Talent is critical to the success of any transformation effort, yet the human resources department is not often seen as a strategic partner, as Hannah Prevett reports
Metro Bank is a trailblazer by anyone’s reckoning. The first new high street bank in 150 years sent eyebrows skywards with its extended opening hours and pet-friendly policies when it launched in 2010. But what sets Metro Bank apart isn’t the fact that it hands out free dog biscuits – it’s how it relates to people both inside and outside the organisation.
“Our view is very simple: how we treat our colleagues is how they’ll treat our customers,” says Danielle Harmer, Metro Banks’s HR director. Using data and analytics to determine how happy and loyal employees are is vital to building a strong business, she explains. “We’ve invested really quite heavily for an organisation of our size and maturity,” says Ms Harmer. The bank measures all sorts of data, from benchmarking attrition rates to identifying potential pools of talent and measuring referral rates.
Most organisations now recognise that there’s a link between people and the commercial success of a company, says Peter Cheese, chief executive of the Chartered Institute of Personnel and Development (CIPD). “The people agenda is now much higher on the business agenda. Many issues that were often previously seen as the sole domain or concern of the HR department, such as trust, behaviours, and employee engagement and wellbeing, are now recognised much more widely as central to the key challenges businesses face following the economic downturn, in creating more productive, resilient and sustainable businesses for the future.”
But not all organisations have defined a clear HR analytics strategy. This is what prompted the CIPD, Chartered Management Institute, Chartered Institute of Management Accountants and others to create Valuing Your Talent, an open source project which aims to produce best-practice guidelines on measuring people and organisational metrics.
Anthony Hesketh, senior lecturer at Lancaster University Management School, says how organisations invest in their workforce could make the all the difference when it comes to recruiting the brightest and best talent.
“If one of my soon-to-be graduates is looking around at various organisations in terms of where they would like to invest the human capital that they’ve rather expensively acquired through their university education, they don’t simply just want to look at the propaganda they read in an annual report. They want some real evidence about how they will be treated, how they will be invested in. They want to know what the employee-value proposition is,” he says.
Choosing what to measure – or what not to measure – is the name of the game, says Valerie Lardy, a talent and organisational development consultant. “People measure absenteeism, but I don’t think it’s valuable unless it’s an issue. What people do want to know is are we losing our best talent? How many have left? Are we improving month after month? How many of our top leavers have we promoted from within? What openings have been filled from within?”
The problem, says Ruth Svensson, practice lead for talent management at professional services firm KPMG, is that many organisations don’t know where to start. “They have no idea how to sort it out. And to sort it out is time consuming and could be resource intensive, depending on the size of your business. Some of my clients have 180,000 people globally. Others don’t even know how many people they have. In this case, just getting the basics right is going to take some time,” she says.
Leading organisations focus on improving the business application of talent analytics, rather than just investing in analytic sophistication
Arguably, employees need to drive this transformational change which should not be the responsibility of managers. Jean Martin, executive director at CEB, agrees that giving workers some level of autonomy about how they carry out their work is crucial. But she notes: “The challenge for leaders is to ensure that employees are working as efficiently as possible. We are seeing a shift from the ‘top-down’ approach to increasing productivity, to one that is more collaborative.”
The volume of data available to HR has increased exponentially over the past 30 years, overwhelming organisations with a wide variety of possible metrics to track and report. But the companies that are able to turn their data into insights are focusing on improving the judgment of their staff and how they apply what they learn from analytics.
Most organisations may not yet be realising value from their HR talent analytics, despite upgrading technology, purchasing high-end analytic techniques and hiring more skilled analysts. So leading organisations focus on improving the business application of talent analytics, rather than just investing in analytic sophistication.
It’s true that the modern HR director has to be more widely skilled than in the past if they’re to create a truly data-driven function. And sometimes they’re found wanting, says Ms Lardy. “Companies have got the HR analytics capabilities, but sometimes they don’t have the HR leaders able to build the bridge between the business objectives and that data. And that’s the link that absolutely needs to happen.”
Katie Pearce, HR director at Molson Coors, the beer company, says upskilling within the human resources department is essential. “Sometimes HR is not very good at focusing on its own internal team and development as it is so busy supporting the business, but a highly capable HR team will make all the difference,” she concludes.
TALENT WAR RAGES IN SAN FRANCISCO
A desire to incorporate a more effective use of data and analytics into the HR function was enough to persuade Monika Fahlbusch to jump ship from retail to high tech. She is now senior vice president of global employee success at Salesforce.com, the global cloud computing firm.
Salesforce.com is headquartered in San Francisco where there is a bitter war raging for talent. This could present a problem for a company growing by more than a third each year. “We have had a newness problem on our hands – we’ll hire 4,000 people this year,” says Ms Fahlbusch.
Having a savvy approach to analytics helps Salesforce to identify future skills gaps, she explains. “In technology there are niche functions, niche skillsets that are emerging, and I’d better know where I’m going to be able to find that niche skillset. Do I need to start looking at pre-college curricular in high schools to go get that? Do I need to identify that it actually doesn’t exist and I’m going to be better building it within Salesforce? I have to know that because we’re hiring thousands of technical people and most of those people today are in San Francisco,” says Ms Fahlbusch.
“That is a very real element that I should understand and I need to be looking at data to tell me, and to tell our head of engineering, when we might reach saturation in San Francisco. I happen to know the answer to that question.”
FORENSIC EXAMINATION OF WORKFORCE
For Caroline Smith, managing director of HR at BT, getting the technology and systems in place is the first step to transforming the human resources function to be more data driven. “It wouldn’t be uncommon for some organisations to be managing some of their people on multiple systems, which can include Excel spreadsheets. This means it’s impossible to get an accurate picture of your data across the organisation,” says Ms Smith.
BT is halfway through a two-year HR transformation project which, among other things, aims to give the business’s leaders better visibility of its future workforce. “For many organisations, we now know that the skills we had to get us to where we are today are not the skills we’re going to need to achieve our ambitions for the future. So being able to figure out really forensically what workforce you need, what skills, what location, what experience and exactly when you need them will be critical for many organisations,” she says.
There are some steep learning curves. Learning to trust the data is one, she says. “Often, because we have been lacking both the data and the tools or techniques to process it, we have probably made decisions based on our experience and, to some degree, our gut feel.
“The biggest shift for us is to accept what the data and insights are telling us, and not to try to explain it away too much based on our intuition. I think that’s quite a mindset shift away from how we may have operated in the past to how we need to operate in the future,” says Ms Smith.
EMPOWER HR WITH ANALYTICS
Build relationships with key stakeholders, not just with IT, but with finance, marketing and all other functional departments.
Get sponsorship from the top. The board needs to know what you’re measuring and why. How will gathering this data help the organisation meet its obligations to shareholders?
Speak plain English. The best employee engagement surveys encourage participation through the use of simple language. Don’t bamboozle your staff with business rhetoric and management speak.
Align metrics with business goals. If a talent shortage is lurking on the horizon, why are you measuring absenteeism? Where do you need to win to ensure you stand head and shoulders above the competition?
Upskill the HR department. Now that the more basic functions have been outsourced and offshored, every member of the HR team needs to be packing a punch. Invest in training and development for the personnel department.
Become a thought-leader. The HR director needs to have the confidence to fight their corner. Understand why you’re doing this and be able to articulate the message to everyone in the organisation, from the chairman to the intern.