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The Changing Nature of HR

  • Workers, managers, and executives are demanding more from their HR function.

  • The need for more information to “run the business.” The required response to this is the democratization of HR.

  • The desire for personalized services. The required response to this is the consumerization of HR.

These demands strengthen the argument for workforce analytics because analytics can help deliver insights directly to managers and also provide intelligence that enables the personalization of services to employees.

Democratization of HR

At a time when data are more readily available than ever, HR is being asked for more information, better insights, and more precise recommendations to help executives and managers run their businesses. This puts a strain on the traditional HR function that primarily dealt with the process side of recruitment, resourcing, development, and employee relations. For the last 40 years or so, HR has delivered structured programs, developed policies, and implemented best practices to allow executives and managers to manage people in a cyclical pattern—for example, through annual performance reviews, specific salary increase programs, and succession planning cycles. However, the demand has changed and new requests for information are emerging, as Table 1.1 illustrates.

Table 1.1 Examples of Traditional, Current, and Future HR Requests from Managers

Topic Traditional Current Future
Recruitment “I need to recruit someone. How do I do it?” “I need someone new. How do I know where the best people come from and who will be the best fit for my team?” “Can you recommend the best fit people to me in advance of needing them so I have a ready bank of suitable candidates?”
Learning and Development “What courses are available for sales people?” “I want something to help Joe with a client meeting he’s got tomorrow—a short video would be great.” “Can you notify Joe of both his learning needs now and his needs over the next year? Please recommend development actions similar people have taken and send him articles he can read.”
Compensation “Gabrielle has resigned and I would like to give her a salary increase to see if we can save her.” “I would like to be notified when people are at risk of leaving.” “I would like to be given salary and benchmark information for all my people to help me keep abreast of market conditions in each location. I’d also like recommendations on ways to retain my key people.”
Health and Wellness “What are the benefits in this company?” “Can we have benefits tailored to employees by location, level, age, and experience?” “Can we push notifications to people (in advance) about the health and wellness benefits that meet both their lifestyle needs and our needs in the company?”
Leadership “What are the succession plans for my team?” “Who are the best leaders in the company? Who best fits our future needs and our values to ensure our success?” “What behaviors, skills, and attributes best fit the current and future leadership needs of our company? How do we nurture our current people, recruit new people, and manage succession to enable a stable future as our marketplace evolves?”

For executives and managers to get timely answers to questions and make informed decisions about their people, they need information, insights, and recommendations. HR needs to respond to these requests in real time, providing information and insights to managers and executives as they need it. The workforce analytics function is at the heart of this change because HR is sharing more than just data with managers and executives—it is also giving them business insights and recommendations generated by sophisticated algorithms.

Consumerization of HR

Bringing the type of customization experienced by consumers to the world of work can yield great benefits. In 2012, Amazon reported a 29 percent increase in second quarter fiscal results. A Fortune article at the time discussed how Amazon’s recommendation engine contributed much to that success by using algorithms to heavily customize the browsing experience for returning customers.

HR can learn a lot from examples like this and begin to use its data to create predictive models for the “workforce of one” (a term referring to personalized employee experiences in Accenture’s report “The Future of HR: A Radically Different Proposition”). But more than this, workers are starting to expect similar customization from their employers. Many workers would appreciate recommendations to improve their working experience. This change is referred to as the consumerization of HR, further discussed by Mark Feffer in a 2015 Society for Human Resource Management article focused on recruitment: “Today, job seekers are thought of as customers.”

  • Examples of workforce personalization include the following:

  • Recommendation of modular courses to enhance employees’ skills

  • Information on benefits relevant as a worker enters new life stages (for example, a new baby, marriage, or house purchase)

  • Internal job and career moves that best meet a worker’s skills and expertise

  • Opportunities to contribute to projects across the business based on an individual’s expertise and knowledge

  • Provision of performance feedback in real time through manager- to-employee and peer-to-peer social feedback

Ian Bailie, Global Head, Talent Acquisition and People Planning Operations at Cisco, explains how the consumerization of HR begins with the Cisco Talent Cloud, a huge database of all workforce-related data: “The primary catalyst of the Talent Cloud was for employees to manage their own development. For example, it helps them find training that matches directly to skills, as well as potential new jobs and new assignments. It also gives them visibility of opportunities across Cisco, breaking down silos. All that is in the employees’ hands. And that gives us an overview of the entire workforce that is also really helpful in running the business.”

The Future of HR is Analytics

Mark Huselid, Distinguished Professor at Boston’s Northeastern University, is one of the world’s experts in workforce analytics.3 He sees this area as the future for the HR profession. “In my experience, the outside world is changing more quickly than the organization is changing on the inside. So there is an increased demand for talent related information.

“The arc of the analytics story is that it is both very new and very old. We’ve been playing at this for a long time. So what’s new? A confluence of factors: access to data and better, easier, faster analytics tools.” The workplace is also changing with the Internet, social media, smartphones, and work marketplaces for jobs virtually everywhere and for any skill. “Executing strategy through the workforce, and helping managers do a better job of that has gotten much more complex,” Mark says.

And so we come to analytics. “I was at Rutgers University for two decades at the School of Labor Relations,” Mark says. “I focused on HR in that program. I spent a lot of time working with executives and trying to understand from them the relative returns of HR. Analytics is just the next evolution and there’s a lot more interest now in building analytical skills.”

He continues: “There’s enormous pressure to do things faster, better, quicker, cheaper. In today’s world, there’s much more information available to employees about the quality of experience in other businesses, making talent exponentially more mobile. People won’t put up with crummy jobs—they’ll just leave.”

Mark’s message is simple: Businesses must understand their workforce better. And to do that, they must use analytics.

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