There are three key strategies that HR needs to clearly understand and link in order for HR functions to drive business results through effective analytics, according to Oracle.
Wherever possible, HR needs to have direct linkages and line of sight between HR objectives, the people strategy, and how this aligns with the business strategy.
“There’s the people strategy, there’s the HR strategy, and then there’s the business strategy,” said Andrew Lafontaine, senior director, HCM transformation, Oracle APAC.
“Traditionally, HR’s been very good around the HR strategy – the operating model, what systems do we want, what are our practices, our policies?” he said.
“Then they’ve moved into the people strategy side, so what’s our engagement strategy, what’s our capability strategy, what do we think of our talent in this organisation, how do we promote talent – and how do we prioritise all this?”
The final piece of the puzzle is the business strategy, and Lafontaine said the HR and people strategies need to be clearly linked to this.
“Most business strategies have three, four or five key tenets. So how do they make sure they’ve been aligned with those?” he said.
“That will be different across every industry and across every organisation, but HR really needs to make sure that the HR and people strategies are linked into and aligned with the business strategy.”
“As far as predictive analytics goes, don’t try to boil the ocean”
A second key for HR in driving business results is through better harnessing data and understanding how this impacts decisions around people and HR strategy.
“HR should not just look at data they’ve got about their people, but they should be looking at all their customer data and all their product data, based on whatever industry they’re in,” said Lafontaine.
Access to data is getting easier, and he observed that most organisations now have a chief digital officer and setting up data warehousing solutions ahead and getting the right systems in place.
“So HR needs to make sure they get access to all the data in the organisation, beyond HR, so that information is embedded into their strategy,” he said.
A third key for HR extends beyond the above point around information, reporting and trends, to gleaning insights into what the data means for the HR function and the strategies it is trying to deliver.
“That’s when you’re really talking about analytics; analytics is all about insight, and moves beyond reporting and trends,” according Lafontaine, who said it was important to take measured steps in building analytics capability.
“As far as predictive analytics goes, don’t try to boil the ocean,” he said.
“Tick off a couple of key areas that you really want to deliver on that’s going to have some real business impact, rather than trying to do predictive analytics across every HR domain.
“Recruitment is a good place to start, because if you can start to provide some predictive analytics about when and where we’re going to need people with whatever capabilities – way before people actually leave or we have vacancies, then that has a really significant impact on an organisation because there’s now downtime especially in critical roles,” he said.
“HR functions will start to think about and align the capture of data for employees using a similar framework for capture of data with customers”
Lafontaine also said there was increased focus on the type of skills and capabilities required in the HR function to help with analytics.
“I think you are going to see more and more people coming into HR who don’t have traditional HR backgrounds or don’t actually see themselves as HR professionals – but they are data ninjas,” he said.
“Their skill set is all about interpretation of data and insights, and I believe it’s going to be a very specific skill set that’s going to become more and more relevant and prevalent in HR functions moving forward.
“This skill set will sit alongside your traditional HR skill sets of recruitment, learning and development and employee relations and so on,” he said.
Another key trend Lafontaine pointed to was the emerging alignment of the employee experience and the customer experience.
“HR functions will start to think about and align the capture of data for employees using a similar framework for capture of data with customers,” he said.
“So organisations want their customer experience and customer journey to really resemble and replicate the employee experience and employee journey.
“The bringing together of these two things is a trend that we’ll see more and more of, and this will be underpinned by capture, use and interpretation of data as well.”
While there is still “a fair bit of immaturity” around analytics in HR functions, Lafontaine said the large majority of HR professionals acknowledged it as an area that they need to focus on more.
“Everybody realises the importance and the power of having great data in your organisation, so many have started on the journey and asking the question: ‘How we do start to leverage it?’ which is great,” he said.
“They still fall short a little around linking that to the people strategy and the business outcomes of the organisation”
Lafontaine said there had been a shift in the mindset of HR professionals around the value of data and leveraging it to provide an evidence-based approach as to why they want to do something in the organisation.
“There are many organisations I see that have really good people strategies, with a focus on driving engagement in the organisation,” he said.
“I still think where it falls short is what does that higher engagement actually mean in real business outcomes for the organisation?
“There’s still some way to go before they bring that story together from a business outcome perspective, and HR still struggles to make the direct correlation between a 30 per cent uplift in sales, for example, and how to make this happen from a potential engagement, capability and customer satisfaction perspective.”
This is where data can play a role in helping HR understand and connect the dots between each of these elements, said Lafontaine.
“So a basic example might be that if feedback from customers is that they are not getting the level of service expected, what does this mean from a capability perspective, and how can this be improved in the organisation?” he said.
“There are definitely opportunities for HR to align a lot more closely to business goals, but I would argue that there’s still a fair way to go.
“I’ve seen some really nice people strategies for HR functions, but they still fall short a little around linking that to the people strategy and the business outcomes of the organisation.”
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