Drowning, Starving and Looking For Growth
Want to know how you can drown and starve at the same time? Look at most HR Departments. Many are drowning in information yet remain starved for knowledge. Even those companies with above average growth and profits struggle to get meaningful insights, particularly when it comes to workforce planning to support future growth strategies.
A new research study, Workforce 2020 by Oxford Economics, commissioned by SAP, found that just thirty two per cent of high performing companies say they have ample data about their workforce, compared with forty per cent of companies with below average growth in their profit margins. At first glance this may look like an oxymoron, but it’s important to remember that underperformers typically look backward at their established employees with a view of what can be cut or improved. High performers tend to look forward. It’s a subtle but important difference.
For most underperforming organisations, workforce issues are an afterthought in business planning. I do have some sympathy for them as without the right tools in place, HR leaders remain blind to the bigger picture of what’s required to help the business meet its goals. (In other words, they don’t know what it is that they don’t know). They also tend to treat strategy as a list of things they’re good at, and be reactive rather than proactive with regards to the seismic shifts and major demographic changes unfolding around them.
I’ve said for some time now that in addition to gaining a much deserved seat in the boardroom, I believe HR will also play an increasingly important role in risk management. This is certainly echoed in the growing concern around recruiting and managing talent. Challenges, such as the lack of skills, ageing workforce, knowledge transfer, as well as the generational mismatches, and gaps in working styles and communication platforms between younger and older generations pose a significant business risk.
Analytics and data are important levers that help companies meet their workforce goals, and gain the critical insight required to take action in the right areas. That’s why, according to the Workforce 2020 study many high performing organisations have their eye on an even bigger prize beyond analytics – Big Data. Big Data enables organisations to analyse huge amounts of information in seconds and minutes to reveal previously unseen patterns, sentiments and intelligence. This speed and accuracy of insight enables managers to make better, more informed decisions faster, without drowning in Excel spreadsheets.
Some HR leaders don’t yet have this level of sophistication at their fingertips, while others just have their head in the sand. It’s fine to say, “I don’t know the numbers but I know someone who does,” but “I don’t know the numbers so I’ll ignore them,” will not move the business forward. HR leaders that ignore HR analytics initiatives because they haven’t familiarised themselves with them, or are simply resisting change, are in fact risking their own career success.
The days when HR data insight was just an interesting distraction or intellectual curiosity are long gone. Forward looking companies that tap into analytics can unlock their investment in HR data and find the hidden value in their workforce. As the research shows, there’s a strong correlation between workforce development and financial performance in key areas, such as revenue and profitability. High performing companies welcome the insight and understanding that data can deliver and have found a way of turning it into actionable knowledge. If HR is to maintain a business-level partnership with the C-Suite, it must create an ongoing cohesion between the workforce and business strategy.
Join the discussion around HR’s role in driving business growth by taking a look at this webinar with Ed Cone from Oxford Economics, Wayne Carstensen from Deloitte and Steve Hunt, SVP of Customer Value from SAP.
Tom Loeffert – HR Director SAP UKI