HR Analytics

Beware the Illusion of Knowledge in HR

Beware the Illusion of
Knowledge in HR

Joachim Skura, HCM sales developer at Oracle @JoachimSkura


A ‘gut feeling’ only goes so far in HR decision-making. It’s time to base strategies on rational truths.

Joachim Skura

Joachim Skura, HCM sales developer at Oracle

We all make ‘educated guesses’. If we make a wrong assumption in our private lives, the consequences are usually harmless. For instance, if I need someone to repaint my house I would assume whichever contractor has been around the longest will do the best job. I’m no expert in the area, but sometimes you just need to make a decision based on “gut feeling” or a quick comparison of your options. And worst case my walls would be missing a topcoat of paint.

The educated guesses we make at work can have much more serious repercussions. In my experience, these generally fall into two brackets:

  • Assumptions based on unfounded correlations: for instance, there is a widespread belief that Gen Y workers switch jobs more often than their older colleagues
  • Decisions based on short-term rationale: the tendency for companies to make HR decisions based only on their current bottom line instead of their long term goals is a prime example, and one I recently covered in greater detail

Thankfully, a new generation of powerful analytics capabilities allows businesses and HR leaders to feed more informed decision-making while removing the above biases from the equation.

 A new generation of powerful analytics capabilities allows businesses and HR leaders to feed more informed decision-making while removing the above biases from the equation.  

Assumptions companies make when managing their people can be quite damaging. For instance, we tend to assume candidates from good schools will better serve the company but how many organizations actually track this in the long term? Unfortunately, most HR leaders do not take full advantage of HR analytics to make better decisions about employees, largely because they perceive factors like engagement and wellness to be matters of instinct rather than hard numbers.

This simply isn’t true. In fact a more objective approach to people management helps HR take the bias out of decision-making and instead apply sound principles that benefit the entire organization over time. In the words of the American historian Daniel J. Boorstin, “The greatest enemy of knowledge is not ignorance, it is the illusion of knowledge.”

 A more objective approach to people management helps HR take the bias out of decision-making and instead apply sound principles that benefit the entire organization over time.  

I’m currently working with a pharmaceuticals company on a sort of ‘intellectual playground’ where we look at how analytics can make HR more strategic. On the issue of a potential hire’s previous schooling, one of our projects involves tracking long term employee performance to see how strong or weak the link is between factors that affected a hiring decision and their performance over multiple years. The results may yet prove traditional assumptions wrong. Just think of what that would mean for hiring strategies...

The point here is not that one analysis will reveal once and for all which schools a company should hire their talent from. Rather, the argument is that analytics can debunk received wisdom, help us address biases we might not recognize, and provide insights we would never get otherwise.

The challenge with HR analytics is to combine hard data on things like hiring channel tracking, a candidate’s educational background, or a worker’s measurable output with soft data on employee engagement, workers’ perception of HR, and results from performance reviews. This is the only way to gain a complete picture of how all the relevant factors interact to drive employee success, or stand in its way. It would not be a stretch to say integrated data is the lynchpin of intelligent, unbiased HR decision-making.

This analytical approach also helps companies test HR programs more accurately. For example, they can analyze a new intake program on a more frequent basis to see how effective it is and to quickly make any required changes in light of the patterns revealed in the data. Similarly, the company can pinpoint what combinations of factors drive certain groups of employees to resign or go work for a competitor and work to address those more proactively.

 It would not be a stretch to say integrated data is the lynchpin of intelligent, unbiased HR decision-making.  

It’s essential that the right people can access this data and that they can do so conveniently. HR teams and line managers are ultimately in the best position to effect change among employees and must therefore be empowered to do so. So, while the analytics process may be complex, the user controls and outputs must be easy and clear enough for the right people to understand and act on them.

The 18th century English writer, Alexander Pope, once said “A little learning is a dangerous thing”. Much has changed in the 300 years since then, but our propensity to make decisions based on hunches and incomplete information has not. It’s human nature.

In the world of work we cannot afford to rely on superficial or fleeting learning, certainly not at a time where the future is so volatile for business. A concrete understanding of how people’s actions affect the business, their needs, their motivators and their competencies has never been more important. A more integrated analysis to data is the key to building this solid understanding.