The field of human resources analytics (aka human capital analytics) has taken the HR world by storm. The unsung analytical heroics of rare HR quants, hitherto hidden from sight, have moved to center stage. HR professionals worldwide have embraced the use of data, analysis and systematic reasoning to make human capital decisions. The literature, blogosphere and conference circuits are rife with articles, books, posts, twitterings, Linked In groups, webinars, courses and conferences related to human capital analytics. What is to be made of all of this?
“HR Analytics Handbook” by Laurie Bassi, Rob Carpenter and Dan McMurrer arrives at the right time and with the right focus. It is targeted at the reader who recognizes that something major is afoot in the practice of HR and wants to get up to speed on the topic. Bassi provides a clear, concise and practical briefing on the state of knowledge in the world of human capital analytics. Readers will be well rewarded for their investment of time in studying the handbook.
The handbook prompts the reader to consider his or her next step with respect to HR analytics: stay away, stay abreast, get involved, or take the personal initiative in terms of projects or career direction.
The book is a quick read at 54 hand-sized pages (excluding endnotes and bibliography). The five sections cover the definition of HR analytics; how to get started, needed skills, and common pitfalls; recent empirical findings; examples of organizations using HR analytics; and conclusions.
The material is well organized and the presentation is succinct. Since Bassi and her co-authors readily admit to modest intentions with this brief primer and accomplish their objectives, one cannot find fault with their endeavor.
However, as a literature review the handbook is not exhaustive even though the universe of publications is fairly compact at this point in time. It does not consider the vast trove of often insightful material (albeit largely commentary rather than actual analytics) in the blogosphere. The additional readings listed at the end of the book are thoughtful, but could have been arranged by topic to guide the lay reader on the appropriate sequence of further study.
The handbook does not describe the toolkit available to human capital analysts beyond mentioning correlations and regressions in passing. It would be helpful to know the specific statistical techniques and protocols that can be applied, as well as to distinguish between “model building” and “data mining” as alternative analytical approaches. Models are based on a notion or theory about how variables inter-act which are then tested statistically using relevant data. Data mining is theory-agnostic and is based on discovering patterns in the data.
One simple yet powerful notion underpinning the application of analytics to human capital decisions – hypothesis testing – is not mentioned. Analytics allow us to formulate opinions as hypotheses and to design tests based on data and statistics that can determine their validity. Hypothesis testing is an elemental form of analytics that leads to better decisions and, sometimes, results in spectacular myth-busting.
All the above notwithstanding, Bassi and her co-authors are to be commended for taking the first step in reporting on the state of human capital analytics. Their timely contribution challenges their peers to fill in the remaining blank spaces in the literature.
There is a need for an introduction to the actual practice of HR analytics targeted at HR professionals that guides them through the tools and methodologies applied to relevant areas. Yes, it means getting more comfortable with data and statistics and perhaps reaching out beyond Excel to some specialized software. I’m happy to report that yours truly has undertaken this book project.