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HCM Big Data: Promises & Risks

Quick question: how much of the world’s data was created in just the past two years? The answer, according to IBM’s research, is that 90% of the data that exists today was created in the last two years alone.

Aside from the fact that it’s hard to wrap your head around that statistic, one thing is clear: We are pushing into fascinating new territories with the rise of Big Data. For a few years we talked about Big Data, but now we’re starting to live Big Data. All of this has fascinating repercussions for Human Capital Management. A recent Forbes article examined the topic and caused me to ponder: Will the massive amount of HCM-related Big Data be a boon or a curse, a mine or a landmine? Here’s a few perspectives, which may answer the question:

Key Performance Indicators

With access to massive amounts of HCM data, imagine that HCM leadership can finally substantiate both historical and ongoing Key Performance Indicators. What’s our historical and ongoing turnover rate by department? How long does it take us to recruit and onboard? What skills and competencies are we most lacking, and how much is it costing us to close those gaps? The real potential exists to finally build tangible, fact-based KPIs within the HCM world.

Return on Investment

Now, take those KPIs a bit further and link them to the financial data that is also part of our Big Data universe. Determine the turnover rate by department, and cross-analyze that by departmental profit and loss. All of a sudden we gain insight into potential sources of causality. The data may support (with a hard-dollar sort of resolution) the idea that departments with higher turnover rates suffer in their financial performance. With the help of HCM Big Data, we may also be able to definitively establish in black and white that departments who demonstrably lack the necessary competencies also definitively perform poorly on financial measures. And then, understanding the performance-financial linkage, we’re able to truly understand how HCM solutions and initiatives generate (or fail to generate) a suitable Return on Investment. Imagine having four years of HCM data and Financial data with strong factual correlations between the two, and being able to use those correlations to predict future results. That’s powerful, and that may be able to solve the challenge of HCM ROI once and for all. But dangers exist. Consider the following challenges.


By its very nature, financial data tends to be impersonal. It’s dollars and cents, products and SKUs, bill of materials and finished goods. But HCM data, by its very nature, is very personal. And as very personal data, it should be held for internal use with the highest degree of privacy. But it isn’t hard to imagine a scenario where those who are slicing and dicing data, and cross-referencing it to personal or corporate performance, can be exposed to personal employee data such as performance, salary, benefits, disciplinary actions, promotion data, etc. Will such powers of Big Data analysis be held only by those in the HCM community, or will Finance also gain such visibility, and at what level of granularity? These are questions worth asking and developing a strategy to address.


It seems that hardly a week goes by without another story of another company experiencing a security breach from outside their organization, and thus thousands or millions of customer details are leaked into the murky darkness of the internet. As bad as such leaks of customer details are, imagine the potential leakiness of an HCM Big Data universe. All the terrible details are there: social security numbers, names, birth dates, employment history and pay details, and the list goes on and on. Undoubtedly, for those who operate in the shadows, the HCM Big Data universe for any major corporation would be huge jackpot. However secure customer financial transactions should be, I would argue that employee HCM details ought to be at least 10x as secure. Imagine how much harder recruiting becomes when your organization is the poster child for HCM employee data loss.

Opportunities Ahead

We are just now beginning to wrestle with the realities and challenges of our new Big Data world. The possibility of HCM Big Data is both exciting and slightly terrifying. But this much is sure: those organizations who learn the right way to leverage HCM Big Data, and learn how to maximize its potential for good — will surely reap a great reward. Here’s how to get started:

  • Are we capturing the real potential of HCM Big Data?
  • Are we mindful of the dangers?
  • How do we define HCM return on investment? How can HCM Big Data help us prove the value of HCM?
  • What KPIs have we defined, and have we found a way to correlate these to HCM ROI?
Tags: Human Capital Management