Big data: powering big business outcomes
From the rubble of an escalating business data landslide comes a previously undiscovered opportunity to drive forward organisation outcomes. In the right hands – the Human Resources Department – it could be very powerful.
Keeping up in a fast-evolving world hasn’t always been easy for a traditionally transaction-bound and complexity-ridden department like HR. As the transactional aspects were streamlined, the volume of data increased – in part because that effort captured even more information. So more systems were brought in, each focused on specific transactions. That worked. But these best-of-breed systems, being mostly independent, typically weren’t integrated. You could see the data here. And you could see the data there. You just couldn’t do much with it and certainly not together.
But business is driven by outcomes and investments, and areas like workforce management are measured by their impact on the organisation. The potential of this information has to be addressed. Someone has to take this on. And who is in the best position to understand this data and what is behind it? HR, of course. Workforce management is a varied and complex thing and HR has been juggling the related data for decades.
The task is nonetheless overwhelming in its complexity. A first look suggests a dizzying abyss: global corporations average 30-40 systems each for both HR and payroll.1 But while tracking metrics, geographically – like turnover, salary by job and retention – was once a nightmare, there are now analytics for workforce information. The tools are new, but they work and organisations are increasingly realizing their potential. To make that happen, HR may need to do some transitioning to help the organisation, as a whole, use this data to strategically improve workforce management. Here are some tips to do so:
Tap into data-driven insights
Organisations need to ask these five questions to get maximum value from their data:
- How is employee turnover impacting productivity?
- Are our investments in training actually leading to more sales?
- Which employees are most likely to leave?
- What will it cost to replace high potential employees if they leave?
- How does our retention for specific roles rank with other companies in our sector?
These are core business-focused questions, and the answers are essential for sound decision-making and accelerating timely decisions by senior leadership. This is the new, powerful voice of HR.
But how do I get from here to there?
Consider these five steps for HR’s journey toward harnessing business insights:
STEP 1. Learn the fundamentals of the business. Talk to business leaders, read annual reports and analysts’ coverage of the company and industry.
STEP 2. For goal-setting, move away from standard HR “reporting” metrics. Move toward the more useful business KPIs that drive the organization such as earnings-per-share and net income.
STEP 3. Redevelop HR processes to focus on alignment with business goals and drive continual improvement and measurement against them.
STEP 4. Examine outcomes of HR processes to find their correlation to business strategies. Like a data scientist, look at other key business factors that can impact those outcomes.
STEP 5. Relate workforce insights to business strategies and data outside the organization. Recommend workforce initiatives that can move the dials.
Effective HR strategies drive the business forward. Performance management solutions need to align each individual’s goals to corporate goals. And the system should connect those goals to rewards, while building career planning into succession models. That is the destination.
What does this new world look like for HR?
The new “big data” world of business has HR breaking out of its silos and into the position of strategic advisor with its hands on the pulse of the operation… with the information to help predict outcomes and opportunities… with insights to confidently guide and influence. HR’s greatest opportunity to drive impact lies in understanding how workforce decisions drive business decisions. It’s a power that is clearly yours for the taking.
1 2015 Global Human Capital Management Decision-Makers Survey, ADP Research InstituteÒ