Liliya Apostolova, Senior High-Tech Product Marketing Leader at Lumesse
Much has been written about how the financial sector can take advantage of Big Data to reveal customer insights to inform R&D strategies and service. In fact, according to a recent IBM report found that 71 per cent of banking and financial markets firms report that the use of information (including Big Data) and analytics is creating a competitive advantage for their organisations, compared with 63 per cent of cross-industry respondents. However, Big Data has applications beyond providing actionable insights to improve services for customers. The HR organisation in many big firms is sitting on a gold mine of employee data but very few know the value of it and how to use it to help inform and shape their people strategy.
Global management consultancy firm, McKinsey predicted that data will become a key basis of creating value for the business – increasing its competitiveness, underpinning new waves of productivity, growth and innovation. This has become a reality in 2014, as analysing and using employee data to inform business decisions and strategy remains on top of the priority list for HR managers and decision makers.
In order to properly use data to positively impact business strategy, you need to align the data to the problem that you aim to solve. For example, if acquisition of the top talent is a business priority, you will need to focus on selecting data that will help form best practice for recruitment. This is particularly pertinent for many companies given the pervading ‘war for talent’ in the financial industry and changing strategies for selecting and retaining the very best. A survey by Robert Half Financial Services in 2013 found that 89% of executives in the financial service sector found it either somewhat or very challenging to find skilled financial services professionals, while 83% were concerned about losing top performers to other opportunities.
To meet this challenge, many HR leaders are already changing their thinking around recruitment decisions – focusing on potential to learn rather than an already established skill for the role. The right data that provides insight into how past candidates and current employees have been hired, their skills and how they’ve progressed in the business, will help many companies to understand if this is the right approach for them.
One company did just that. Josh Bersin, Founder of Bersin by Deloitte, a research company that advises on HR strategy, talks about one of its customers who applied data analytics to its recruitment strategy in a Forbes article. The customer, a large player in the financial sector, had placed a strong seven year emphasis on recruiting people with a proven track record of academic success at the top US colleges. However, data analytics found that where employees attended university or the grades they received had little to no impact on their success in the job. Instead, previous proven success in a similar job, the ability to multitask and move a project forward with little instruction helped made them better candidates and ultimately, employees.
Yet understanding which data is needed is only the first part of the solution – extracting the right data can be a challenge. As anyone in HR knows, taking data from several different tools and compiling the information in one place can be a huge admin burden. In the financial sector, this can be completed even further by frequent mergers and acquisitions which have created countless and costly silos of data.
Furthermore, finding relevant data in this scenario can become a taxing process. HR software and analytics can aggregate and connect the data flow of the employee’s journey – from the first step in the recruitment process right through to the different stages of the learning process – to help HR departments’ spot trends and patterns to identify both challenges and opportunities.
Specifically, technology systems integrated on an open platform with a unified reporting layer can provide unified analytics and reports. This means companies can choose the best mix of innovative technology for their needs while keeping the advantage of visibility into data across multiple systems and platforms.
By analysing the links between people practices, productivity, recruitment and talent retention, you’ll be in a better position to put in place a strategy that aligns with the business and ultimately improves the bottom line. However, data, its use and application in the business must be consistently monitored so that you can continue to inform and adapt your people strategy on an ongoing basis – keeping up with ever changing people complexities and needs within the financial sector.