HR data and analytics drives profits but at what cost?

By Neil Patrick

HR analytics can punish your employees, but you won’t worry about that if you want to win.

In his 1976 book, 'Computer Power and Human Reason: From Judgment To Calculation', author Joseph Weizenbaum laid out the case that while artificial intelligence may be possible, we should never allow computers to make important decisions, because computers will always lack human qualities such as compassion and wisdom. Weizenbaum made a crucial distinction between deciding and choosing. Deciding is a computational activity, something that can ultimately be programmed. But it is the capacity to choose that ultimately makes us human. Choice, however, is the product of judgement, not calculation.

Stephen Hawking went even further when he said,  "...the development of full artificial intelligence could spell the end of the human race. Once humans develop artificial intelligence, it will take off on its own and redesign itself at an ever-increasing rate. Humans, who are limited by slow biological evolution, couldn't compete and would be superseded."

I cannot say if this distopian vision will or will not ever manifest. But it is plain to anyone that we are racing down this path with scarcely any care. We are already seeing the first applications of big data and AI based workforce decision and management systems. HR leaders like it because it promises to solve several of their most longstanding and vexing problems.

HR has been fed up forever about not being taken seriously. HR big data and analytics promises to be their saviour. It suggests that HR can transition from being perceived (wrongly in my view) as fluffy and utilitarian to having a proper seat at the leadership table, because like its rivals in finance, sales and marketing, it can now deploy hard ‘scientific’ data to back up its proposals.

It also promises a happier, more engaged workforce. One in which every twist and turn of employee sentiment can be quantified and responded to. If the data says people are feeling worse about something, HR can know this quickly and help rectify the problem.

I wish this were true. But I fear the opposite. That’s because every technological advance includes the option of being deployed for good or evil.

What HR may not like so much is that HR data delivers an extremely useful tool for business leaders to push and punish people. It’s a deal with the devil, in which HR’s quest for happy, engaged workers, risks being hi-jacked by the rest of the business to brutally force up productivity and drive down cost.

Incidentally, my argument skims over the very real practical questions around HR data and its inherent unreliability as Marcia LaReau has convincingly described here in her post, ‘To a Hammer, Everything is a Nail’.

Business has some critical problems today. Growth and profitability are chief amongst these. And countless studies show there is little correlation between hard profit and employee satisfaction. Sure there are plenty of examples of firms growing successfully who also invest in their people. But when we look at the most established large firms who are making the most money, most care much less about their people.

This is actually a very simple economic truth to understand. In an open competitive market, whoever gets the most work done for the lowest cost, wins. And if that means some people suffer, then so be it.

Every employee survey I have ever seen identifies that a person’s manager is the single greatest determinant of job satisfaction. It’s not pay, it’s not perks, it’s not flexible hours. It’s the person who manages you. If they are inspiring, caring, transparent, supportive, their staff will enjoy their work.

But here’s the problem. Managers that display these qualities are becoming an endangered species. Because their bosses usually don’t care very much about strategic HR. They do care about smashing their immediate revenue and profit targets. HR gets people hired for them, sorts out people issues and keeps them out of court. Everything else is fluff.

It’s that simple. Good leadership (not data) delivers happy and productive teams.

But we also know that good leadership is a frustratingly elusive and expensive resource to acquire and maintain. One accidental bad hire of a psychopathic manager and the whole of an organisation’s carefully nurtured culture can be demolished in a few months.

So if good leadership is expensive and scarce, but data is cheap and plentiful, the choice becomes a no-brainer.

What is becoming visible now is that there are firms who take HR data very seriously. And what we can also see is just how punishing and dehumanising the application of HR data can be in practice. To verify this, all we need to do is examine the firms where HR data is most developed and embedded in the day to day operations of the organisation.

And right now, probably the most advanced organisation in this field is Amazon. In January 2019, Amazon became the world’s third most valuable company by market capitalisation, after Apple and Microsoft.




Yet in some US states, nearly one in three Amazon workers are on food stamps. For Amazon, this is even better than paying people almost nothing. It is the transference of part of Amazon’s wage bill to the taxpayer.

In Amazon warehouses, every second of people’s work is measured and evaluated. They may walk over twenty miles on a day’s shift. Their productivity is tracked and ranked against their peers, with whoever is at the bottom of the table likely facing disciplinary actions and threats. A toilet break can cost you your job if it exceeds a tightly prescribed time allowance. Many describe it as a daily hell, which they endure only because they have few other options.

Welcome to the brave new world of HR big data. It’s being corrupted from the get-go. And if you’re an HR leader, be careful what you wish for.