
1
1
1
1
1
o
o
o
o
1
1 1
m
on
0 0
o
0011
CO o
' 1 o
1111
1111
' 1 o
o 1
0 o
1 o
1 1
0 o
1 1
1
o
1
0 0 0
1 0 0
0
0
1
1
0 0 0
501111
0 0
1 0
o 1 1 o 1 01
0 o 00011'111
1 1 000111111
o 0 1 1
1 0 0 0
0 0 0
1
00000
1190000060111111t111tO11
i i t mi i oot o 1111*00000
111100001111
i i t i e o t o t o o o
110011110011
4011
"Ot o
1 0
1 1
0
1
0
1
0 1
111
0 0
1 o
o
o
o
o
1
o
o
1
ooeoo1100*0
0 0 0 0
1 1
1 1
1 1
0 0 0
1 1 1
1 o
o 1
1
o
o
1
o
1
1
1
o
toso
1160
1111
1
1
1
1
o
1
o
o
o
o
1
mill
001100
110000
" 0 30
1 0
0
1
0
1
1
nimaoao
oootiim
011111111
t1 111100
M1190
toim
111111
01190
t o 11
o
o
o
11
90
1
o
o
1
00
0
0
t o
11
'1
t1!1fOf1
00A011S0
0000011
11000011
11110011
11*0 00
011 11
011 11
11
o
00
11
0011
11,1
00
1
0
0
1
0
1
11
-1
0
0
The HR teamuses Linkedln d atato b etter
understand w h er e th e company hires f r om
and w h er e d ep ar ting employees go.
"Linkedln is moving deliberately and
thoughtfully on the corporate talent
solutions beyond recruiting, which will
be more applicable for our needs," Rice
says.
He would like to use Linkedln to
better understand career paths and
then apply that knowledge to influence
recruiting, learning and other programs.
But "we're still figuring out the method-
ology to tackle this," he acknowledges.
Thrivent uses Linkedln, too. Based
on the company's earlier analysis of HR
and financial data, McKinney knows
that a predictor of success for indepen-
dent agents is having a family member
or friend who works for Thrivent or
elsewhere in financial services. Thrivent
seeks agents who are entrepreneurial
and want their own business but who
also like the idea of being connected to
a big company. It seeks individuals with
strong ties to their communities and a
desire to serve others. "We are figuring
out Linkedln as a mechanism to find
these candidates," McKinney says.
Social networking sites such as Face-
book also hold promise.
FedEx, which has conducted cor-
relation studies between employee
data and unstructured customer sat-
isfaction data, is now exploring how
it might compare what employees say
about FedEx on public social network-
ing and career sites with what they say
on engagement surveys. "Employees
are your brand ambassadors, and social
media and network sites are mega-
phones about your company," Ben-
nett says. "Today employee satisfac-
tion transcends the workplace into the
social space. If we see that employees are
dissatisfied and putting that on social
media, we have a problem."
But McKinney is reluctant to tap into
a social networking site such as Face-
book because of privacy concerns. He
argues that the trust-based relationship
with employees could be at risk if HR
starts perusing Facebook pages. "What
data you decide to look at and why is a
tricky line to walk." J
28 HR Magazine October 2013
Social
Agile
Organic
Transforming
AvatureSIM
Where social
behavior meets
onboarding and
internal mobility
Avature
Configured
for Talent
CRMIATSiSIM
www.Avature.net
COVER STORY
The Power of Predictability
For HR, the crown jewel of big data is
data-based models that predict the prob-
ability of an outcomejob candidates
who are most likely to succeed, for exam-
ple. Predictive models can be fine-tuned
over time to become more accurate.
Here's an example: According to
Bersin, Deloitte Consulting created an
attrition model "that looks at 30 or 40
dimensions. HR can now predict months
in advance with high correlation who is
going to leave. "
Since the federal budget sequestra-
tion. Defense Acquisition University has
used predictive modeling to understand
the resources it will need and the training
its clientele will require as a result of the
budget cuts. Hardy says. The total-cost
model for classrooms cited earlier in this
article is one example.
Thrivent's McKinney says every HR
organization would like to be able to pre-
dict which job candidates and employees
will succeed. "That is an industrywide
challenge we're all working on," he says.
"It is similar to how you would do cus-
tomer predictive modeling in market-
ing. " To understand the success profile
and the predictive model constructed
from it, you need a lot of data from the
past, McKinney adds.
Bersin'sTalent Analytics
Maturity Model
Level 4: Predictive Analytics
Example: Predictive models
Level 3: Strategic Analytics
Example: Employee segmentation
studies
Level 2: ProactiveAdvanced
Reporting
Example: Dashboards
Level 1: ReactiveOperational
Reporting
Example: Basic metrics and
development of data dictionary
Source: B i g D a t a i n H R : B u i l d i n g a C o m p e t i t i v e
T a l e n t A n a l y t i c s F u n c t i o n T h e F o u r S t a g e s o f
M a t u r i t y . Bersin & Associates. 20 12.
30 HR Magazine October 2013
Predictive modeling requires his-
torical data, PwC Saratoga's Dutta con-
firms. Even if an HR organization is not
yet ready to dive into analytics, he urges
leaders to start collecting data. "If you
set up a system today to collect it, in a
couple of years you will be able to start
testing hypotheses. "
Most HR organizations are not cur-
rently using predictive modeling. They're
still writing the earlier chapters of their
own data-driven stories. Bersin devel-
oped a maturity model he says HR orga-
nizations follow on the way to more-
sophisticated use of big data.
In a survey of 435 U. S. and Canadian
companies with 1,000 or more employ-
ees conducted by Bersin earlier this year,
the respondents identified their organi-
zations' maturity levels in adopting tal-
ent analytics. About half of the respon-
dents (56 percent) were using operational
reporting, 30 percent were using proac-
tive advanced reporting, 10 percent were
using strategic analytics, and only 4 per-
cent were using predictive modeling.
In the 11 years since Bersin started his
consulting firm, he has seen slow prog-
ress toward the adoption of data-driven
HR. "It hasn't gone off like a rocket, but
there is an increasing level of awareness
that this is an important part of HR," he
says. "More HR people have analytical
jobs now, and if you offer an analytics
track at an HR conference, people will
attend. "
For FedEx's Bennett, the overrid-
ing challenge of big data, like the earlier
data-driven HR phases before it, is to
understand the business value of the data
and, whatever its structure or source,
to understand its relevance to business
strategy. "That needs to be the starting
point," he explains. "That way, we have
a better understanding of the direction
we need to go. " QB
Bill Roberts is technology contributing
editor for HR Magazine and is based in
Silicon Valley in California.