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Blog series — the 7 Pillars of HR Leadership

Posted on September 1, 2020 by

The 7 Pillars of HR Leadership

North America has lived through a number of infectious diseases and public health outbreaks in the past few decades, such as severe acute respiratory syndrome (SARS), Middle East Respiratory Syndrome (MERS), and influenza virus H1N1 (swine flu). However, what makes COVID-19 different from all other public health crises is the speed and ease at which it can spread, leaving behind a path of uncertainty — medically, socially, and financially.

Some organizations have had to cease operations for good; others had to make tough choices to survive. But almost every business has made adjustments in how they conduct their day-to-day.

New research from the Society for Human Resource Management (SHRM) sheds light on just how significantly employers and workers have been impacted by COVID-19. According to their survey of more than 2,200 human resource professionals:

40 percent of employers have had to shut down certain parts of their business.
83 percent of employers have adjusted their business practices.
71 percent of employers said they are struggling to adjust to remote work.
65 percent of employers said that maintaining employee morale has been a challenge.

Given the nature of this crisis, it should come as no surprise that HR will need to play an important role when it comes to redefining the new normal at the workplace. Not only will they need to redefine policies and processes, but they also need to lead on fostering a new employee culture and maintain employee spirits that reflect the post-COVID-19 reality. HR will also need to factor in other realities of living, such as monetary stress, childcare, quarantine, and other domestic situations that can blur the objectivity of the standard 9-to-5.

How the HR leadership role has changed due to COVID-19

HR leadership teams at many organizations have already taken the lead at communicating information about how to manage all the uncertainty surrounding COVID-19, and have also aspired to maintain employee morale. They have also been required to carry out other organizational tasks, such as organizing mandatory vacations, furloughs, layoffs, and other labor force reductions, sick pay policies, travel constraints, and work-from-home procedures.

They have acted as the liaison between individuals and government agencies, helping employees with state and legal programs such as the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), organization closure guidelines, and public security for stay-at-home orders. Finally, they now have the additional task of accurately capturing and securely managing employee-related COVID-19 data.

On top of all these changes, HR still must uphold the organizational policies and procedures to keep employees safe and healthy. As much as maintaining the CDC guidelines is essential, it is equally necessary to help the business maintain its operations as smoothly as possible.

How the HR leadership role will change post-COVID-19

In this blog series, we describe the seven most pressing challenges, trends, and possible opportunities in front of HR organizations as the enterprises they support come out of this pandemic and adjust to the “new normal.” Across the series we look at work from home, the contingent workforce, talent acquisition, learning, talent management and succession, the employee experience, and people analytics — the seven pillars on which post-pandemic HR leadership will rest.

HR analytics and its impact on the organizational decision-making process

Posted on July 10, 2020 by

From data to better decisions

Digital transformation is changing the organizational decision-making process and creating connectivity among people, processes, technology, and data. Organizations have the opportunity to be the disruptor or to be disrupted. Your timely and positive decision-making process can help your organization and the business grow.

But to be successful in the digital economy, just having access to more data isn’t enough. To make decisions based on real data, you need to be able to ask questions and have better answers. What is needed in these troubled times is the ability to provide employees, managers, and administrators the business insight they need to make better decisions — in return helping your organization become the disruptor, not the disrupted.

The challenge for HR in this new digital world is to fundamentally change the way it has worked all these years and enable transforming the organization’s business strategy into results-oriented outcomes through people. This necessitates HR creating new processes and new business opportunities — stepping beyond the automation of HR processes and service delivery. HR has to take a more top-down approach: start with business challenges, identify KPIs and measures that impact business results, and engage the total workforce in delivering organizational objectives. Through digital transformation, HR can and must bridge the gap to help drive the leadership agenda.

HR analytics drives a better decision-making process

In the business world, terms like HR Analytics, People Analytics, Talent Analytics, and Workforce Analytics are used interchangeably. But when you talk about HR analytics, it goes past the HR domain and starts interacting with other functions like finance, sales, and supply chain to find meaningful answers for the business.

Even the most evolved and accomplished HR organizations struggle to fulfil their corporate responsibilities:

Continuous transformation is not easy. HR has to manage Core HR and Talent processes efficiently and in regulatory compliance across the organization and throughout the employment life cycle.
Engage, develop, and deploy organizational talent across the organization all year round for maximum productivity.
Enable a better decision-making process across the organization with HR and talent insights, helping senior leadership make organization-wide decisions based on facts and big data.

Various organizations struggle to strategize and execute one or more of the above responsibilities, but progressive organizations are increasingly using KPIs, metrics, and big data in HR to respond to these challenges.

Why is there greater demand for HR analytics?

The role of HR organizations has evolved due to various business-defining moments in the last decade — the financial crisis of 2010, increasing globalization, diversity, the COVID-19 turmoil, and many other events. So HR has to be more strategic than just playing the role of an administrator.

New HBR research, “How Four Talent Practices Add Up to Big Revenue Gains,” suggests that four talent management practices have the potential to drive an additional 8 percent higher revenue per employee, for a total advantage over the average business unit of 59 percent:

Select managers with natural talent.
Select the right individual contributors.
Engage employees.
Add a focus on strengths.

To execute talent strategies well, HR organizations need analytics to help with their decision-making process. HR has come a long way, but the use of analytics within HR still lags behind other organizational functions by a large margin. As a result, HR organizations very seldom use data modeling and predictive analytics in attrition, hiring, and talent development, let alone linking employee performance with revenue growth. A SHRM report, “HR Lags in Using Data to Make Decisions,” found that 92 percent of companies are struggling to get the strategic insight they need to solve retention and other issues; 59 percent don’t currently have a system in place to monitor employee engagement; and 46 percent struggle to make better use of people data.

As a result, HR scorecards and dashboards usually depict primarily HR data, not the business impact of that data — because in most situations HR is not used to asking the right questions, so it does not solve the right problems. This is one of the main reasons HR is rarely involved in larger organization-wide decisions such as mergers, acquisitions, expansion into new markets, or moving from brick-and-mortar to digital.

HR trends

Recent Deloitte Global Human Capital Trends show the need for HR analytics (people data) and the lack of preparedness of organizations worldwide.

What are the biggest challenges of HR analytics?

Building actionable KPIs, metrics, and analytics in HR is not easy. Unlike a function like finance, which has used analytics for more than a couple of decades, HR faces many critical challenges in its analytics journey:

Data scientists specializing in HR — who can gather, manage, and report on data — are a rare commodity.
For useful HR analytics you need good-quality data, and more often than not HR cannot produce clean, high-quality data.
HR usually resides in its silo and very rarely integrates well with other organizational processes, making data modeling and building hypotheses on the connections between talent and business performance extremely difficult.
HR mostly follows a “best-of-breed” approach, with specialized software for almost every HR process (recruiting, performance, Core HR), which makes a holistic approach to solving business problems and tying actions and insight to ROI very challenging.
There is no such thing as uniform KPIs and metrics in the HR world — no two organizations calculate headcount or turnover the same way.
Finding HR analytics tools that can combine HR data, external benchmarking, and data from other processes together in a simple manner is hard.

Bringing everything together

The biggest challenge to business success through HR analytics is the lack of process and data integration — first within HR, then with external functions. HR needs to work very differently than before, but that is far easier discussed than done. Some tried-and-tested routes that apply to all organizations:

Bring diversity into the HR function. Get people who understand the overall business, operationally and functionally, to work with the broader HR team; they build business acumen in HR and can talk the language of business.
Bring in an HR-specialized data scientist who can build KPIs and metrics for HR with active support from the HR organization.
Involve HR in the highest level of planning and decision-making. This builds mutually beneficial relationships with other business leaders and helps HR understand their issues and objectives — and where HR can make a difference.
Learn and model tried-and-tested approaches from other functions: a supply-chain inventory model for people movements like hiring and turnover, a portfolio risk-management approach to turnover, shortages, and capability gaps, and customer loyalty models for employee engagement.
At first, build a few key HR analytics — like the risk of key employees leaving and its impact on productivity — that are easy to demonstrate and get senior-leader buy-in, rather than something like linking employee motivation to shareholder value.

The goal should always be to focus on business outcomes. Every HR initiative — Performance Management, Succession Planning, or Talent Acquisition — should relate to the organization’s overall objectives, like customer satisfaction, higher productivity, and revenue growth.

Other aspects where everyone can work together

HR has the capability of looking across the organization through the lenses of people, staff movement, and culture. Hence it can solve the problem of connecting people and processes through a variety of quantitative and qualitative approaches:

Identify the communication gap; analyze the organization’s communication flows, strengths, deficiencies, and bottlenecks.
Build a cognitive, cohesive model for problem-solving where cross-functional and cross-organizational teams come together for a particular cause.
Build organizational culture through job rotation; organizations that take job rotation seriously develop, over time, their own culture that makes all employees work as a single team.

Through these activities, HR can build an environment ready for superior HR analytics, helping it become part of the overall organizational decision-making process. As long as HR focuses on corporate objectives and comes out of its silos — and helps others come out of theirs — it can build amazing people analytics for everyone.

What should we learn from the recent COVID-19 crisis?

The recent and ongoing pandemic has probably changed the way everyone looks at business going forward. HR is front and center of the humanitarian crisis. All CHROs and senior executives should have learned that they must better utilize HR data and make human capital a better-understood and more strategic lever in business success and continuity — not only to manage the current situation but also to manage the workforce in the aftermath.

Post-COVID-19, organizations that focused on business outcomes and planned for possible future contingencies will do much better than those that lived in their silos. HR needs to quickly understand how the workforce is changing in terms of diversity, demographics, and capabilities — particularly as social distancing and work from home become the norm. As organizations let go of employees because of business losses, how will the face of employment change? Will organizations hire more contingent workers or more people who can work from home? What HR and senior executives learn from this crisis through big-data analytics will help them be successful in the near future and business-ready for future challenges.

SAP can help organizations be more data-driven and strategic

SAP, unlike other niche HR vendors, has decades of experience in business analytics across all industries and geographies. Hence it is well situated to help your organization build unique HR analytics for better decision-making. SAP can help you bring together all your organizational data — from people and enterprise data to big data, IoT, and beyond.

How SMB businesses can build a game-changing talent management strategy

Posted on June 21, 2020 by

Talent management challenges for SMBs

Building a talent management strategy is challenging for small and medium-sized businesses because of many factors like limited resources, branding issues, and lack of technology usage. This article highlights a few such challenges that SMB businesses face in talent management strategy, and the strategies that can be implemented to tackle them.

Critical challenges for SMBs

1) Attracting the right candidates. Small businesses find it difficult to attract the right candidates and always have a limited pool to choose from compared to large companies. These challenges are due to insufficient recruitment budget, lack of efficient recruitment processes, less use of technology in the recruitment function, and ignorance of brand building.

2) Lack of operational efficiency in HR administration. An SMB’s HR administration team is very small and must handle multiple responsibilities — recruitment, onboarding, employee performance management, employee benefits, training, and engagement. Due to a lack of technology adoption for the HR function, these responsibilities might not be accomplished with maximum efficiency.

3) Retaining talent. Even if the HR function can hire new talent, retaining it for longer periods is a tough task. SMBs often don’t have a dedicated team to manage and develop talent. If employees are not getting enough opportunities to grow their capabilities, they might feel lost, resulting in higher turnover that affects the morale of the HR function and other employees.

4) Developing employees and future leaders for succession. The HR function of SMBs may not have enough resources for employee development, performance management, and succession planning. Measuring employee performance and aligning it to business goals is essential, and without appropriate processes or tools, the HR team may not be able to manage performance.

Strategies to solve these challenges

1) Identify organization goals and align them with the talent management strategy. Before designing any strategy, understand the business goals. Talk to organization leaders to understand the company’s vision; these goals are the foundational element for deciding the type of talent needed. Create strategies aligned with the business goals — the HR function becomes a key strategic contributor when it is more engaged with business leaders to support their objectives.

2) Talent planning and recruitment. As small businesses often deal with a limited pool of candidates, they might face “the warm body syndrome” — when desperate for talent who can join immediately, you may end up hiring someone less qualified. Avoid this and never settle for less than the best talent. Your strategy must include both recruiting new hires and managing existing employees.

For recruiting new talent on a limited budget and timeline, focus on creating a brand story, talent pool development, and effective sourcing channels like social media, a career page, and referral programs. Around 92% of recruiters use social media to cast a wider net, so leverage LinkedIn, Facebook, and Twitter to access a large talent pool at no cost. A career page should include every perk and benefit and some employee reviews to gain trust. Referral hiring has the highest applicant-to-hire rate and is cheaper, faster, and effective — design simple rules and attractive rewards to turn your workforce into your best recruiters. Also develop a talent pool (past employees, rejected applicants, near-misses) and keep it engaged with newsletters and updates.

For managing and developing existing talent, recognize that the skill matrix is changing fast and finding people with the right digital skills remains a challenge. Recruiting new talent isn’t always feasible due to budgets, so consider upskilling/reskilling. Perform a skills-gap analysis of your existing workforce, design training programs based on employees’ interests and potential, motivate employees to take the training, assess effectiveness, and make changes to achieve the training goals.

3) Embrace digital technology. Automating recruiting processes with digital tools improves time-to-hire, reduces costs, and removes biases that happen in manual processes. SMBs can save hundreds of hours by using advanced HR tools at each step — sourcing, pre-employment skills testing, video interviewing, and onboarding. If you buy HR software, look for options that integrate several products in one platform to reduce the cost of purchasing special software.

4) Create a high-performance culture. The work environment drives how people behave and perform, and performance management helps engage and retain employees and improve overall performance. Performance management should be more than appraisals — it should be a culture. To drive it: set clear goals so employees can deliver; focus on each employee’s strengths and allocate work accordingly; identify and develop potential skills; develop a self-learning culture and incentivize new skill learning; and measure the progress of each training initiative and act to improve effectiveness.

5) Focus on employee engagement. Disengaged workers cause massive losses in productivity. To enhance engagement and work satisfaction and decrease turnover: provide the right applications and tools so employees can improve productivity; make employees feel they are climbing the ladder of success through training programs; reward their efforts with monetary and non-monetary benefits; and form committees based on employees’ interests and values, empowering them to build relationships.

Conclusion

Implementing an effective talent management strategy in this digital era can put you ahead of the competition. If growing organizations can connect employees to the purpose of the business, it will drive strong business growth and create a competitive advantage.