Most Companies Don't Use Data When Making Decisions About People

Most business decisions are based on data, whether it be sales forecasts, financial results or manufacturing efficiency. Yet, most companies aren't looking at data to help make informed decisions about the workforce - or if they are, the focus is more often on lagging indicators (what's happened in the past) as opposed to leading indicators (what may happen in the future).

A new study by the Institute for Corporate Productivity (i4cp) on predictive human capital analytics shows that, even though 70% of respondents say it's important to their business decision makers to have predictive analytics, only 24% feel strongly that they make human capital decisions based on that data. The news is a little better when analyzed by the market performance of participants, with almost 30% of high-performing organizations indicating that they make data-driven decisions, compared to only 14% of lower performers.

"The findings of i4cp's latest study indicate that many companies are essentially driving blind when it comes to the future of their workforce," said Jay Jamrog, i4cp's SVP of Research. "The good news is that these same companies have a great opportunity to improve and see considerable business impact as a result. In fact, the company that asked us to do this study is one of many i4cp member organizations currently working to improve their capabilities in predictive human capital analytics."

The study, now available to i4cp members, asked respondents to rate the extent to which their organizations generated predictive analytics that shed light on 12 vital workforce management questions. It also queried the extent to which they should be collecting such data. The following results illustrate the extreme distance between what is and what should be in the field of predictive analytics:

• Only 26% say they are using predictive analytics to determine the traits of an effective leader, compared to 82% who say they should be doing so.
• Only 19% say they collect data to help determine the number and quality of leadership pipeline candidates, compared to 80% who say they should be doing so.
• Only 22% indicating they are currently analyzing how many employees will be needed in the future, compared to 73% who say they should be doing so.

The results of i4cp's Predictive Human Capital Analytics Pulse Survey are now available to i4cp members in both report and interactive data formats. The study was conducted in April 2010 with global companies representing a broad range of sizes and industries.