Can Data Pave the HRO Path to CHRO? Part 2.

Alright, I am making a leap here linking HR data, HRO and the path to the Chief Human Resources Officer’s chair. But springtime and its greening hopefulness help sprout our flights of fancy!

One of the HR outsourcing (HRO) services that held up well through the economic downturn was payroll, and we saw an increased interest in multi-country payroll by the C-suite. Do you really think that all of sudden, when dollars were super tight, executives decided, “What we need is to invest in a new payroll system”? I think not. I think that business leaders saw a real need for real-time, accurate workforce and labor cost data to better manage one of organizations’ largest expenses. Payroll, especially when it rides with an HRMS backbone, can not only improve payroll administration but also act as a forcing function to getting the workforce data needed in today’s challenging and dynamic business environment.

Wake up sunshine, it’s the workforce data, baby. And HR needs to take the lead in gathering, reporting, analyzing and leveraging it in consulting and advising business leaders. Data will not displace HR; rather, it will strengthen HR if HR is proactive, smart and prepared.

I just reviewed a new study by Dr. Peter Cappelli and Yang Yang, “Who gets the top spot?” The research compares data from 1999 and 2009 to identify changes and trends in backgrounds of the top HR leaders of the Fortune 100.

Their advice for a career path to the top of HR? Spend at least half of your career in HR, have both corporate and field experience, and hold the senior position in talent management (#1 with newer F100 companies) or compensation and benefits (#1 with traditional F100 companies). The area with the largest growth in experience was employee surveys (considered as a proxy for HR metrics, a term not consistently used in 1999), where the rate of those with HR data experience increased by 140 percent.

The Cappelli/Yang study also noted another 2002 U.S. study that reported HR executives needed more business acumen and suggested that “the future will require greater use of metrics (the equivalent of the CFO role for inside the HR function), greater emphasis on talent issues, and vendor management as more administrative issues are outsourced.”

Many of today’s top HR leaders are already benefiting from HR data management skills and experience. One path to developing HR data and analytics capabilities is through outsourcing.

So a call to vendors with HR analytics software and consulting capabilities: how are you using your basic outsourcing services to build a foundation and appetite for your advanced services? How are you partnering with your clients’ retained HR organization and HR leaders to build appreciation for HR data and reporting as a leverage point into human capital strategic business consulting?

And current and future HR leaders, HRO is not just a path to operational cost savings; it can be a valuable pathway to creating greater business impact and career advancement. Are you on the path, or stuck in the weeds?

Linda Merritt, Research Director, HRO, NelsonHall

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