People data everywhere Bringing the outside in

• HR and talent organizations are expanding their HR data strategies by harnessing and integrating external data from social media platforms and other external sources.
• This trend is accelerating as more employee data appears online. Thirty-nine percent of surveyed companies are now leveraging social data to support efforts around recruiting, engagement, and understanding employment brand.
• While analytics programs based on internal data can be tremendously valuable, the most powerful solutions will leverage external as well as internal data to inform critical talent decisions.

View the complete Global Human Capital Trends 2015 series

Leading organizations routinely use both internal and external data to build their brand, find new customers, manage risk, and make investment decisions. What if HR could leverage data just as effectively? That time has come.

Accessing employee data outside your organization isn’t just interesting—it’s powerful. Despite being the lowest-ranked among this year’s challenges in terms of both its importance and its capability gap, 52 percent of respondents still believe that capitalizing on “people data everywhere” is “important” or “very important.” (See figure 1 for capability gaps across regions and selected countries). In 2015, we believe this trend will be more about taking advantage of available opportunities rather than about risking incurring opportunity costs through inaction. Today’s forward-thinking HR organizations are well aware of the treasure trove of data available through outside sources—such as social networks—that can help monitor and build employment brand, identify and recruit talent, better understand compensation strategies, recognize flight risk, and monitor employee satisfaction and engagement. As one executive commented to us as we conducted this research, “Why do social media sites like LinkedIn appear to know more about my employees than we do, and how can we leverage these data and insights?”

Recruiters now routinely use social tools like LinkedIn, Facebook, Twitter, and others to source and identify candidates. LinkedIn alone generates significant annual revenue by selling access to people data¹—the largest customer being HR organizations using data to recruit potential hires.

An important factor driving this trend is that data volunteered by individuals on social networking sites is often far more comprehensive and accurate than the data within corporate HR systems. HR leaders report that employee profiles on LinkedIn and other social media outlets are more accurate and complete than their own internal employee records.

In addition to Facebook and LinkedIn, many other sources of outside data can provide critical insights. This has led to the rise of new companies offering tools and services that harness external “people data everywhere” to help HR organizations make better leadership, talent, hiring, and management decisions. Dozens of new startups are building additional tools to enable HR to make sense of the mountains of data now available:

• A new startup vendor, Degreed.com, aggregates external people data about training and education with the goal of providing a complete, externally validated “transcript” of all their education during their career.²
• Several start-ups now monitor social networking data to try to predict patterns of external job-seeking behavior and retention risk. These companies claim that their data is more predictive of an employee’s likelihood of leaving than any internal data available.
• The amount of external data about the workforce is growing. Companies like Glassdoor.com, Careerbliss.com, Realref.com, Jobiness.in, Thejobcrowd.com, Indeed.com, Payscale.com, and dozens of others now crowd source company reviews, salaries, and feedback on organizations, making employer information more public every day.

Despite the wealth of publicly available data and the incredible opportunities it offers, most people analytics teams still focus on analyzing internal data.³ Only 5 percent of companies participating in this year’s study believe they have an “excellent” policy for leveraging social data (figure 2), and none of the US respondents to our survey consider themselves “excellent.” More than half of our respondents (56 percent) rated themselves “weak” in leveraging social media data, and 81 percent report that they are “not ready” or only “somewhat ready” to take advantage of this growing trend.

There are some well-defined markets where the use of personal data is likely to grow quickly. In 2015, millions of people will be streaming data about their location and perhaps even their heart rate to public websites. Just as individuals may use tools like FitBit for their personal well-being, workers could collect and share information to become what some have called “the quantified employee.”⁴ Businesses using this information are gleaning key insights. Hitachi’s “Business Microscope” product, for instance, which uses employee ID cards to monitor location, enabled the company to discover that engineers who eat lunch in larger groups are more productive.

One stumbling block to capitalizing on externally sourced information is that many companies do not know who owns employee data, whether internal or posted publicly. In fact, 46 percent of the respondents to our survey think their company owns employee data, while 43 percent believe data is jointly owned with the employee. More broadly, data privacy, protection, and security are a growing concern. Many companies, for example, find their internal memos leaked and posted online. As a result, HR organizations entrusted with more people data must be even more vigilant about privacy, security, and confidentiality training.

Shifting attitudes toward transparency—driven in large part by Millennials’ expectations—will also play a significant role in answering key questions around who “owns” HR data. In fact, one in four respondents to our survey said that their employers now give employees full transparency into the data they collect.

Lessons from the front lines

AOL, one of the original brands associated with the Internet, is now a major media technology company with approximately 4,500 global employees, owning such brands as The Huffington Post, TechCrunch, Engadget, MAKERS, and Mapquest. As one might imagine, technical and creative professionals at AOL (now headquartered in New York City) are in great demand. People who come to AOL also have the opportunity to work at Google and a variety of start-ups in the New York area.

The company has invested in talent and people analytics for many years, and has recently started to focus on understanding the factors that drive people to stay with the company or leave. Leaders realized that the biggest drivers of retention are not always compensation and benefits, but a variety of intangible issues, including other job opportunities available, the brands and positions at competing companies, and the skills and experience of their people.

“For applications like predicting flight risk or understanding the drivers of retention, our experience shows that public data can be significantly more predictive than internal HR data about people.”- Darren Kaplan, CEO, hiQ Labs

To understand this issue, the company has embarked on a program to leverage external, publicly available data about the demand for jobs and skills. Working with San Francisco-based start-up talent analytics firm hiQ Labs, AOL is now carefully looking at patterns among people who leave, what factors might entice people away from AOL, and what benefits and improvements the company can implement to help it attract people with top skills. The head of people analytics, John Callery, believes that this focus on “people data everywhere” is giving the company a whole new perspective on ways in which it can better attract, engage, and excite current employees and technical leaders. The company’s experience working with hiQ Labs already shows that external data is a powerful way to predict and understand retention and to find ways to further engage the workforce.

As Darren Kaplan, CEO of hiQ Labs, states, “For applications like predicting flight risk or understanding the drivers of retention, our experience shows that public data can be significantly more predictive than internal HR data about people.”

Where companies can start

• Partner with marketing: Marketing teams are already solving the problem of monitoring, leveraging, and managing external data. They often have tools and processes in place to find and monitor data about companies and their people.
• Buy and access tools to tap into major social networks: Tools that explore LinkedIn, Twitter, Facebook, Glassdoor, and other networks are mature and available today. Companies of all sizes should investigate these tools and become comfortable with the use of external data for sourcing, recruiting, and monitoring their employment brand.
• Recognize that the drive for transparency is here to stay: While compensation and employee engagement data, though increasingly visible through services such as Glassdoor, is not yet public, it is possible to see such data becoming available outside a company in the future.

Bottom line

External data about candidates, employees, and potential contractors are now available throughout the Internet. These data make up a critical part of a company’s strategy to understand its employment brand, identify strong candidates, understand employee engagement, and predict and try to reduce flight risk. This year, organizations should upgrade their focus on the use of external data within HR, as it has become a fast-growing part of the HR analytics strategy.