HR Administration

HR Data Enters the Equation

By Todd Henneman

Mar. 22, 2013

So-called “Big Data” offers may help human resources departments break out of the support-function straitjacket and show how their work lies at the heart of ongoing success.

“It could be a potential game-changer for HR, but it’s going to require a change in HR competencies and how HR is comfortable in using data to influence and inform the business and not simply track and measure compliance-related issues,” says Ken Lahti, vice president of product development and innovation at talent-measurement firm SHL America.

The best-performing HR departments are harvesting big data so their leaders arrive at the proverbial top table with insights about pivotal roles, critical skills and gaps, says Harry Osle, global HR transformation and advisory practice leader at The Hackett Group.

“Why would you want a seat at the table if you have nothing to say?” Osle says.

Companies ranging from Aetna Inc. to PepsiCo Inc. are culling workforce data to prepare the pipeline of future leaders and to build a workforce whose skills match business priorities.

FedEx Corp. mathematically models multiple operational scenarios to help internal customers make better business decisions, says Tracey Smith, a business strategist with the FedEx Express unit, which has done such planning for three years. Smith and her colleagues also focus on the roles that matter most to executing the business strategy.

But for most companies, workforce analysis and planning remains an aspiration, not a reality, says Marc Effron, president of the consulting firm The Talent Strategy Group. The problem isn’t a lack of data; most organizations have a lot of numbers.

“What they don’t have on staff is not just someone who can crunch the numbers—that’s step one—but someone who can tell a business story about the numbers,” Effron says.

In part, it’s because strategic workforce planning is a new methodology, says Mary Young, a human capital researcher at The Conference Board. Effective workforce planning leaders are likely to have held roles within HR and in finance, sales or other functions, she says.

Some organizations have pulled people with the right blend of analytical and strategic skills from HR information system teams or consumer insight departments, says Bryan Hancock, a principal in the Atlanta office of McKinsey & Co.

But even then, companies must make sure they don’t simply generate reports that don’t help with growth. Ask yourself what problem you’re solving for the business, Hancock says. “You have to make sure what you’re bringing is actionable and insightful,” he says.

Need to rally support for strategic workforce planning? Have the chief human resources officers write a memo to the board and deliver it as part of a talent update, Hancock says.

“The head of HR can say, ‘Here are the trends in the business that we see, obviously informed by the strategy, and here are the implications on people,’ ” Hancock says. “Taking that proactive view at the most senior levels of the HR organization is one of the most important things that can be done.”

Some experts argue that employee-performance data are not going to tell a company if it has the leaders of tomorrow in today’s workforce. SHL’s Lahti says companies should assess “workforce potential”—objective measures of skills and competencies identified using tools ranging from personality tests to simulations. These tests focus on “attributes of the person as opposed to the effectiveness of that person in that current role,” Lahti says.

Todd Henneman is a writer based in Los Angeles. Comment below or email Follow Workforce on Twitter at @workforcenews.

Todd Henneman is a writer based in Los Angeles.

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