Editor’s note – This is the 1st of a two-part post. Lately, I’ve been a participant in a tremendous number of “debates” where the topic is “to what degree, if at all, does data, metrics, and analytics, play a role in the ongoing success of the HR profession – including the adoption of Big Data?” In this post, I talk about the connection between being viewed as strategic and the use of analytics. Next, I’ll give guidance on why HR should pursue becoming the data-centric function it needs to be.
I recently attended the 2013 HRO Today Forum presented by the HR Outsourcing Association. This year’s conference was the best-attended in its history. This industry event brings together HR thought leaders, practitioners, and suppliers to focus on the best practices that will enable HR to deliver the highest possible business results. Entire sessions were dedicated to how HR can leverage the power of data and analytics to achieve those results. For instance, John P. McMahon, the CHRO of Cumberland Gulf, talked about how the combination of his business acumen, and his systems and data-savviness formed the basis of the skills that have underpinned his 30 years of successes.
There is a great deal of renewed focused on the connection between HR’s emerging role as a strategic business partner and the profession’s need to use any and all data, metric, and analytic tools at their disposal. In alignment with this theme, eQuest was honored by winning the HR Outsourcing Association’s prestigious Tektonic Award. Elliot Clark, CEO of HRO Today, said it best: “As we have moved from the era of technology to the era of information and data, workforce analytics have become the critical element in the management of HR.” Now, more than ever, HR needs to be able to make faster, evidence-based decisions and take quicker actions. Being part of the team that is making faster, smarter decisions is part of what will enable HR to develop and execute the people strategies that competitively differentiate their company in the marketplace.
HR has long desired to emerge from out of the compliance, paperwork, and transactional world. The profession has been seeking to become directly involved in the strategy and execution of running a successful business. Now, the overwhelming majority (over 79%) of HR executives report directly to their CEO. And yet, a recent study by the Economist Business Intelligence Unit revealed that while the majority of CEO’s desire HR by their side in a strategic role, only 38% of those CEOs are finding that HR is meeting those expectations. The survey revealed that many HR leaders are still focused on process and rules, don’t understand the business well enough, and are not developing strategic HR plans that align with the business strategy.
So, what’s the problem? Where are the lines of HR professionals who are clamoring to talk with their business leaders – providing critical business insights and recommendations derived from their latest analysis of the data? Nothing has been more strongly suggested to HR departments than the adoption and embracing of data and analytics. And yet, it is still considered the exception to find an HR organization that is living that dream.
In 2005, Fast Company’s “Why We Hate HR” article caused a stir as HR people were accused of not being “businesspeople” and how the function avoided taking on the truly strategic work of creating an HR strategy that aligned with the business. How ironic. CEOs want to integrate HR into the strategic planning of the company, and yet this is only being realized a minor percentage of the time. I would think that the profession would find it worrisome that such a large gap continues to exist – even now, nearly eight years after HR was publicly called on the carpet for it.
So, I started to think about what’s behind this continued aversion. It’s almost as if there is a mass delusion that the profession has fallen under – believing that if we ignore it long enough, hopefully it will go away. Dr. John Sullivan recently wrote about how Google was using “People Analytics” to completely reinvent HR. While the content was interesting, the comments section is where the real story lies. The majority of the comments were negative and demonized the idea of being so data-oriented – i.e. “Disturbing.. .Takes the Human out of human resource.” Another recent article posited the idea that the real reason HR hates analytics is because it increases accountability, which just leads to increased job stress and job dissatisfaction among HR professionals. Instead of throwing out these objections, what if instead HR were asking itself, “How long can the profession stay viable and relevant if it continues to not be viewed as business-minded, strategic, and evidence-based in its decision making?” Or, “I wonder how I could start getting my arms around this Big Data phenomenon and start figuring out how I can put its insights to use?”
Big Data is not just another fad. There are too many examples of critical insights and successes being realized in business, politics, and government. There are also a growing number of success stories emerging in the HR arena. Not only is Big Data about being able ask new kinds of questions, it is all about extracting critical insights at the pace of today’s business environment.
It may be cliché to say, but I truly believe that HR is at a crossroads moment. Does the profession continue to live up to its “gut-based” decision making reputation of being good with words but not with numbers? Or, does it take the plunge into the analytic pool and demonstrate that it can apply business intelligence to make a strategic contribution? The future is being set by the actions taken today. At best, staying the current course means the profession is likely to be split in two – i.e. a “people, compliance and operations-oriented function” and a “people strategies and business programs function.” At worst, the function splits, with the people strategies function no longer considered to be within the realm of HR.
The challenge for HR is how to maintain its role as the champion of the individual while at the same time remaining relevant by strongly stepping into the strategic role that the executive team is needing from their HR partnership. HR cannot be that “strategic” business partner without also becoming a more data-centric profession.