Optimize Your Greatest Asset -- Your People: How to Apply Analytics to Big Data to Improve Your Human Capital Investments

Chapter 1The Need for Measurement in a Changing Environment

Have you ever heard of a company requiring a business case for investing in marketing? Or having a sales force? For that matter, what about training? Although specific budgets require justification, you'd be hard pressed to find a business leader who doesn't believe in developing the company's human capital. We dream of a day that the same will be said of measuring investments in human capital. From our perspective, as well as that of a growing cohort of HR and business leaders, evaluating these investments and using that intelligence to improve them is simply common sense. This day is coming, but for now such measurement is still seen as a competitive advantage—or worse, something nice to have but just not worth the trouble.

As this is my third book, written after practicing human capital analytics for over 10 years, I've written extensively on the justifications for measurement. For those of you who haven't yet seen the light, I present the arguments here again.

Analytics Give Companies a Competitive Edge

Recent studies by Deloitte and Bain have proven that the more advanced an organization's analytics capabilities, the greater the margins by which they outperformed their competitors. We'll go into more detail on these studies in Chapter 2, but for now suffice it to say that HR analytics can directly impact a company's bottom line. The Bain study in particular looks more broadly at the impact of analytics applied ...