People Analytics Helps HR Catch up With the Evidence

Human resources is following health care in weeding out gut instinct, intuition and cognitive bias in decision-making.

By Michael Housman

I have an unusual background in that I spent most of my time as an undergraduate and graduate student studying the intricacies of our health care system. In fact, I was trained as a health economist with a special focus on organizational behavior within hospitals and health care systems. Over time, my interests evolved. I went from studying organizational culture within hospitals to focusing purely on organizational behavior and labor economics across an array of industries, including call centers, retail, hospitality, and finance.

I mention this because I’ve witnessed firsthand a similar transformation occurring in both health care and human resources. I first became aware of evidence-based medicine approximately 10 years ago, shortly after undergrad, when I researched the evidence supporting treatments like cognitive behavioral therapy for traumatic brain injury. I learned that there is often no clear-cut treatment for a given condition. Instead, research accumulates over time, varying in rigor, until a sufficient body of evidence supports one treatment over another.

Eventually, large-scale reviews and meta-analyses evaluate this research within the context of its design and arrive at conclusions about what the evidence supports for a given diagnosis. This process attempts to systematize medicine so doctors practice consistently based on what research suggests is appropriate.

When this consensus does not exist, practice patterns can vary widely. One study found that the likelihood a pregnant woman received a cesarean section varied tenfold depending solely on the doctor and hospital she visited, holding all other factors constant. Evidence-based medicine aims to reduce such variance so that the same symptoms result in the same diagnosis and treatment.

We are now beginning to see this same transformation within human resources. The emerging movement known as “people analytics” seeks to remove gut instinct, intuition, and human bias from talent management, replacing them with evidence-based, data-driven decision-making.

Using the same analogy, if a job applicant interviews with interviewer A instead of interviewer B, that alone should not determine whether the applicant is hired. Instead, applicants should be evaluated rigorously and objectively to determine whether their knowledge, skills, and abilities fit the role.

The idea is identical: analyze data, conduct research, generate best practices around the workforce, and disseminate those practices so HR professionals can make decisions based on evidence rather than intuition.

Consider resume screening, a practice with a questionable evidence base. Research shows recruiters spend an average of seven seconds reviewing each resume, often looking for unusual work histories such as job hopping or long-term unemployment. Research conducted by my employer found almost no correlation between prior work history and future job outcomes.

In other words, filtering out job hoppers and the long-term unemployed is bad practice. It harms individuals and removes approximately 2 to 6 percent of viable candidates from the applicant pool.

Admittedly, this is just one study among many that should be conducted. But once enough evidence accumulates supporting this conclusion, recruiters should be educated and discouraged from unfairly penalizing candidates based on these characteristics.

This is the promise of evidence-based decision-making. It is gradually making its way into human resources, replacing gut instinct, intuition, and cognitive bias with data and rigor.

As a researcher and empiricist, I’m encouraged to see this paradigm take hold in another field. Just as evidence-based medicine benefits patients and providers, evidence-based human resources stands to benefit both employees and employers.