HRO and a Culture of Analytics

Recently, Bersin & Associates held a webinar on HR measurement and the need to create a culture of analytics to get to data-driven decision making. Bersin refers to four levels with HR metrics and workforce metrics as the basics. Integrated talent management metrics and business impact predictive metrics are the advanced levels.  Getting to the advanced levels is not easy to achieve and it will likely take several years for those with the vision and fortitude to make the journey.

Many HR vendors offer HR analytics tools including IBM. I spoke with several IBM’ers to learn more, including Steve Johnson in product management.  IBM’s Workforce Performance application is based on its Cognos platform. It is prebuilt with highly configurable HR analytic content from hire to retire with pre-packaged standard reports. It is available as a licensed product (on-premises or hosted) that has prebuilt connectors for SAP, PeopleSoft, and Oracle’s e-business suite. To ensure the application functions well at every level from basic to advanced, IBM has added SPSS predictive analytic software.

Designed to map to HR data from many sources, it brings in data internal to the client and from other applications from third party vendors — key in getting consolidated cross functional workforce information for HR’s many processes and subject matter areas.

IBM understands that HR analytics is a journey and measurement is in its own DNA. The application can be used from basic to advanced levels and extended from HR specialists -only to business unit HR partners and on to line managers as readiness matures. Reports vary by user type from pre-set dashboards and scorecards, to detailed operational reporting, and to ad hoc research by power users.

IBM starts from the viewpoint of business workforce questions HR needs to answer and advise such as: do we have the right mix of people to meet business objectives optimally, or what will our workforce age distribution in key jobs look like in 3 years, in 5 years?  After assessing client needs and interest, a discussion of the actual metrics follows and a starting point can be identified.

The Workforce Performance application is available directly from IBM. It is also available to IBM’s HRO clients and to other service providers who want to integrate advanced HR analytics capabilities into its service offerings. A typical client is in the 5K to 10k plus employee range and there is particular interest from high tech and global employers.

IBM has a user forum for its Cognos products and with the HR analytics users interested in learning more from IBM and each other, there may soon be a user group just for them.

Even the best tools and most capable service provider cannot make the whole journey, especially the cultural part, for a client. Do you have the strategy and roadmap for your HR analytics journey and do you have a HRO partner that will help you create a culture of analytics?

Linda Merritt, Research Analyst, HRO, NelsonHall

Hope for HR Analytics – HR is Inching Toward Measuring

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