Gone are the days when an HR manager's work was dedicated to "hire, fire and retire" administration. HR leaders are now stepping up as strategic partners driving cultural change, succession planning, leadership strategies and workforce readiness. They work across the business and are accountable to top executives to support bottom-line results for the organization.
All of this requires them to be incredibly nimble, strategic and adaptive to keep up with the ever-changing dynamics of the 21st century workforce. Changes in the way we view talent today and major advances in technology have enabled HR leaders to contribute to strategic decision-making at the executive level.
I had the pleasure of speaking with some of Canada's top business leaders in a recent ADP Roundtable discussion, The Talent Agenda. Though their titles ranged from CEO to CFO, the dialogue around the shifting relationship between HR leaders and the CFO, and the changing approaches to how we evaluate performance was quite consistent.
The truth is, CFOs, CEOs, general operations staff and others all speak a common language: financials and metrics. Today's HR leaders are building their data fluency and learning to communicate better with the C-suite, which bodes well for the future of the Canadian workforce. But how does a company's HR team help executives interpret data? What does the CFO really want (and need) from HR?
Speaking the language
Ken Scott, CFO at Accelerated Connections, was one of our panelists, and he pointed out that "CFOs are pretty straightforward. We want to be shown exactly why a specific decision makes sense financially. When HR leaders talk about metrics, what they are really talking about is talent, performance and engagement."
HR professionals need to be able to deliver metrics that help CFOs understand the impact and ROI of labour costs, productivity, retention, and learning and development. HR leaders should also be letting their CFOs know that strategic workforce planning includes data that extends beyond simple demographics to include information such as tenure, job distribution and the skill sets required by an organization now and in the future. Most importantly, HR can show how using that information to make staffing decisions is directly tied to delivering growth.
EY recently published a study tracking the relationship between finance and HR at top performing organizations in North America. They found that at high-performing companies, the CFO makes a larger contribution to strategic workforce planning, and there is greater collaboration between finance and HR on this activity.
Big data and analytics
By now everyone understands the essence of big data: simply put, it's a set of data that is too big to analyze with desktop tools. But what does having access to all this data get you?
To use a generic example, the courier industry is a great case study of big data at work. The need for a large number of package handlers fluctuates with peak shifts and seasonal demands. They also tend to operate out of a number of different facilities nationally and internationally. The impact of staffing shortages, especially during the peak holiday season, would be dire.
To manage this risk, some courier companies have implemented more analytical elements in their applicant pipeline. This lets them analyze historical hiring data and track the real time status of every candidate in their system. With this data they can predict the probability of candidates being hired, the time required to hire them and where their talent pipeline may be a little light to meet forecasted staffing needs. They can then take action before the shortfall affects their clients.
This is a shining example of the value that HR analytics can deliver; however, many companies overlook this valuable opportunity. According to global research done by SAP, 78% of companies still have no HR analytics. Imagine if your company had no financial analytics? No operational analytics? No sales numbers?
Teaming up with the Finance Department
For HR leaders looking for a data-driven conversation with their CFO, a great place to start is, you guessed it, the finance department. Most companies actually have more data on their workforce than they realize, but lack the tools and expertise to pull insights from it. If, like many, you don't have ready access to data, the finance team should be your first stop: after all, they are the experts in data analysis.
Teaming up with finance enables the two teams to speak that common business language and develop a holistic story about the workforce and the company's competitive position. With this information in hand, you can accurately align your people strategy with your business strategy.
Looking ahead, HR leaders should start rethinking the core skill set in their departments. In addition to the basic HR skills, people management will increasingly require team members with deep expertise in data visualization, predictive analysis, general business, and project management skills.
As the HR department becomes more data driven, tasks such as payroll, recruiting, time and attendance and benefits management are going to need to be streamlined or outsourced to create more agile HR teams that can focus on business imperatives such as strategic workforce planning, culture and leadership.
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