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

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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Training HR Business Partners – Breaking New Ground for HRO Relationships

My August 27 blog focused on the importance of training recruiters – both in-house and outsourced – on how to leverage new school recruiting techniques, platforms and mediums in order to prepare for the hiring uptick that’s expected in 2010. This training is vital, as it not only aids the recruiting effort but also enables HR to help support the company’s strategic and competitive business objectives.

Broadening our view here to training which helps enable attainment of business objectives and better relationships between HRO buyers and HRO providers, a variety of HRO service providers hold user conferences which include educational components. For example, Ceridian has an academic program that offers resources and some training for client HR teams, and its user conferences always offer a few very well attended sessions that qualify for continuing education credits.

So I was very interested in Kenexa’s announcement earlier this week of a training initiative it launched for E. ON U.K., an integrated power and gas company. Kenexa’s new one-day developmental training program is helping E. ON U.K.: 1) embed HR guru David Ulrich’s business partner model – the intent of which is to “help HR professionals to integrate more thoroughly into business processes and to align their day-to-day work with business outcomes… focusing more on deliverables than doables…Instead of measuring process, business partners are encouraged to measure results’’ – and 2) assess the development needs of its staff.

The training simulates an HR business partner’s workday, in which participants are observed and given immediate feedback including career advice, developmental recommendations and a full assessment report.

To underscore the significance of this type of training, let’s define HR business partner. Internally, HR business partners support the business leaders and teams of each division/ business unit of their company to manage implementation and execution of HR processes such as workforce planning and performance management. When involved in an HRO engagement, the HR business partners in the retained organization – at least at the top ranks – have added responsibility for managing the relationship with the HRO provider in conjunction with the governance team, and ensuring results are achieved and qualitatively and quantitatively measurable.

HR business partner training, if engineered to specifically address best practices in HRO provider relationship management and objectives achievement, represents a monumental boon to HRO buyers and providers alike.

While I think it will take a while for this type of training to catch on and for success stories to arise in the marketplace, I thoroughly expect buyers beyond E. ON U.K. will take notice and look for their providers to provide similar training. Further, I believe other forward-thinking HRO providers will begin evaluating how they can offer this type of training. 

I hope both parts of the equation do, as it will help strengthen the relationship and extend the strategic partnership between HRO buyers and providers, and more easily enable the realization of business objectives expected from the engagement.

Gary Bragar, Lead HRO Analyst, NelsonHall