By Mick Collins
In a Q2 2017 article entitled “Defining Digitalization: Creating a Common Vision,” Katy Connealy Weber and Michael Hanrahan of CEB’s Corporate Leadership Council indicated that, in response to the increasing digitization of products, channels, and operations, fully 68 percent of CHROs “plan to prioritize improving the organization’s talent analytics capabilities.”
They continue, suggesting that the deepening reliance on enterprise data will incent talent analytics teams to create an ecosystem of partners outside of HR whose data will enable these teams to provide holistic guidance to the business.
This line of thinking is reflected in the new SAP SuccessFactors and Harvard Business Review study – HR Analytics: Busting Silos and Delivering Outcomes – in which we suggest that the modern, digital HR organization steps beyond the automation of HR processes and operations to taking a top-down approach that starts with business challenges and then identifies workforce drivers and measures that impact the results. If HR can help managers ask better questions, perhaps we can obtain better answers (using data) and make better decisions.
It is the concept of decision-making that intrigues me and that also ties these two pieces of research together. Much of the investment that the Corporate Leadership Council expects CHROs to make will be on the structure of analytics — organizational design, teams, individuals, skills, and resources. In contrast, the SAP SuccessFactors study focuses on the process of analytics — how HR interacts and partners with business colleagues to affect a change in behaviors based on actionable people analytics.
It is a combination of both structure and process that leads to the holy grail of talent analytics: managers using data to change how they make decisions on their people.
So how to drive toward decision-making as the primary outcome of talent analytics?
As I wrote recently on the workforce analytics execution gap, I find this idea of a monolithic “business strategy” to be overly simplistic (at best) and useless (at worst). Most organizations are a complex, fluid, and heterogeneous amalgamation of activities, many of which may loosely be defined as “strategy.”
Thus to improve the likelihood that analytics projects focus on relevant, specific strategies, analytics teams (or the part-time compensation analyst who has been “volun-told” to drive the analytics agenda) could:
- Deliver insights that address or alleviate a talent management “pain.” According to a 2014 PwC survey on Trends in Workforce Analytics, 70 percent of U.S. CEOs worry about how a shortage of people with the right skills will undermine their strategic plans. This would be a pain that analytics could certainly help to reduce (for example, the CEB Corporate Leadership Council report indicates that 56 percent of CHROs plan to focus their talent acquisition on much-needed digital skills).
- Prioritize analytics on areas with high alignment to CEO concerns and limited visibility. Many organizations focus their initial measurement efforts on mature, process-driven domains (e.g., recruiting metrics) or those with high visibility and comparably simple data capture (e.g., turnover). As a recent Insights From SAP Workforce Analytics survey illustrated, some of the greatest opportunities for analytics are in Learning and Succession. Learning suffers from the challenge of massive volumes of data pumped into transactional reports only – as expanded upon in this blog – while Succession is generally approached from the perspective of the individual successors rather than a study of the aggregate portfolio, discussed further here.
With greater digitalization in HR, the function’s skill profile will also evolve. Of high priority will be skills related to digital strategy (understanding how systems connect to deliver integrated streams of data), data science, storytelling, and insights coaching (helping managers understand the decision implications associated with data analysis).
Digitalization is a brave new world for many HR functions, but the promise it holds for analytics, and better talent management decision-making, is too great to be ignored.
To access the HBR report and to learn more about how SAP SuccessFactors Workforce Analytics together with SAP Digital Boardroom can help HR become a valuable player in strategic decision making, visit here. An earlier version of this article was published in the SAP News Center.