Insights

Why Technology & Analytics are Foundational to 21st Century Organizational Cultures

I’ve been in the HR profession long enough to remember frequent conversations that pitted culture against innovation. There was fear that the widespread adoption of technology and analytics would transform people-centric organizations into heartless entities. At the time, many HR professionals believed our value to the organization couldn’t (and/or shouldn’t) be measured.

Over time that position has thawed. If you want proof, follow the money. In Q1 of 2019, an approximate $1.74B (USD) of venture capital investment poured into HR technologies. That’s significantly more than any quarter in 2018, and $677M more than all of 2017. Organizations are adopting HR technologies and analytics at rates never before seen. According to Josh Bersin’s HR Technology Disruptions for 2019 report: “The average large company is spending $310 per employee per year — a 29% increase over last year” on HR technologies.

However there remains reluctance in some organizations (and on the part of some HR professionals) to embrace this trend. I believe that doing ignoring the trend is a mistake; that technology and analytics, when deployed consciously, can actually become the foundation for an employee-centric culture.

It begins with the automation of repetitive, mundane administrative tasks. The hard truth is that this work isn’t best performed by humans. When compared to technology, humans are slower, less-reliable and more costly. To continue this pattern is simply not smart business, to say nothing of the waning satisfaction of the employees performing these tasks. I’ve often said that no HR person joined this profession to spend 6 hours each day behind a spreadsheet. Though that’s where many of us still are. Technology liberates these employees from low-value monotony to tasks that drive true enterprise value – employment branding, employee experience, and total rewards – to name three. If architected with purpose, these investments can themselves unlock incremental benefit to the organization.

Take the example of a Recruitment Coordinator who spends most of their working hours scheduling candidate interviews, conducting reference checks and following-up on new hire employment packages. With this work automated, this valued team member can be reallocated to employment branding activities that reduce the average length of open requisitions, which itself has a compelling rate of financial return.

Presenting a self-funded business case that enhances the candidate experience, reduces the length of open requisitions, and enriches the work for team members is possible in many medium to large organizations.

Making conscious investments in HR analytics yields similar results. HR departments in most organizations are sitting on a mountain of underleveraged resources – data. In many organizations HR is viewed as a cost center, and is under constant scrutiny to justify their own existence. Analytics helps quantify the organizational opportunities, issues and risks using the predominant language of business (numbers). Analytics enable HR to report on impact – the ROI of their initiatives and programs, which if successful, may attract further investments. For example, if HR develops a sales training program that costs $50,000 to create and deliver, though delivers $75,000 in incremental revenue when team performance is factored in, that’s by any financial measure, a success. At budget time, a discussion with this richness is not possible when there is no data. We graduate from subjective, qualitative funding arguments, to evidence-based, quantitative investment decisions.

Leveraging predictive models we can analyze historical data to make calculated assumptions regarding future events. With an accurate and robust data set, we can determine the profile of high-performing employees at greatest risk of leaving. The reduced turnover rate, at minimum, partially offsets the upfront investment, to say nothing of benefits to operational continuity, team morale and employment branding. Using analytics we transform our role from reactive (firefighters) to proactive (fire prevention).

I believe HR is best positioned to lead transformational change within organizations. However, in a highly-disruptive global landscape, we too need to evolve. In relinquishing manual administration, reallocating finite resources to functions that add true enterprise value, and pairing them with analytics that inform our practice, quantify our impact and enable us to mitigate risk before it becomes a crisis, we transform our relationship with our organizations and advance our profession.

The time has come to embrace these tools.

The world is changing; this much is certain. As HR leaders & practitioners, we aren’t immune to the global forces changing the very nature of work. We’re on the front lines and in a unique position.

In this age of disruption, we have a shared responsibility: to our organizations as they navigate these turbulent waters and to ourselves, as we define the future of our chosen profession.

Ask the average employee what they believe HR is responsible for. You’ll hear examples like: interviews, payroll, training, administration. (As an aside, the position of HR from an organizational design perspective can tell you a lot about how the organization views the function – as administrative, as in reporting to the CFO, COO or CAO, or strategic – reporting to the CEO).

So what’s the problem?

The tasks they listed: they’re disappearing. Manual, repetitive, administrative tasks are being automated across all functions, including HR.

The time for change is now.

When I think about the necessary skills for an HR professional of the future, my mind first wanders to what organizations should expect from our function. I don’t think these will largely change. I then think about the evolving expectations of employees and finally how it all integrates within technology.

To be clear, I’m not advocating for an emotionless employee experience dominated by technology and numbers. Rather, I challenge myself to automate everything transactional so that finite resources can be allocated to activities that are incremental investments in the individual (coaching session) or the organization (frequent virtual town hall meetings).

The HR department of the future will not require administrators – at least not as presently constructed. The predictable, repetitive nature of administrative transactions, coupled with the sensitive nature of the information, means it will be solved in one of two ways: centralized and owned by a small number of trusted internal, salaried resources. Or, along with the risk and liability, outsourced to a trusted third-party. Core transactional HR functions – payroll, leave requests, training certifications, etc. will be automated – though someone will be tasked with identifying and resolving exceptions, analyzing trends, and maintaining relationships with third-party providers (freelancers, consultants, vendors).

The highly-technical, knowledge-based functions within HR – learning designers, employment branding consultants, data scientists – are the roles of the future. Differentiation will occur through practitioner-driven segmentation, as organizations continue to squeeze their HR functions for savings.

Though organizations can’t afford to hire the brightest full-time, salaried resources. The good news? They don’t have to. Increasingly organizations, and their HR leaders, will hire the best knowledge workers on a freelance / contractual basis to more efficiently leverage finite resources. They’ll pay for scarce, specialized knowledge – strategy / concept / design – and implement programs with core internal resources who have a better understanding of their unique organizational culture.

Even today, for most medium to large organizations, I’m confident there’s an existing business case for this type of thinking. Consider a scenario where knowledge-based work is outsourced to specialized freelance resources. A learning designer develops a new digital course including the latest advancement in remote adult learning. A compensation consultant benchmarks a key roles against the local market, and in tandem with a recruitment firm, develops a strategy to identify 3-5 undervalued, high-potential candidates. This scenario is possible today if we’re willing to look at traditional problems differently.