The lengthy economic downturn has impacted many areas of HR, first with the mandate to do more with less. It has also given many HR organizations the opportunity to truly become more strategically connected enterprise-wide as business leaders look to HR for critical help in managing smaller workforces in constrained circumstances. That has created a pull for HR metrics and analytics.
The June issue of HRO Today magazine has a CHRO roundtable, Charting the New HR Order, with five HR leaders discussing a range of topics including “the emergent culture of measurement” in HR. According to Sunoco’s CHRO, Dennis Zeleny, “The bottom line: For HR departments that embrace it, measurement has made them more important strategically and operationally.” And Roger Gaston, Avaya HR SVP, tied providing strategic counsel and the use of analytics pragmatically together saying, “And, given that we all now have fewer resources, you’ve actually got no choice.”
Unfortunately, there are still plenty of barriers to HR analytics becoming a broadly accepted and available HR competency and capability. To date, HRO has mainly played two progress-making roles in HR analytics. First, HRO naturally brings more accessible data around the outsourced function, and if reporting capabilities are included in core HR systems outsourcing, there is usually improved data and reporting generally available. True, much of the new capabilities are used for basic reporting of what has happened, but accurate and timely data is the foundation needed first to progress to more sophisticated analytics.
The second role HRO has played is perhaps unintended, but should not be discounted. HR managers have not always been comfortable with many metrics areas, but they are more than willing to work diligently to learn and improve in how to measure the performance of an HRO vendor. They quickly become apt and rapt students of SLAs!
This is not always an easy learning process to go through, but service level measures are becoming more consistently defined and understood. I have seen HR teams involved in vendor management learn more about process, operations, the impact of demand and resource levels and the connection of process performance to pricing, user satisfaction and business impact. That practical learning can and has fueled the improved use of operational metrics in other HR areas, another foundation block in building measurement competency.
A third role HRO wants to play is in providing tools and services for advanced HR analytics. The business case can be a bit tough to make and tight budgets have too often stalled pending sales. The tools and HR capabilities to use them are also a barrier. Another of the roundtable participants, Sharon Taylor, Prudential HR SVP, said, “Some systems are so overly complicated that they are not as helpful as they might be.” And in the current business environment, HR will not want to risk end up with more little used “shelfware.”
Executives have renewed interest in talent management and selective recruiting, as they want to strategically and economically strengthen workforces in light of a continued bumpy economy. HRO vendors: make your case that HR analytics tools and services are an important and cost effective part of the solution.
Linda Merritt, Research Director, HRO, NelsonHall
HRO Insights 
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