For years, HR professionals have been working for “a seat at the table”. Once that seat is achieved, however, how does HR bring relevant information to the executive team?
The same analytics that sales and marketing draw on to demand a larger share of the budget are missing from HR. Traditionally, HR has been able to provide little predictive information; thus, HR is only allocated 1 percent of the business intelligence budget, according to a 2011 Forrester report. Those HR professionals who are taking a larger share of the budget are doing it by providing HCM analytics that are predictive of the future of the organization and create actionable strategies for growth.
In a recent article for iHRIM, Brian Gaspar provided examples of the glut of information captured by government and private corporations on their customers and those who might choose not to be. For example, a person’s credit score is recalculated daily by credit rating companies such as FICO or Experian based on financial transactions. Every American over 18 who has ever dealt with debt has such a score. A less well-known fact is that “in 6 hours the NSA collects enough digital information on people, which if printed, can fill the Library of Congress, and these data mining and predictive capabilities were instrumental in finding and tracking Osama Bin Laden,” Gaspar says. Also, think of major sports leagues and their players, grocery stores with frequent shoppers—all leverage massive amounts of data to create predictive statistics. This practice of mining mountains of data has even reached the Fortune 500. Now, these companies are using Twitter, in combination with stock transactions, to predict their stock’s movement. If technology can find and correlate this kind of data, why aren’t HR leaders creating predictive reports for their companies to help refine their current talent pool and create initiatives to improve engagement, retention and hiring for the future? Technology and focus are two key issues holding many back.
A transition to HR technology is the first step—these analytics are not possible with homegrown or paper processes. While enterprise level adoption is as high as 85 percent for HRIS, talent management and recruiting software, less than 1 in 10 small businesses have implemented an HR system. Steve Boese, professor of Human Resources Technology at the Rochester Institute of Technology, states that the following three reasons are preventing greater adoption of HRIS:
These perceptions are preventing the necessary adoption of HR technology in many organizations. For those that do acquire and HR system, the HR professional must then focus on and produce the reports and analytics that are most necessary to the organization’s bottom line. Too much data provided by HR is not predictive or in-depth enough for executives. For example, Gaspar points out in his article that HR needs to know not only that five employees are leaving and must be replaced but also the why behind their exodus. “In 3 weeks Company was able to predict which top performers were predicted to leave the organization and why - this information is now driving global policy changes in how to retain key performers and has provided the approved business case to expand the scope to predicting worker performance,” Gaspar states. The most relevant HR reports for bottom line results are:
The only means to provide relevant dashboards and to-the-minute data is with a comprehensive HR solution. Performance management is a critical component in the mix.
The result of a combination of technology and analysis has been overwhelmingly positive. According to a blog by the Aberdeen group, “Aberdeen’s HR Executive Agenda found that 81% of organizations that utilize analytics are able to achieve organizational KPI’s.” Additionally, those results are often achieved quickly. In the case of this company’s previously discussed talent management strategy, the company saw the benefits in a recent move to keep top performers in only three weeks.
Those HR professionals who will not only keep their seat at the table but also put HR front and center in the business intelligence discussion are those who utilize the best HR technology and who can provide the predictive and analytical data needed to create positive change for the employees and the organization as a whole. If John Sullivan, HR thought leader, is correct, and the War for Talent is returning, is your organization ready to offer new recruits the BMWs of the past, or are you building a better organization that will engage them in the future?