Why big data is so important for human resources

Why big data is so important for human resources

We cannot deny our life is influenced by technology. A PwC survey of 10,000 members of the general public based in China, Germany, India, Britain and the US found 53% believe technology will change the way they work in five to 10 years. Social media can seem to make the world closer, what with Facebook, WhatsApp, Twitter, Instagram and Line. There are tremendous business opportunities, and several companies have adopted social media to grasp them.

Big data is another hot topic, as most experienced human resource (HR) managers agree their companies should establish the segment to support the predictive analytics capabilities of their workforces.

What is big data for HR?

Big data uses advanced analytic platforms, cloud-based services and visualisation tools to evaluate and improve practices ranging from recruiting to retaining. This involves integrating and analysing internal metrics, external benchmarks, social media data and government data to deliver a more informed solution to the business problems facing the organisation. Big data is supposed to help HR function by running analytics to forecast and make smarter and more accurate decisions, better measure efficiencies and support management decisions.

Why do we need analytics in HR?

In the past HR managers may have taken on a support role, but the roles and accountabilities changed once companies defined their business strategies, as their people strategies need to be aligned with the business plans. To drive business objectives as a strategic partner, HR managers need to transform themselves. In practice, this change can be categorised in four states as follows:

1)    Traditional: Reactive to business demand due to limited data, systems and people to provide support and difficult to analyse — for example, traditional Thai companies, government sectors;

2)    Emerging: Advanced responses to business demand, conducts benchmark analysis and an integrated dashboard has been put in place for management decision-making — for example, most Thai companies, family-owned businesses;

3)    Strategic: Conducts statistical analyses, sets up models aligned with the business model and makes decisions — for example, advanced Thai companies in finance and banking, energy, telecommunications and information technology;

4)    Predictive: Simulates and defines scenarios as well as identifies opportunities, risks and how to mitigate risks before taking action — for example, finance and banking, multinational companies in fast-moving consumer goods, retail businesses and conglomerates.

Most Thai companies are still struggling to change to state 4 from state 3. Some even face difficulties transforming to state 3 due to switching to a digital strategy, the lack of a budget to support a technology platform, employee capability and dealing with change management.

Preparation is crucial for success

There is no question HR will really start to adopt analytics in the coming years. Just as strategy, sales and marketing, finance, operations and supply chain functions rely heavily on analytics, so will HR. While HR will always be important for being able to read financial statements, predict future movements by analysing data and supporting management decision-making, it can also play a strategic, business-driven role by building a sustainable platform where the hardest-working people and most valuable results help to change your organisation.

Readying for this transformation is not that difficult, and in the next column we will share the issues you will face when making that evolution in your organisation.


This article was prepared by Wasan Chavalitvorakul, a partner at PwC Consulting Thailand. We welcome your comments at leadingtheway@th.pwc.com

Do you like the content of this article?
COMMENT