The Hitachi Example: Boosting productivity via data-driven solutions

Digitization has accelerated to various fields like finance, real estate, education, and advertising. Even though HR tech has been adopted worldwide, it is just taking off in Japan. After recognizing the growth in organizations that have embraced people analytics in HR, Hitachi was also motivated to adopt similar technologies into their operations. They decided to do so only after a thorough survey that was conducted with the help of AI and Big Data on the productivity of the employees. 

Data is used to reform HR

The HR landscape has been reforming for a few years now. In Japan, the need for workers has diversified and social issues related to working practices are being highlighted. All this is a result of the decrease in the available working-age population due to aging and low birth rate. Simultaneously, amongst all the advanced nations, Japan had one of the lowest labor productivity.

The HR departments at Japanese organizations are taking active steps to introduce technologies such as AI, Big Data, and Cloud for tasks like training, recruitment, placement, and assessment. There are three reasons why HR tech is receiving this much attention: 

• The progress made on various metrics provides a quantitative view of the performance and behavior of human beings.
• Worsening labor shortage due to the changes in the structure of society further injects urgency and hence increases productivity. 
• The emergence of moves to deal with the quality of work includes problems like long working hours and changing the work done by people.

HR's role in organizational growth shouldn't be overlooked. People management is a challenging and yet essential aspect of management. The policies by HR have a massive impact on the growth of the business, and with digitization, the quantitative data provides the basis of reforming HR.

People analytics helps in recruitment

Hitachi considers its staff as human capital and has followed various HR policies. But now with work style innovation like promoting good health, mental health initiatives and other leading-edge technologies such as Biz Terrace satellites, it now provides an efficient culture to work in, irrespective of the location. Moreover, people analytics is now a part of their recruitment process, which is an excellent start.

“In contrast to the commonly used applications that underpin HR operations, people analytics can be thought of as an advanced form of what HR is all about. Already adopted by numerous multinationals, it uses the collection and analysis of big data to help with things like recruiting talented staff and improving business performance,” says Junko Owada, Human Capital & General Affairs Division, Systems & Services Business Division, Hitachi, Ltd. 

The traditional recruitment process shortlists candidates with human bias. In response, Hitachi designed an HR portfolio by conducting quantitative data analysis of candidates. Employees are hired based on aptitude tests and qualitative data gathered from interviews. After recognizing the requirement for recruiting talented staff, Hitachi made significant changes in their selection processes inclusive of interviewer's training. Thus, in 2017, a significant shift was observed in the characteristics of short-listed candidates despite no change in the profile of applicants.

Encouraging individual insights help with productivity

Hitachi set up a People Analytics Lab in April 2017 to assess the benefits of using data. Junko Owada as Evangelist of the lab works on tools for visualization of points along the HR value chain; recruitment, placement training, and productivity. The lab develops surveys for white-collar productivity and employee placement. According to her, the productivity surveys are the second stage of HR tech. She says the key to overcoming international competitiveness, which has declined over recent years in Japan is in white-collar productivity. 

HR experts were asked to identify the characteristics of high performing employees. After analysis, six factors were recorded as boosters for productivity. 

• Willingness to take on challenges 
• Consideration for diversity (Factors associated with creativity)
• Understanding of roles
• Focus on results
• Level of organization
• Mental and physical balance (Factors related to efficiency)

The Lab is also creating services to support practical HR policies by using the company’s in-house AI technology. Such services will help conduct a more in-depth analysis of big data, such as HR data and activity log. According to Masaki Takamoto, Hitachi with a large workforce observes a variety of trends within. Similarly, diversity in their business means employing people in a wide range of roles. He believes that tech will be a great advantage for the company just like the quality and quantity of data is important for the development of data-driven HR tech.

Generate value that contributes to future work

In a survey conducted using AI, with ample in-house data, found that the productivity of people who did overtime towards the end of the week was low. With such data available, an organization can make realistic changes in management practices. The next phase of the project involves pursuing initiatives keeping in mind the future commercialization and expanding the range of surveys exceeding productivity and placement.

Hitachi describes data on employees as Treasure Trove, as it combines different forms of data to provide a view of people. HR Tech should deliver discoveries that would help build an environment that lets employees work energetically. 

As a leading player in HR in Japan, the People Analytics Laboratory will continue to develop new ways to increase the value of Hitachi and other Japanese companies, along with reforming them.