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The Next Generation HR is a Data Driven HR

The last decade has brought a lot of changes to what is expected from the Human Resources function and an accelerated evolution to what is called the “new generation” HR. Few companies today remain unaware that HR can no longer exist as a support function and even the much-cited “earning a seat at the (executive) table” is getting history, as it becomes clearer every day that excellent HR is more about “owning” that table. Both HR professionals and business leaders need to understand that HR is about a set of results, not about HR. What the business requires from HR is to build a set of integrated solutions, move away from the traditional role of executing HR processes, and use these processes and solutions to accelerate business and create a competitive advantage. To achieve this shift from activities to business-relevant outcomes and create a more agile organization in the process, the HR organization needs to:
  • encourage new ways of working, 
  • learn to collaborate cross-functionally and respond faster to changing business priorities, 
  • tap the potential of new technologies and 
  • leverage advanced data analytics to give relevant insight and inform business decisions.
Getting data-driven starts with getting data ready. With an enlarged focus on driving higher productivity, as well as engagement, the HR new function must look beyond basic employee metrics to harness nuanced insights on individual working preferences, career goals, and turnover risk. With latent talent shortages and highly dynamic markets, the HR organization must also focus on continuous reconfiguration to stay current with the marketplace.  In the HR professional’s new role, business literacy and quantitative acumen will become even more important. They will need to collaborate closer and more frequently with Operations and Finance peers, interpret the HR data analytics side-by-side with data from these groups, and contribute with data-driven insights. A data-driven HR function that can make fact-based decisions, predict workforce trends, and flag areas of concern is critical to creating a people-first organization that aligns with employee needs. Thus become not only another stakeholder at “the table”, but provide leaders that are key strategists and decision-makers in a world of work that truly demands their knowledge and insights.

What is the problem then?

The people analytics revolution has been discussed for a decade now, expecting it to bring us in a new era for HR. But so far, the revolution is for an elite few, not for the masses. Too many companies say they still need help with putting basic people analytics into practice while too many HR departments are still stuck struggling with the basics.  The most cited reasons for this situation include:
  • HR has more data than ever before but lacks knowledge on what to measure or what to do with the data 
  • Poor data governance entails dealing with excessive, unintegrated, unreliable data
  • Analytic capability to turn data into insight is insufficiently developed within the HR teams
  • Cloud solutions and cutting-edge technology to enable streamlined and automated HR processes are expensive
Hopefully, this is about to change as 73% of companies declare that improving people analytics will be a major priority for the next five years. Some changes are already in sight, including:
  • A new profile of the HR professional is emerging and a brand new set of competencies are required, as shown by research led by LinkedIn that indicates a significant increase in HR professionals with data analysis competencies.
  • Over the last five years, the research showed a 242% increase in HR professionals with data analysis skills.
  • Companies have realized that starting small is ok. Value is added right away by combining reliable data with metrics that matter, while also preparing HR for advanced analytics in the future. The experience of these companies give us some insight on where to start:
    • address first the issues of data governance, analytic capabilities, and building a data adoption culture. With the implementation of limited, but targeted data governance mechanisms, many companies have managed to ensure the right data is being collected at the right level of accuracy.
    • a data plan should start with identifying metrics that matter to produce a report or dashboard that actually fits the intended purpose of tracking progress toward an objective, a critical workforce trend, or to inform a specific workforce decision. 
    • reports and dashboards should be less ambitious and more focused on the most important talent issues, so the number of metrics should be limited to 20 wherever possible. Small, easy to understand dashboards that drive action can produce a big impact.
Fulfilling the promise of the Data Driven HR is not easy and the challenges are real. Embrace it as being the unavoidable future and accept that more often than not the biggest obstacles are not of a technical nature, but cultural. And the main one is the way HR still regards itself as being a non-business function, while all success stories prove that HR excellence starts and ends with a deep understanding of business.
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