How People Analytics Is Changing HR Game


We are living through a historic disruption in the world of work. None of our ancestors who have been associated with the HR function have witnessed such rapid changes in the professional space, shares Keith McNulty, Global Director of Talent Science and Analytics at McKinsey & Company at People Matters TechHR India 2021 conference.

With the evolution of work culture and technological advancements, social contracts between employees and employers have also evolved. Today, the social contract has gone beyond monetary compensation to include employee experience and emotional connection. In case of failure on the part of the employers to stand by the new form of the social contract, employees tend to put down mass resignations, which is a common and new threat to almost all the industries. In order to cope up with this challenge, leveraging data and analytics is highly required to be able to retain the key talents within the organisation.

‘In a balanced situation, where things are stable, you expect individual wealth to track national wealth. During the period of high innovation, it is found that the investors tend to take in a lot of the national wealth while the average workers don’t at all benefit,’ says Keith McNulty.

Imperative for HRs to embrace innovation

Keith pointed out that according to an analysis carried out by McKinsey, in the coming years, people will no more be laid off with nothing to do but they will shift from one job to another. He stressed that we should expect profound shifts in work.  Somewhere between 3-14% of the global working population will make this shift by the year 2030.

Stating the fact that the pace of change is incredible at the moment, he expressed that keeping up with this is very challenging. Thus, it is imperative and also an opportunity for HR professionals to break the ice.

Evolution of HR function

HR merely used to be a part of the administrative function until almost 2000s which we address as HR 1.0. The new millennium came with a series of changes in the function since which people started realising the possible areas that this function could be covering.

Twenty years back HR started getting involved in the business and became advisory to the same. ‘We call this phase of the HR functions HR 2.0. HRs started becoming more professional and people in this function started qualifying for several functions,’ points out McNulty.

Today we are in the era of HR 3.0 which upholds HR as the strategic business partner. This is where the role of HR comes into action to guide the companies in streamlining the talent management strategies beneficial for the business.  

Use of analytics in business

McNulty perceives, analytics is the key to navigate into the uncertain future. He stated that this is the transitional era where certain jobs are becoming extinct and new functions are coming in. In such a transitional period it becomes a challenge for the companies to assess the right candidate for a given function and determine the experience and skills that candidates bring to the table.

Sharing an example of how analytics helps in strategic decision making of the company he stated that McKinsey had initiated research in which employees of a single organisation were colour coded according to various factors such as geography, academic history, language, etc. When the results were analysed it was found that within an organisation, people interact mostly on the basis of the functions that they perform and not anything else.

When it comes to learning and skill development of employees, analysis has an important role to play which is eventually connected with talent retention. Critical analysis of the people helps an organisation know the factors driving the employee-employer relationship at both individual and mass levels.

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