Book Review: Gene Pease,Boyce Byerly and Jac Fitz-enz,Human Capital Analytics: How to Harness the Potential of Your Organisation’s Greatest Assest

Role of human resources is witnessing an unprecedented change. With the advent of big data and analytics, HR professionals are embracing analytics to quickly walk on the path of adding significant strategic value. Dr Jac Fitz-enz, a highly respected authority on strategic HR measurement and author of The New Human Capital Analytics, asserted that the field of human resources and human capital management is evolving beyond descriptive HR metrics to predictive management. With the dawn of big data, corporates have realized the value of intangibles most of which is human capital of one form or the other. The book focuses on a very relevant, new and understudied topic of Human Capital Analytics. Most of the other functions in the organization use data to evaluate the impact on business outcomes for instance marketing, finance and operation; however, HR has somehow not used it at par with their peers. Human capital analytics or talent analytics has recently picked up momentum.

The book is built on the work of Jac Fitz-enz, father of Analytics in HR. He was the first one to talk about measurement of HR processes and practices, however, at that time it was not received positively. In this era of knowledge workers and big data, the book and concept has gained more relevance.

Analytics is a complex phenomenon and when used in the context of human beings it becomes all the more complex. The focus of the book is on predictive analytics which not only measures the past and impact but also predicts the future investment zones. The flow of the book is well thought out. Key take away from the first chapter is the continuum of human capital analytics which has been categorized in seven stages, namely, anecdotes, scorecards and dashboards, benchmarks, correlations, causation, predictive analytics and optimization. Lowe’s case study of value linkage analytics which links employee engagement to business performance is helpful in understanding the depth and reach of analytics. The second chapter highlights the significance of alignment and helps in understanding what it means and why it is important. It suggests to align analytics with the strategic outcomes of business to create an impact. Art of asking relevant questions and concept of leading indicators in another interesting feature of this chapter. The third chapter focuses on planning how to go ahead with the measurement process, the action plan. The fourth chapter is all about the data; it describes the various sources of data, importance of privacy and ethics when dealing with sensitive employee data. The fifth chapter is devoted to the foundation of data analysis, that is, the descriptive statistics and correlation. Next chapter differentiates between correlation and causation and introduces statistical measurements like model fit and statistical significance. Chapter seven has a unique offering and talks about moving from ROI to optimization. Optimization is a prescriptive analysis that identifies where investments are most needed and the intelligent allocation of those investments. ROI is in a way backward looking, whereas optimization is forward looking. Five key aspects of optimization have been discussed, namely, segmentation, mixture, saturation, metric interaction and timelines. Optimization is about improving future work. Next chapter focuses on the presentation of data and analysis. The authors prescribe pyramid shape spearhead approach which has detailed report at the base, executive summary in the middle and elevator pitch at the top. Final chapter includes summary of previous chapters and experts perspective on the future of Human capital analytics. All the appendices of the book are quite informative and will help a beginner in this field to get into action. The first appendix summarizes various forms of measurement models, next appendix suggests how to clean and prepare the data for analysis, next two appendices give overview of statistical techniques and last appendix discusses qualitative data collection technique.

The book has limited usability for researchers and academicians as the authors have not touched upon any theoretical aspects. It is a good book for practitioners who are about to begin their career in analytics or are already working in the industry. Most of the chapters have case studies to illustrate the concept and understand how it is used in the real world. This book will help practitioners in understanding the power of optimizing future investments. It will additionally help in knowing how HR investments are performing and how they can be improved further.