HR technology special 3/7: Transforming data into business intelligence remains a stumbling block for HR technology strategy
While technology provides HR people with a wealth of data, accessing this data and transforming it into meaningful business intelligence remains for many a major stumbling block on the way to a successful HR technology strategy.
"HR directors generally have an awareness of the data that they can access and what that can be used for, but there is a deep frustration about how to turn that awareness into something tangible," asserts Steve Foster, strategic consultant and HR expert at HR services provider, NorthgateArinso.
This view is backed by The Business Impact of Talent Intelligence, a study of more than 600 global organisations published by the Human Capital Institute and talent intelligence consultancy Taleo in March. According to this, most HR practitioners have better access to less important, tactical data than they do to data regarding strategic issues.
David Wilkins, vice president, research, at Taleo, explains: "When asked about performance and compensation metrics, top performer retention was considered the most important issue for HR pros, but top performer flight risk and top performers without a career plan were the two worst performing metrics, in terms of reliable access. The metric HRDs have the best access to is average performance review scores - which they consider to be the least important."
One of the major barriers to effectively using HR technology for more sophisticated workforce analytics is that such objectives are simply not factored in.
"Output has to be linked to input, but when planning a technology solution, often people don't do it with a view to how they are going to get the information out," says Foster.
Likewise, it seems that at the implementation phase there can be a tendency for HR insight and intelligence to get lost in more immediate concerns around business processes.
"Organisations will spend a year on setting a project up, then say they will come back to the metrics and the analytics later," adds Foster.
And some organisations still persist in the deluded belief that even SaaS (software as a service) and cloud-based HR solutions are simply about automating backroom processes to deliver cost reductions.
Many excuse such practices and attitudes by claiming the majority of HR practitioners cling to a mindset that views reducing people issues to number-crunching as stripping the soul out of what they do. However, a more likely answer is that, as a function, HR is simply deficient in the necessary competencies to handle sophisticated analytics. "In general, HR people lack the financial expertise and modelling skills to analyse and extract maximum value from the amount of data available to them," says Vincent Belliveau, senior vice president EMEA for cloud-based talent management software solutions provider, Cornerstone OnDemand.
Indeed, Neil Roden, partner at accountants PwC and previously group director of HR at RBS for 11 years, has gone a step further. Calling for more attention to analytics in the teaching of CIPD qualifications at a Ceridian analyst event on 20 March, he said: "Not a lot of HR people do much on metrics and analytics, despite the fact we all know that's how most chief executives and chief finance officers think. Too many in HR struggle even to say how many people are employed in the organisation, let alone what the trends are."
But others hold HR technology providers at least partly to blame. "In the past, vendors have also failed to step up to the challenge that HR people tend not to come from science or analytical backgrounds, typically providing user-unfriendly tools," says David Woodward, chief product and innovation officer at HR consultancy, Ceridian. His organisation has launched a new analytics module as part of its SaaS solution, HRevolution. "In addition to the usual dashboards and ready-made charts, this allows users to interpret the data they have at their fingertips, without the need to go on a three-week programming course," he says.
If the modern HR department is to avoid being demoted to a cost centre that needs to be controlled, and instead become a strategic business asset, then practitioners need to speak in business terms and have the facts and figures to back this up.
One of the key success factors is the quality of the data collected. "This has to be consistent across an organisation in order to report against it, which means determining what information the business needs for success, and agreeing on some core metrics, which can be expanded in progressive steps," says Belliveau.
Happily, there is also a new generation of HR professionals emerging who are more comfortable with technology and making connections with reliable outside data sources, such as benchmarking-type information.
"Many of the HR staff we deal with on a day-to-day basis tend to fall into the Generation Y category: they are tech-savvy and have a well-rounded knowledge and first-hand experience of social media and cloud technology," says Roger Moore, general manager at HR, payroll and time and attendance software provider, Bond Teamspirit.
The extent to which HRDs call on such data is unclear. But, the recent growth in mobile HR apps, such as the pay app, Jobsworth, which launched in April, offering data about wages and salaries across Europe from the Federation of European Employers (FedEE), is likely to drive up adoption.
Many forward-thinking organisations are taking a more sophisticated approach, going beyond measuring even complex data such as quality of hire, core competencies, skills gaps and employee engagement, to manage workforce data in the context of other business information - and using this to drive decisions.
This is an approach being taken by laboratory supplies and services specialist, VWR International, which has 8,000 staff across 31 countries.
Having gone live with a global human capital management platform from Workday at the end of 2011, the firm is now looking to workforce planning. "We don't just want to see what's happening now, but also address trends, concerns and opportunities so we can plan the resources the organisation needs," says VWR International director of HR services, Patrick Crane.
His firm is also rolling out a learning management system and is in discussions around importing a similarly cloud-based employee involvement system addressing workforce volunteering, philanthropy, sustainability and wellbeing. Interestingly, however, although the self-service element of these solutions only allows employees to see appropriate information, it is already creating a beneficial social media effect for the company.
"It is enabling our people to connect more with each other around common interests that go beyond the work that they do," Crane adds. "As a result, we are beginning to see a level of engagement and connectivity we hadn't envisaged, which ultimately should drive employee retention."
Case study: Fidessa
Three years ago, an employee survey by financial trading, investment and information solutions provider, Fidessa, revealed the primary reason for employees leaving the business was a lack of career progression. "When benchmarked against our competitors, we actually have good retention rates, with many people staying with us for 10 years or more," says the firm's HR director, Wayne Coomey. "But we were worried about those with two to five years' experience with the company, in particular, looking to our competitors for career advancement."
As such, his firm, which has offices across Europe, the US, Asia Pacific, Latin America and the Middle East, teamed up with Cornerstone OnDemand, to replace its home-built talent management databases with a cloud-based software solution, which was internally branded 'Endeavour'.
Now available to all employees at the touch of a button, this solution includes a learning module, while, last year, the firm rolled out a performance-management module, role-mapping 20 key positions across the organisation, against a grading framework agreed by business managers.
"This feeds into our appraisal process and overall performance management process to give us much better tracking of where the talent lies within the organisation, so that if we have a project we can get the right skills for the right job," says Coomey, who adds: "It is also not just an HR tool, but about empowering managers and employees in Fidessa."
Indeed, this new system provides team managers, business unit heads and senior managers across the organisation with people performance data and analytics. It also enables individuals to take charge of their own career development, identifying clear career ladders: for example, mapping the competences needed for a software engineer to become a project manager.
Coomey underlines that it is still early days, but future plans include providing predictive analytics around talent pooling and succession planning. Meanwhile, the firm is in the developmental stage of adding a recruitment module.