Posted tagged ‘HR analytics’

Bridging Talent Management and Workforce Management with HRO

August 3, 2012

Linda Merritt, HRO Research Analyst, NelsonHall

One of the hottest topics in HR and HRO has been talent management (TM), including everything from recruiting and RPO to performance management and employee engagement. Major ERP vendors have snapped up TM software leaders to strengthen HR product lines, e.g., SAP and SuccessFactors; Oracle and Taleo. Very good moves and very on trend, but let’s not forget about the less flashy powerhouse: workforce management (WM).

TM and WM are both critical components of human capital management (HCM) and depending on definitions and models, there can be a lot of overlap. For my purpose here, TM is about the individual and the capabilities for a specific job position and WM is about groups of workers and managing multiple positions.

TM involves attracting, retaining, and developing people with the required capabilities according to requested volumes and performance management. WM involves workforce planning and forecasting the capabilities and volumes needed and day-to-day scheduling and time and attendance. It takes both processes to have the right number of people, with the right skills, in the right places, at the right time.

Let’s consider two more elements, HR analytics and ROI, that will also benefit from seamless HR systems and processes, which our dear HRO community can enable and deliver. Timely and accurate workforce data is a foundation block upon which HR is built. At least part of the drive for multi-country payroll has been to get better employee data, and there is an important feeder into payroll: time reporting. Today’s leading time and attendance systems offer great flexibility in capturing the detailed data needed for payroll plus analyses of productivity, labor costing, pricing, project billing, workforce planning, etc.

Everybody wants to tie HR and HRO to ROI. Lowering the cost of HR operations alone is not enough. We must show real impact in measurable business results. Simplifying a bit, TM supports improved business results through customer satisfaction and revenues generated; WM supports improved business results through optimizing SG&A via operations and reducing losses.

Many HRO offerings come in basic and advanced levels. HRO providers– ensure you offer both levels of time and attendance, scheduling, and attendance management services. Buyers – take the time to determine whether advanced workforce management services will not only provide better data, but will pay for itself through reductions in overtime and the impact of absences. Also, for many positions and industries, ensuring all customer-facing seats are filled at the right capacity, capability, and time has a direct link to productivity and revenues. Finally, don’t forget about compliance with wage, hour, and labor regulations where accurate records and proactive scheduling are a great defense against fines and losses.

HR and HRO in partnership can be the bridge to strengthen TM and WM across the entire human capital value chain.

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HR, Analytics, and HRO – No Walk in the Park

June 25, 2012

By Linda Merritt, HRO Research Analyst, NelsonHall

Business intelligence tools, consulting, and services have been around for years, including for HR. Increasingly, one can find analytic solutions from HRO service providers, including those whose business services extend far beyond HRO and those that are pure-play HRO vendors. Every so often I review analytics packages, success stories, and service offerings and each time I am impressed by what can be done with the right tools, technologies, consulting, and data.

One would think that analytic solutions that provide fact-based information to support HR recommendations and then track the business impact of HR interventions and programs would be an easy sell, but it is not.

There are always leaders and early adopters ready to use the most cutting-edge tools and with the internal capabilities to ensure that value is delivered. That group is now getting into advanced HR analytics, but that group is not large enough to sustain a robust market.

Savvy HRO vendors with advanced analytic solutions understand the issue of client readiness and maturity. If the foundations and fundamentals are put in place first, then a vendor can whet the client’s appetite for more useful and usable information. For example:

  • Vendors in a consulting engagement for a specific problem should show how its advanced offering can be used along the way
  • Vendors should be aware of clients that are dealing with anecdotal data and data silos and who are struggling to get consistent, accurate, and timely data on the workforce basics because this foundation can be built on to support the entry point for analytics
  • Vendors providing HR outsourcing should teach its clients how to take full advantage of the metric capabilities, reporting, and data analysis that are already built into the services.

Too often, HR analytic solutions get too advanced too quickly for the average HRO client. HR is already drowning in data and the thought of getting more, even more sophisticated data is not necessarily a perceived plus. What would we do with it? Would we really use it? How will it fit in with all of our other sources of data, reporting, dashboards, etc.? Our standalone applications have built in reports and analytics, why do we need another system? Would it pay its own way as an investment from our limited budget (i.e., ROI)? Even for those with a strong interest, the data and capability to make it dance are often lacking.

As a long-time champion of the use of metrics and analytics in HR, I loving seeing the strength that the use of great data adds to the consulting and relationship skills of HR business partners. There is a whole lot of foundation work needed to prepare for getting full value out of HR analytic solutions. I hope HRO service providers will stay the course because better use of data is a critical part of becoming strategic HR business partners and succeeding in the age of human capital management.

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Finding it Hard to Keep Up with HR Technology? Plan to Attend HR Tech This Year

July 15, 2011

After attending last year’s HR Technology Conference in Chicago, I blogged about my positive experience with themes that included portals, platforms, and self-service and highly recommended attending this year’s conference.  Well, the time to plan for this year has come!   This year’s HR Technology Conference and Exhibition is October 3 – 5 in Las Vegas.  I’ve been given a special discount code for attendees to use when registering.  Enter HRO11(all caps) as the promotion code when you register online to get $500 off the posted rate.  The discount expires September 19th.

Why do I think this is such a worthwhile event? We live in a technology world, but I continue to be amazed at the number of new HR technology offerings that are announced each month, sometimes weekly! As a former HR buy-side client, I can resonate quite well with the masses that are thinking about whether or not to invest in new technology. There are so many things to consider including:

  • What is the latest technology for HR and payroll services, be it an applicant tracking system, a talent management system, an e-learning or multi-country payroll platform, benefits enrollment technology, etc.?
  • Who is providing what?
  • How easy and user friendly is it?
  • How will it benefit my business?
  • If I’m interested in a particular product or service, how do I know who to contact to get a demo for other members of my organization, etc.?

What I really liked about the conference is that you can walk the exhibit floor and attend whatever demo you like and speak with representatives knowledgeable about the products and services and not feel like you are being swarmed upon by vultures.  This is because the exhibit floor is loaded with many other curious HR practitioners and often the booths have so many people interested that group demos are given, so you can watch, learn, and ask questions with others.

Equally as good if not better are the conference presentations.  For example, let’s say you are the director of employment of talent acquisition for your company and you have been hearing about video interviewing.  Further, maybe you heard about Kenexa’s recent alliance with GreenJobInterview to integrate its virtual video interviewing capability into Kenexa’s 2x BrassRing so candidates can be interviewed virtually.  Well, this all sounds good, but isn’t it better to learn more about the benefits and results obtained by video interviewing from another buy-side client?  Well, you can on October 3rd from Mike Grennier, Senior Director of Corporate Recruiting at Wal-Mart, at his presentation titled “Wal-Mart Embraces Video Interviewing for Job Applicants.”

If you read my colleague Linda Merritt’s blog earlier this week on analytics and are interested in learning more, then on October 4th Randy MacDonald, SVP of HR at IBM, will give a presentation on technology and analytics and how IBM helps clients quantify HR results.  I’m a big proponent of technology, but I’m a bigger advocate in my belief that technology is only as good as it is utilized and produces results.  Here, we will learn how IBM helps its clients.

I hope to see you there.

Gary Bragar,  HR Outsourcing Research Director, NelsonHall

HR Business Intelligence – How does it tie into HRO?

October 28, 2010

HR organizations are largely on the path to improve the use of technology in managing administration, and service delivery and even workforce and talent management are coming along, according to the CedarCrestone 2010-2011 HR Systems Survey. The highest penetration rate is for administration technologies like core HR recordkeeping, payroll and benefits administration, at 90 percent. These are also top areas for HRO. Service delivery (47 percent), workforce management (45 percent) and talent management (43 percent) are not yet quite at the half-way point.

Business intelligence tools like data warehouse and reporting and presentation applications have reached 37 percent. Workforce optimization is lagging at 17 percent for tools that enhance and enable the use of talent analytics, and dynamic workforce planning that helps prepare for and align a workforce with changing business needs and strategies.

Workforce management addresses the here and now, and how many people, where and at what expense has been a big focus throughout the economic downturn. Sadly, the information was largely used (and needed) to determine where to cut costs and ensure the reductions were achieved. But in  normal times, workforce data is needed to meet and maintain current and near-term staffing levels.

With workforce management tools and data improving, some organizations are not sure where to go next with the tools or how to fully leverage them. With a vague plan, even at 37 percent penetration rate, business intelligence packages can end up being a pretty, expensive, underutilized investment.

As I wrote about in last week’s blog on building an integrated HR ecosystem, it is the connectivity of a comprehensive set of tools and technologies that can unleash the true strategic power of HR in enabling business growth. The ability to use the system to understand, discover and advise is also needed.

As HR uses greater levels of technology for administration and self-service, HR’s workforce needs are generally reduced. In the case of workforce optimization, leading practice indicates that specialized staffing for workforce reporting and workforce planning increases slightly. Large organizations in the study averaged 5.8 people in workforce planning and 4.8 in reporting, while leading users for workforce optimization tools averaged 7.8 and 5.3, respectively.  Oh, and in the leading practice companies HR was viewed as strategic (66 percent), more than in other large organizations (41 percent)!

This is such an important area for HR to truly achieve transformation. It is also important for HRO service providers to be able to move up the value chain and not be relegated to only being useful in building and running the back office administrative systems at lower operating cost – although that will always be a cornerstone of HRO.

Buyers, be sure the vendor you select can not only meet today’s needs but can continue to be your partner as you build out an integrated HR ecosystem. Providers, be ready to demonstrate that you are the partner that can help clients bridge the gap in building and using workforce optimization tools to create business results, including by making them easier to use and understand, and simplifying reporting and providing basic analytical services.

Linda Merritt, Research Director, HRO, NelsonHall

Hope for HR Analytics – HR is Inching Toward Measuring

July 28, 2010

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

Can Data Pave the HRO Path to CHRO? Part 1.

May 4, 2010

I am futuring here, positing a new path for attaining the top spot in HR through HR data and services delivery. While managing HRO and HR shared services is not on the current career path for becoming a senior HR leader, I would like to speculate on this possible future.

In my February 23, 2010 blog on the Puzzling Puzzle of HR, one of the puzzle pieces I mentioned is the role of business and HR analytics. I firmly believe that better HR data leveraged as a part of HR’s consulting services is core to expanding HR’s business impact. And yet, HR has had a long-term frustrating relationship with even basic reporting, let alone with advanced analytics.

Yesterday I listened to a replay of a Human Capital Institute webcast, “Turning Analytics into Action,” presented by Capital Analytics. The session was about moving up from descriptive analytics to predictive analytics, an important goal. One of the participant polling questions asked about common barriers to improved data use. The top two items were; incomplete or messy data (55 percent) and knowing what and how to measure (27 percent). Those responses are frighteningly telling. If HR leaders are still largely struggling with what and how to measure, and face barriers in accessing the various needed data sources, they must first strengthen their  data foundation before they can credibly move up the data value chain.

HR’s current data-related focus is obtaining access to what has happened and moving toward what is happening right now. Its future step is predicting what will happen and advising on how to best prepare, adapt and manage limited resources to achieve business results. A number of HRO vendors want to help HR clients move up the data value chain. For example, IBM, Accenture and Wipro all offer advanced HR analytics as available additional services. Unfortunately, advanced HR analytics are an added cost item, and so far the vendor’s capabilities are ahead of most clients’ willingness to spend, and ability to use and leverage.

The first step is to build the data infrastructure for improved basic HR workforce reporting.  And I do mean workforce, not just service silo by service silo. Knowing what data you need, how and where you will get it and making sure it is valid should be a major part of your strategy and planning for HR and HR services delivery. Basic HR administrative software and outsourcing already provide improved reporting capabilities for many buy-side organizations. When selecting HRO vendors, understand what new data and reports will be available, and determine if there will be assistance for the retained organization in learning to use the new capabilities. When transitioning to a new or upgraded HR service platform, take time during configuration and implementation to wire in as many data elements as you can. If you do not collect the data, you cannot later analyze the data.

In part 2, I’ll take a look at why data matters on the path to the top of HR.

Linda Merritt, Research Director, HRO, NelsonHall