If you have been reading me for any time you know that I often write about “futurism” and the fact that I would like to be a “futurist.” We here is a prediction for you, there is high impact HR in your future, IF (and that is a big IF) you learn how to use predictive analysis.
Predictive analysis is relating what we currently know to what we want to know. Businesses have been using it since 1903 when the credit score was invented. There are even conferences on it now, with the Predictive Analytics World conference being held in April of 2012. According to an article in The Futurist “Predictive analytics uses customer monitoring and data collection to improve marketing efforts and profitability. The field has grown steadily as a result of the ease of online tracking…” The article provided a couple of examples of the use of predictive analytics.
A Norwegian telecom named Telenor used predictive analytics to predict which customers would drop their telecom contract if they were contacted for marketing purposes. The company reduced churn (customer unsubscribes) by 36% as a result, and the campaign return on investment increased by a factor of 11. (Using predictive analytics, researchers also discovered that a cell phone customer is 700% more likely to cancel if someone in his or her social network does.)
MTV learned to predict which words in tweets and Facebook posts would produce the biggest viral reaction. When it implemented the new strategy around the launch of the Video Music Awards, MTV.com saw a 40% increase in hourly unique visits, a 55% increase in hourly page views, and a 36% gain in video views; it also set a new Twitter tweets per second record on a given subject: 8,868. “Lady Gaga” tweets drove 40% of incremental MTV.com traffic.
Wouldn’t you love to be able to produce this kind of data for HR? But HR has been slow to adopt predictive analytics. One of the leading proponents of its use is Cathy Missildine of Intellectual Capital Consulting. She writes and speaks on the subject frequently. You can see an example here. (I am happy to say she is a good friend and I learn a lot from her on this subject.) Another major proponent, and perhaps more widely known one, is Jac Fitz-Enz. He has authored a dozen books on Human Capital Management and is regarded as “the father of human capital strategic analysis and measurement.”
Fitz-Enz’s newest book is The New HR Analytics and the subtitle is “Predicting the Economic Value of your Company’s Human Capital Investments.” In his opening remarks he writes that little has changed in the “people game.” According to him “Management’s attitude about human behavior oscillates between totally predictable to absolutely indecipherable.” We ignore analytic tools and treat employees as costs. He says “HR managers claim to be too busy to change the way they operate, thereby leaving themselves continually behind the curve, adding to operating expenses and claiming that there value is immeasurable…. HR has not delivered strategic value because it does not have a strategic management model.” Well you get the idea. Jac is not all that enamored with HR today. But people are beginning to pay attention. Cathy puts on seminars, and will be speaking at the SHRM conference, and her sessions are always well attended.
I am going to help you as well. I will be reading Jac’s book and blogging about what I am learning. I am going to try to have a lesson up once a week. It is a valuable lesson. Fitz-Enz says “…the function is being dismantled through outsourcing and parceling out to finance and operations. The time clearly is now for HR professionals to face these realities and adopt a future-focused, integrated management model.” I agree with him.
So we will be taking this trip together, and putting my futurist hat on, I am certain it will result in some high impact HR in your future.
And if you have a thing for numbers, The Futurist also had this quote from the conference “The salary for statisticians will go up two to three times in the next few years, largely as a result in the growth of unstructured data from social media channels, according to IBM.”