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Data-Driven People Analytics: Go Big or Go Home

The adoption of data-driven analytics in Human Capital Management is unstoppable. But for forward thinking people leaders, there is no need to choose between a computer model or human intuition because both are necessary.

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Jan 17, 2024
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Last updated on Feb 06, 2023

Sully is a critically acclaimed movie that tells the story of Chesley "Sully" Sullenberger. Tom Hanks plays the pilot of US Airlines Flight 1549 who, based on gut feeling, ignores flight traffic control and lands the plane on the Hudson River. The public investigation into this decision dramatizes a conflict between his intuition and a computer simulation. Sully is exonerated, and human intuition wins out.

What makes the movie appealing today? Machine Learning and Artificial Intelligence play an important part of our decision making. Whether we like it or not.  Sully entertains by tapping into our nostalgia for simpler times.

This article addresses the intersection of human intuition and data-driven People Analytics. Without a neatly-wrapped Hollywood ending, it’s a messy topic with no simple answers.

I will break with convention and skip to the ending. The adoption of data-driven analytics in Human Capital Management is unstoppable.  

Post Covid and in a difficult economic environment, we are at an inflection point. The choice is go big or give up and go home.

A Tale of Two Employees

Let’s start with a couple of employee categorizations derived from data-driven People Analytics. Meet two (fictitious) colleagues – Jessie and Rene. 

#1 Isolated Employee

Jessie is becoming disengaged. Over time, she is sending and receiving fewer Slack messages than her team members. There is also a spike in the number of 1:1 meetings canceled by her manager.

Jessie is considered a High Isolation Risk. This is due to the combination of declining communications and a more distant relationship with her manager. A deterioration in her wellbeing is not inevitable, and without an intervention it is increasingly likely.

#2 Potential Leader

Rene is considered a go-to person in her group, readily available to answer questions, help a colleague or to coordinate with other teams. She has extended her network beyond the organization by forming relationships with key customers.

If Rene were to leave, it could harm the team’s morale and productivity. She should be recognized and nurtured as a future manager. 

How it Works: The Endless Possibilities of Machine Learning

Terabytes of data are extracted from HRIS, IT and Communication Systems. 

Machine Learning algorithms analyze 100’s (or 1,000’s) of data variables. Variables include meetings scheduled, emails sent/received, Slack messages, vacation days utilized, organizational changes (for example, appointment of a new manager) or adjacent departures. 

The algorithms recognize patterns of data behavior for a particular population (company, team, local office etc.).  In our example, the algorithm compares the digital behavior of Jessie and Rene because they are part of the same team. 

The next step is to determine the relevance and weighting of each variable at an individual level. 

More clarity or context is gained when an event or alert (e.g., Isolation Risk is identified) triggers a micro-survey. 

The visualizations below capture just one data variable - Slack Messages - for Jessie. 

It's not only important to detect a decline in communication frequency. The algorithm also compares Jessie’s pattern with those of her team. This reveals that she is an outlier in regards to inclusion. This data correlates with a decline in the number of emails where she is cc'd by colleagues, a further sign of isolation. 

Plot 1: Slack activity during the 24 hours of every day. Red represents high activity while white means none. Plot 2: Slack activity aggregate per day. It is the summation of every day in plot 1. Source: WaterCooler

Conversely, Rene stands out because of the strength of her relationships compared to what is expected for her level of seniority.  The algorithm first learns the behavior of all employees. It then assigns a typical network strength for each seniority level. Rene acts like leaders with higher seniority designations in the HRIS. 

These are just two examples.  Other signals include problematic onboarding processes, resignation predictions of key employees,  burnout for underrepresented populations. 

If the goal is to use data as a tool to safeguard employee wellbeing, the possibilities and applications are endless.

…..Made Possible by Innovations in Data Science

Covid lockdowns forced us to change how we collaborate and communicate.  The move to Zoom, Slack etc., has  generated employee-level digital footprints. These are the primary signals of engagement and well-being. 

In the past, it was not feasible to decipher these signals. Teams of analysts had to sift through massive quantities of data to find them.  Now, due to advances in data science, a granular level of employee listening is accessible to HR.

Automated Machine Learning or AutoML is a breakthrough in data science.  Automation is applied to repetitive and labor-intensive tasks  previously performed by data scientists. Even with scarce people resources and tight budgets, fewer specialized data scientists are now needed if the right tools are used. 

Gartner refers to  Citizen Data Scientist as  “a person who creates or generates models that leverage predictive or prescriptive analytics, but whose primary job function is outside of the field of statistics and analytics." Innovations in data science allow us to go the last mile and put analytics insights into the hands of end-users.   

People Analytics is similar to other business areas heavily dependent on data science. There is a trend within multiple industries to develop analytics tools for the Citizen Data Scientist.  A factory manager today gets equipment safety alerts triggered by Machine Learning algorithms. 

Perhaps the HR Citizen Data Scientist role is not that far off.   

The Elephants in the Room: Ethics and Privacy 

The proverbial elephant in the room. Any discussions about Data and HR lead to the inevitable concerns about employee privacy and data security.

Let’s address the topic head on. 

I propose that we rephrase the conversation. It’s not about whether or not to use HR (or other) data, What's most important is that data is not used in the wrong way.

Every organization has governance for the access and use of information. This long list includes Intellectual Property, customer credit card or even IT system passwords. In each case, there are carefully built solutions to ensure the protection of these assets.

As with other information, there should already be protocols in place to protect employee privacy and control access to HRIS data.  Just as we limit access to payroll data, similar restrictions can (and should) be applied to People Analytics. In short, the privacy and security problems are real, and solutions may already exist.

The larger elephant in the room is the fear of unintentional consequences.  A Pandora's Box could be stuffed with more analysis than we can handle. Burnout, isolation, toxic work environments, failed onboarding, etc.  

This is information that requires us to act.

Identifying the problem is the (relatively) easy part but there is no formulaic fix to human behavior.

Of primary concern are the guardrails needed to protect employees. Let’s use a scenario where a People Analytics tool identifies a toxic team environment using a Machine Learning  algorithm.  

The ethical challenge  is twofold. 

First, there is a risk of retribution or misuse of power. We need employee protections from leaders seeking to penalize (perceived) negative employee behavior.

Second, care is needed that this manager not be singled out and penalized solely based on an algorithm-generated analysis. 

This requires consideration and sensitivity towards people managers themselves.  What are the expectations from managers who are also under pressure due to their own deliverables, goals  and commitments?  For instance, the front-line manager responsible for a team's wellbeing may also be identified as a candidate for high burnout risk. We all know managers who simply lack the experience to help an employee navigate through challenging periods.  

This is where the hard work begins.

When “People First” is Just a Slogan

A company’s culture can be toxic even if its annual report extols a “people first” vision. 

It's a mistake to underestimate the internal resistance to data-driven People Analytics.  The saying “sunshine is the best disinfectant” may apply to bacteria but not as much to  human behavior. When we start highlighting toxic or stressful work environments we should anticipate blowback.  Some of this will come from those with direct responsibility for employee wellbeing.  

The question is what happens when this information is uncovered?  It could lead to efforts to resolve the causes of resignation risk. Unfortunately there are more troubling scenarios. 

I will use an example of a fictional company that predicts the Resignation Risk of each sales office. Let's assume that this Risk is  based on vacation utilization rates, workload, and communication patterns. We find out that Philadelphia has a much higher Resignation Risk than any other office. 

In our story, the Philadelphia office exceeds its sales target. The Sales VP demands and gets a free pass and no adjustments are made to alleviate stress, improve work/life balance or stop the behavior. 

When predictive People Analytics data is challenged – and invariably it will be – senior management may need to step in. The most overlooked part of Going Big is to get unambiguous and public (not lip service) buy-in from the C-suite.

Think Big, Act Incrementally

In today’s uncertain economic environment, budgets are tight and we don’t have the luxury of a data analyst and scientist hiring frenzy or bets on big ticket technology solutions.

I have experienced my fair share of failed digital transformation initiatives and am a big proponent of incremental adoption. Human behavior is far too complex to change at the flip of a switch. What’s needed is careful planning and phased rollouts.

A pilot of a data driven People Analytics project should be limited to a small group and have executive level sponsorship. The implicit thesis is that by finding the root cause of employee distress, real workplace problems can be addressed. Proving this thesis correct will go a long way to securing organizational support.  

Pilot and demonstrate value. Rinse and repeat. 

Finally, it is a mistake to focus exclusively on technical metrics such as prediction accuracy.  Success is dependent on the hard work of responding to People Analytics alerts.  There are times when direct intervention is necessary to tackle workplace bullying. In other cases,  coaching and opportunities for professional development are the tools to help an employee thrive.  

The Challenging Terrain Ahead

Returning to Sully. The Tom Hanks character is faced with two mutually exclusive and potentially life-threatening choices. In the field of People Analytics, there is no need to choose between a computer model or human intuition because both are necessary.

While no two organizations are alike, the levers of change are consistent - people, process, technology, purpose, and proof.  Data-driven People Analytics and the ability to decipher human signals is an important component in this mix, but not the only one.

I wish us all the best on the journey ahead. 

WaterCooler, a People Analytics solution that provides a data driven sentiment analysis. Reach out to us to learn more about how we can help you close the loop between people analytics, wellbeing & business performance.

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