Cos should spend more on talent analytics

A couple of weeks ago I attended a talent analytics conference that brought together practitioners of HR/talent analytics (TA) as well as HR leads from various organisations, big and small. The focus of the conference was to get an overview of the talent analytics domain in India, understand how to make it work, and to learn from successful case studies where organisations had been able to gain deep insights from a data-driven approach to their people processes.

Some statistics shown there had me speculating about where we as a country are in using data-driven people processes.  

While nearly 77% of the multinational companies (MNCs) claimed to have a dedicated TA capability or were looking to develop it within the next couple of years, the corresponding figure for Indian organisations was only about 56%. Moreover, over 70% of all such efforts were geared towards reporting and dashboards in some form or the other, from simple to more complicated. While this is encouraging, this is still touching only the bottom-end of the analytics spectrum. A mere 14% of companies were working with predictive analytics.

Moreover, there seemed to be a distinct difference between people’s beliefs and how they translated into action. While over 96% claimed that TA enables HR to support the leaders in business execution, 83% agreed that TA bestows a competitive advantage and over 70% of C-suite executives and business leaders regularly requested for insights based on TA, only 40% mentioned that they had a designated budget for their talent analytics initiatives.

The top objectives for TA were talent attraction/retention, improving HR process efficiency and measuring the impact of metrics on business outcomes. While these were laudable goals, the most surprising aspect was the fact that the budgets allocated to TA showed a skew towards the lower end. Over 78% of organisations had a budget of less than Rs 50 lakh while 16% had a budget between Rs 50 lakh and Rs 1 crore.

Clearly, while organisations in India recognise the need for utilising the wealth of data to affect their people decision-making, they are less willing to put their money where their mouths are. This might have worked well in the past in an economy where talent was in abundance but with the increasing pace of automation and the higher skills required for most jobs, it looks like organisations will be pushed to investing more in TA platforms and tools in order to gain a competitive advantage. A recent article lamented the fact that enterprise SaaS (software as a service) start-ups in India haven’t met expectations. HR Tech start-ups operate in a more difficult environment and face greater challenges. However, I left the conference with a positive feeling that we are at the cusp of a talent analytics revolution.

The writer is founder and CEO of HR analytics start-up, Factorial Analytical Sciences