As of 2019, analytics has entered the mainstream lexicon but remains in its relative infancy. Forbes predicts that by 2020, the number of Data Science and Analytics job listings will grow by nearly 364,000 to approximately 2,720,000. Currently, demand for data analysts far outstrips the supply, indicating skilled workers are relatively scarce. Due to a talent shortage, few companies have actually integrated analytics-based best practices into daily life. 2019 will see companies try to eradicate the gap between the incredible potential of analytics and actual business results. Below are four trends we expect to see as companies further unlock the benefits of analytics.
1. Firms Create Data-Driven Cultures
To successfully implement people analytics, companies must embed data-orientation into culture. Firms recognize the necessity of data-driven cultures, but few have successfully actualized them. According to the Harvard Business Review article, Big Companies are Embracing Data Analytics, But Most Don’t Have a Data-Driven Culture, virtually all respondents (99%) say their firms are trying to move in that direction, but only about one-third have succeeded at this objective. In 2019, many of the remaining two-thirds of companies will attempt to bridge that gap. Successfully assimilating analytics into culture elevates firms from feigning competency with data analytics buzzwords (while following behind industry peers) to actually weaving data-driven best practices and efficiencies into daily life.
Organizations must expend substantial time and effort to transform from being data-aware to actively data-oriented. Historically, leadership has failed to recognize the size and scope of the investment required. According to the HBR Analytics Survey “An Inflection Point for the Data-Driven Enterprise,” corporate leaders understand, at a high level, that transformation is needed but underestimate the work required to become more data-driven and transform into a data-driven enterprise. Change efforts are difficult, and leadership’s staunch support is essential for companies to embrace data-driven cultures. They must convey that data-orientation is an ongoing methodology which promotes best practices in every initiative a firm undertakes. As data’s necessity manifests through competitors’ analytics-powered advantages, we think leadership will more thoroughly support analytics initiatives in 2019.
2. Data Democratization Empowers Digital Leaders
Access to and mastery of analytical tools empowers workers of all levels, which fosters the development of digital leaders. Digital leaders are essential for creating and sustaining data-driven cultures. These leaders possess interdisciplinary skills honed through work within cross-functional teams. They embrace technology, helping their respective organizations remain on the cutting edge. Our team has written about the necessity of digital leaders; their importance will only continue to grow as young, tech-savvy employees enter the workforce and technological development unlocks new analytical capabilities.
Digital leaders recognize the value of analytics, but more importantly, they embody the values of analytics. They reject hierarchies in favor of collaboration, promoting meritocracy and prioritizing the dissemination of best practices. Digital leaders improve organizational openness and agility. Consequently, solutions mined by analytics can quickly and effectively be put into place. This, in turn, greatly amplifies the power of analytics; respondents in the Harvard Business Review Analytics Survey listed organizational silos as the top barrier preventing organizations from transforming into data-driven intelligent enterprises. Digital leaders are lifelong learners continually optimizing to improve over time. They support strategic change efforts and look for better ways of doing things. Crucially, they have the leadership and interpersonal skills necessary to charismatically convey strategic insights.
3. Companies Partner to Gain Analytics Expertise
Analytics is “ready” for essentially any organization, but most organizations are currently unequipped to conduct all their own analytics in-house. Analytics is incredibly versatile. Properly applied, it bestows benefits regardless of project size, scope, or subject matter. This places near universal pressure on organizations to remain on pace with competition. However, many companies don’t have the human capital or technological resources necessary to reciprocate adoption. According to the Dun and Bradstreet/Forbes Insights study, “Analytics Accelerates Into the Mainstream,” 27% of respondents cited skills gaps as a major obstacle to their current data and analytics efforts. 60% of respondents using outside partners stated that internal staff did not have bandwidth for the analytics needs of their companies. Additionally, organizations cannot afford to lose focus of their existing core competencies in an effort to add data capabilities. For many, it makes no sense to invest heavily in technological capital and divert workers from the roles they already possess expertise in.
In order to remain dedicated to their key business objectives, receive training from experts, and immediately gain analytical benefits, organizations are increasingly outsourcing analytics solutions from third-parties. More than half of the organizations surveyed by Forbes Insights use “outside partners for some or all of their analytics needs. Furthermore, 55% of those companies reported working with third-party partners to address the lack of skills.” This allows employees to maximize developmental efficiency, balancing both acquiring new skills and meeting current responsibilities. The study further reports that 55% of those surveyed said third-party analytics partners execute higher quality work than analytics work completed in-house. This indicates the need to work with companies where analytics is a core competency. By partnering with analytics-ingrained companies, organizations can use mathematically-validated solutions to optimize their current resource pool instead of depleting it.
4. Better Data Increases People Analytics' Impact
As unprecedented amounts of data are being created and stored, data analysts acquire a more comprehensive base of information from which to pull insights. Data is being created exponentially. According to Forbes, 90% of the data in the world was created in the last 2 years! Data is simultaneously increasing in value as well as volume. Therefore, organizations are investing in effective data storage and organization. This enables companies to extract precise data elements from a massive data pool for precise, efficient analysis.
Our team feels that though analytics will become more powerful with additional data and tools, organizations are mining the wrong types of data. In the human capital field, companies almost exclusively leverage static, historical data. Unfortunately, this doesn’t neatly align with where companies make money or drive performance. Many of the analytics insights aren’t actionable because of the time lag between when information is collected and when it is reviewed to guide strategic decision making. Psychometric assessments are one of the few existing applications of people analytics consistently linked to improved organizational performance. Psychometric assessments, which evaluate potential hires on relevant personality characteristics or aptitudes, are successful because they force companies to determine key behaviors and processes that drive business results. Furthermore, the assessments are actionable; candidates are not hired until the results of the assessment are analyzed.
We view real-time collection of data as one of the most valuable innovations in people analytics. Our team helps clients identify key behavioral drivers of business results, similar to the psychometric assessments. Employees then give and receive feedback to each other on these key drivers. Because communication impacts every element of everyday operations, we can gain insights regarding employees, teams, cross-functional groups, events, and processes as they occur. Real-time capabilities dramatically increase the actionability of analytics results, allowing organizations and individuals to identify and correct communication breakdowns as they occur. We have written extensively about the necessity of real-time people analytics. For more trends-based information on how real-time data collection improves organizational performance, check out our whitepaper, “The Human Capital Triangle.” For a client-specific real-time feedback use case, feel free to read our two blogs about Temple University Health Systems: “Revolutionizing Communication to Drive Performance” and “Real-Time Feedback Spurs Performance Improvement in TUHS Employees.”
2019 promises to be an exciting, eventful year for analytics adoption. For more information on analytics or analytics-based solutions, feel free to contact our team!