With more workforce analytics resources capable of processing “big data” than ever before, human resources (HR) departments are finding themselves in ever stronger positions in being able to identify workforce potential and drive businesses forward. They must beware, however, that such resources can often lead to data deluge, which can cloud important HR issues such as succession and leadership planning.

According to the 2013 Global Assessment Trends Report from talent measurement and solutions firm SHL, managing big data is one of the biggest challenges facing HR departments today.

Chris Frost, managing director at SHL Hong Kong, says the firm’s research shows that even though organisations generally measure employee performance, a focus on efficiency data – such as how well an employee is performing – is preventing them from making the right strategic talent decisions. Meanwhile, key information on future capabilities and talent potential is often overlooked.

“Effectively, this means programmes that identify the next generation of leaders and nurture talent for critical roles are ineffective,” Frost says.

There is also a tendency to miss the identification of development needs and critical experiences required to successfully transition leaders into their next roles. Ominously, Frost says, this increases succession risks by putting business performance and continuity in jeopardy.

SHL’s report, which surveyed 592 HR professionals worldwide, also reveals that 77 per cent of HR professionals do not know how workforce potential is affecting their company’s bottom line. Meanwhile, less than 50 per cent of organisations surveyed use objective talent data to drive business decisions.

The feedback also suggests that HR departments are being overwhelmed by a “big data deluge” of workforce information and are struggling to elicit meaningful insights that will help boost company performance. Despite the report seeing workforce planning and talent analytics voted as one of the top five HR priorities in 2013, only 44 per cent of respondents said their organisations use objective data on employees’ competencies and skills to make workforce decisions. Furthermore, only 18 per cent of HR professionals said they are currently satisfied with the way their organisation manages talent data.

“There is a great deal of room for improvement in using talent data to align talent and business strategies that link to desired business outcomes,” Frost says.

He adds that identifying relevant data sources can also help HR measure and improve the talent-management initiatives. To achieve this, he recommends prioritising objective data about employees’ competencies. Measureable organisational metrics are also required to examine how this can enable decision-making at individual, functional and organisational levels.

The report discovered that the top HR priority for 2013 was the need for employee engagement and retention, as reported by 55 per cent of respondents. In second was leadership development, with 52 per cent. Other top priorities include performance management, at 49 per cent, workforce planning and talent analytics, at 43 per cent, and training, at 42 per cent. These priorities top the list for both established economies, including Hong Kong, and emerging economies, including China.

One of the biggest differences found between established markets and emerging ones is that established markets focus more on succession planning, while emerging markets pay more attention to training. Frost says the different priorities reflect the contention between balancing short-term employee productivity and performance with the longer-term strategy of aligning talent to the needs of the business.

With the handling of big data an increasingly key issue for Hong Kong companies, Eunice Ng, director at Avanza Consulting Pacific, says her clients are talking about the challenges of hiring people with big-data management skills.

“It is not only big-data HR management skills that companies are looking for; they also need managers and information-system specialists to handle the big-data side of trading, sales, business-to-business retailing and other functions,” Ng says. “There is keen demand for experienced information-system specialists and people with a proven background in managing HR information systems.”

Big data and its impact on business was also one of the key topics at this year’s World Internet Developer Summit in Hong Kong. Speakers explored ways that big data can assist and improve business operations, including HR functions. Questions were also raised about the relationship between big data, privacy and security.