Where will you find your analytics talent?

Where Will You Find Your Analytics Talent?


October 2012

Time was running out, and the company had few options left. Its big strategic push to beef up its analytics capabilities was stalled: There simply wasn’t enough talent where it was located—the United States—to meet its needs.

To close the gap, the company turned to recruiters in China and India, only to find that the competition for top analytics talent was extremely tight in those countries too. Freshly minted Ph.D.s were being courted by dozens of global and local companies. On the other hand, many of the new graduates with bachelor’s or master’s degrees in quantitative disciplines did not have the necessary language or technical skills, or were not willing to move halfway around the world and so were opting for jobs closer to home.

The company pressed on, using temporary, freelance help—but in the end, it had to face the fact that what had been envisioned as an 18-month analytics initiative was now more likely to take three years to implement. And that was simply too long for its strategic needs.

The example is fictional. But the likelihood that many companies could be facing this kind of crisis in the very near future is all too real.

The use of business analytics is spreading fast, bringing enormous benefits to companies in industries from natural resources to electronic media. But as new research from the Accenture Institute for High Performance demonstrates, when it comes to analytics talent—people with the ability to use statistics, quantitative analysis and information-modeling techniques to make business decisions—a critical mismatch between supply and demand is looming.

In many countries, companies can no longer rely on universities to provide a pipeline of people with strong math and statistics skills. There are notable exceptions, however. According to our research, many developing nations are turning out greater numbers of graduates with degrees in quantitative fields, producing an increasing share of the world’s analytics talent. As with the fictional example above, companies will need innovative skills and sourcing strategies to secure the talent they will need.

A new role
Why the premium on analytics talent? Analytics is moving from a secondary role in business to the core of many key decisions and processes. In a recent survey of 258 North American business leaders conducted by Accenture Analytics and SAS, 72 percent of respondents said they would increase spending on business analytics in 2012 over 2011 levels.

The growing importance of analytics is most obvious in the industries that have always relied on that discipline, such as financial services. Banks, for example, are hiring more risk managers to guide new-product development in a way that does not jeopardize credit ratings. Insurers increasingly rely not just on actuaries and investment modelers but also on analysts who can help the company improve customer acquisition and retention.

Also at the forefront of this trend are industries where analytics has recently become a strategic capability. Energy companies, for example, used to hire analysts mainly for forecasting supply and demand. Now they rely on them to find new sources of oil and natural gas, to boost the efficiency of drilling programs and to improve such processes as workforce planning and equipment maintenance.

Even sectors where analytics is still in its infancy recognize it as critical for future growth. Companies in the electronics and high-tech industry, for example, are eager for people who can help the entire organization understand emerging customer segments and improve marketing efforts.

In addition, the burgeoning demand for analytics capabilities means that many companies will not be able to meet their needs solely with in-house talent. This means that more and more advanced analytics work will be sourced externally from companies in the growing business analytics services industry.

Accenture recently completed a yearlong research project that looked at job creation and skills availability in the market for analytics talent; the research covered six industries, including banking, insurance, pharmaceuticals, oil and gas, communications technology and business analytics services (see Sidebar). Based on our findings, we project that employers in these industries will add 117,600 analytics jobs between 2010 and 2015 across the seven countries we studied (see chart).

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The business analytics services industry will add 30,500 of those new jobs, more than any of the other industries in our research. Although this $50-billion-plus industry has largely been centered in the United States and Western Europe, it is fast expanding to the rest of the world. More than half of the new analytics jobs in the business analytics industry will be in India.

Although the United States will create nearly 39,000 of the new analytics jobs during that period, India, China and Brazil are all growing their analytics workforces at a faster clip (see chart). At the current rate, in just over a decade, India and China will employ nearly half of all the analytics talent in the industries studied. Brazil and Singapore have a small portion of the analytics jobs in these industries, but they will hold onto their share over time. Put another way: The United States, the United Kingdom and Japan are all slowly losing ground.

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Consequences
These shortages will have severe business consequences. According to Peter LaCross, vice president of human resources at C.R. Bard, the multinational medical products company, “If we don’t have the right engineering and scientific skills, we face product delays of up to 36 months. But we struggle to find these skills; the nature of science has evolved to where the complexity and amount of knowledge needed by an individual is enormous—and this is hard to find.”

As the use of analytics becomes more pervasive, companies need a variety of analytics talent to help drive a broader range of business applications. The greatest number of workers will be in the category of analytics specialists—those who take the output of analytics models and algorithms, combine that with their specific business knowledge, and generate insights and decisions.

At a higher skill level are the analytics experts. They more directly apply modeling and statistics to business needs, translating technical language into something the rest of the enterprise can understand.

The most highly skilled are the analytics scientists, who usually hold Ph.D.s or other advanced degrees in quantitative fields. These workers design detailed models to distill insights from the chaos of data. They are adept at a range of techniques, including trend analysis, classification algorithms, predictive modeling, optimization and simulation. They also employ advanced data visualization capabilities to represent and interpret big data sets.

Looking at the range of these positions across the industries and nations in our research for the period from 2010 to 2015, we see two types of supply/demand mismatches that are of particular concern.

 

Critical global shortages

The first is a projected general global shortage of analytics scientists. In almost all of the scenarios we analyzed, the set of seven countries studied will experience a net shortage of Ph.D. graduates qualified for analytics scientist jobs. The United States, the United Kingdom, Japan, Singapore and Brazil will almost certainly experience significant shortages of this top tier of talent. India, with its booming analytics services industry, will also struggle to produce enough new Ph.D.s to fill all the new analytics scientist jobs. Shortages are also possible in China if demand for analytics accelerates (see chart).

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If employers are to fill all of the new analytics scientist jobs in these seven countries, they will need to attract more than twice as many of the available, qualified Ph.D.s to business analytics roles as they do today. Given the high and growing demand for life scientists, computer engineers and software programmers, the odds that employers can do that are slim.

 

Local shortages amid global abundance

The second mismatch is with analytics experts. For these positions, the problem will be different from what we expect for analytics scientists; instead, the problem is that talent will not necessarily be produced in the regions where it is most needed.

Among the countries studied, the United States is projected to create 44 percent of the new jobs for analytics experts but only 23 percent of the supply, leading to a shortfall of nearly 32,000 workers. The shortfall in Brazil will be nearly 19,000 workers because the country will create almost 5 percent of the new analytics expert jobs but produce less than 1 percent of the new talent. On the other hand, India and China will have surpluses of more than 72,000 and 18,000 analytics experts, respectively. The United States is projected to create 44 percent of the new jobs for analytics experts but only 23 percent of the supply, leading to a shortfall of nearly 32,000 workers.

Companies looking for analytics specialists—a category that represents by far the largest population of analytics talent—may very well encounter global shortages. However, even if global supplies are sufficient, location mismatches will be a problem. Eighty-six percent of new analytics specialist jobs will be in the United States, the United Kingdom and Japan, yet 74 percent of the new analytics specialists will be produced in India, China and Brazil.

There are no quick fixes when it comes to closing the analytics talent gap. Therefore, companies should begin now to plot out their strategy for finding the talent they need to compete and win. Based on our research, here are some practical steps organizations can take.

 

Raise awareness, especially among university recruiters

We estimate that as few as 10 of every 100 qualified graduates accept jobs specifically identified as analytics roles; the other 90 tend to choose jobs such as investment bankers, consultants, software developers, professors or scientists. If employers could realize an increase to, say, 20 percent, the result would be an additional 94,000 analytics professionals in the United States, 22,000 in the United Kingdom and 19,000 in Brazil.

Employers can do a great deal here to increase their share of the supply pool. How so? Today’s graduates choose non-analytics jobs over analytics for a variety of reasons. While the choice sometimes comes down to personal preference, too often it is lack of awareness of the opportunities in analytics. The recent enthusiasm for analytics is only slowly filtering down into university recruitment. Employers can and should raise awareness about the career prospects of analytics jobs.

 

Make analytics jobs more attractive

A bigger challenge will be to change the unappealing aspects of the job that push qualified talent to pursue other options. Analysts want work that allows them to use their highly specialized skills, stay current with the tools and technologies of their field, and do important work that contributes directly to the organization’s goals.

Perhaps the biggest complaint analytics pros have about their jobs is spending too much time on simple analyses and report generation instead of building and refining analytical models. If the business is not demanding important analytics work, the best analysts won’t be drawn to the company. Employers need to define roles and allocate tasks in ways that offer analytics talent challenging work. If  the business is not demanding important analytics work, the best analyst won’t be drawn to the company.

Grouping analysts together can help companies make analytics jobs more attractive. Companies that can offer analysts the chance to work with smart and capable colleagues have less trouble securing top analytics talent. At Independence Blue Cross, the Philadelphia-based health insurer, the company’s internal “informatics organization” plays a critical role in attracting and retaining analytics talent. Dr. I. Steven Udvarhelyi, executive vice president of health services, calls the group “a defined center of excellence. It creates a fertile ground for people to work with other people. It creates a critical mass where you get career opportunities, growth opportunities and good professional interaction.”

 

Create more flexible career paths

Companies should develop flexible career paths for analysts rather than shoehorning them into models more appropriate for different, less specialized work. To have clout in many organizations, you have to be a line director. As a result, analysts with very rare skill sets are either funneled into management positions they don’t actually want or are left sitting in the same job for 10 or 15 years. The challenge is to create senior analytics positions so that scientists feel a sense of professional growth without feeling pressure to advance up career paths they perceive as limiting. Customizing career paths can help an organization attract and retain top analytics scientists.

Jim Heffernan, CFO of the Massachusetts General Physicians Organization, says that it’s a big challenge to avoid setting analysts up for failure by promoting them according to the organization’s standard career models. Many of the most technically adept analysts don’t want to manage others. To retain these valuable analysts, Heffernan’s organization is creating a compensation and promotion system that will allow great analysts to remain individual contributors without direct reports and still be eligible for pay increases and promotions.

 

Work to influence national policy on retaining non-nationals

A large proportion of math and science students in developed countries are foreign nationals, especially at the master’s and doctorate levels. In the past, many stayed abroad and took jobs in their adopted countries. However, because many developing countries have made impressive economic and social advances, more of these students are now returning home after graduation. The United States will likely lose about 3,000 Ph.D.s in fields relevant to analytics between 2010 and 2015 due to migration.

Countries are already acting to influence migration flows to their own advantage, especially in the developing world. China’s “Thousand Talents” program seeks to lure back Chinese-born scientists and engineers currently in the United States and other countries. Host countries, though, are also creating more work visas and other mechanisms to retain foreign-born math and science graduates. Technology companies in the United States have long lobbied Congress to expand these efforts, and other industries are likely to join them.

 

Seek reforms in educational curriculums

Companies can work within their own countries to increase the number of qualified graduates. Countries themselves can do this by improving the general quality of primary, secondary and post-secondary schooling and by improving English-language training. This would have the largest payoff in developing countries. Organizations can also build stronger bridges from community colleges and vocational-technical programs to analytics career paths. For example, US colleges award 50,000 associate degrees each year in fields relevant to analytics.

Companies can also encourage universities to add courses in analytics within business programs, either as common core requirements or full-fledged minors. In this way, countries could generate a substantial number of graduates with sufficient background to work as analytics specialists.

 

Work with labor market intermediaries

Developed- and emerging-market companies alike will need to find and gain access to talent around the world. Companies face twin challenges as they navigate a global labor market: an “information problem,” in which they often lack the information about where skills are located, and an “access problem,” in which they may know where skilled workers exist but have difficulty hiring them.

Intermediaries that facilitate the match between “sellers” and “buyers” are emerging in places where there is an existing mismatch between demand and supply. Already, some labor market intermediaries are seeking to certify analytics talent (officially or unofficially) by providing formal credentials. For example, the Institute for Operations Research and the Management Sciences (INFORMS) will be the first professional society to offer certification specifically aimed at analytics talent. And online social networks for analytics professionals, such as AnalyticBridge, are offering explicit or implicit endorsement of the background and experience of analytics talent.

Some intermediaries will attempt to consolidate analytics talent (either through platforms such as Kaggle or networks such as YourEncore) to create a single source for project-based access to skills. Still others (for example, StatsCareers.com, oDesk Corp. and Y-Axis Overseas Careers) will help connect employers with talent for long-term or project-based employment—a global spin on a traditional role for intermediaries.

Whether these labor market intermediaries will be a transient phenomenon—lasting only as long as it takes companies to sort out their analytics talent sourcing strategies—or a permanent feature of the market remains to be seen. What is clear, however, is that analytics talent is a global labor market. How this global market behaves will be a kind of forerunner for what is likely to occur in other critical skill segments in the years ahead.

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With analytics becoming a crucial component of innovation, new-product development, customer insights and corporate decision making in many industries, companies must increase the supply of analytics talent flowing into their organizations. Demand is rising and supply is not keeping up—nor will it be able to keep up in the foreseeable future.

Finding, acquiring and retaining top analytics talent will require innovative skills and sourcing strategies to address mismatches. But companies that make that investment will achieve a competitive advantage over rivals who find their growth strategies frustrated by a shortage of analytics capabilities.

 

For further reading
“Where will all the STEM Talent Come From?”
"Solving the skills crisis,” Outlook 2011, No. 3
"How to turn data into a strategic asset,” Outlook 2010, No. 2
"Counting on Analytical Talent”

 

Sidebar | About the research
Staffing and deployment also look very different with agile organizations. Rather than locking employees into long-term roles and then waiting for relevant work to arise, a more leading-edge approach is to assemble teams that are the right fit for a particular need—and then to disband and reassemble a different team for the next need.

For the demand side, we focused solely on job openings created by economic and industrial growth and excluded replacement hiring. On the supply side, we focused on fresh talent coming out of universities with bachelor’s, master’s and Ph.D. degrees in math, statistics, operations research and other quantitative fields. (Back to story.)

 

About the authors
Elizabeth Craig is a Boston-based research fellow with the Accenture Institute for High Performance.

David Smith is the managing director of the Accenture Talent & Organization management consulting group. He is based in Hartford.

Narendra P. Mulani is the managing director of Accenture Analytics. He is based in New York. .

Robert J. Thomas is the executive director of the Accenture Institute for High Performance. He is based in Boston.

The authors would like to thank Jeanne G. Harris, Brian F. McCarthy, Smriti Mathur, Charlene Hou, Eduardo Dubin Domínguez and Ashish Mishra for their contributions to this article.

 

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 This Article is Tagged: Talent and Organization. Analytics.
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Where will you find your analytics talent? | Accenture Outlook 
As companies search for top people to staff their moves into analytics, they are encountering a critical mismatch between supply and demand. A number of practical steps can help organizations address what has become a global challenge.
analytics, human resources
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