Leveraging technologies can drive HR cultural evolution (Guest commentary)

Workforce analytics help transform HR into a decision science that can demonstrate impact on company’s bottom line

The face of HR is changing. Previously, it was not uncommon for HR to be referred to as an administrative cost center. This was, for the most part, an apt description given HR historically delivered services that were primarily transactional in nature.

However, the increasing popularity of web-based technologies, enterprise-wide systems and social networking sites has enabled HR to reduce its administrative burden and shift its focus to offering services that are more strategically aligned with business needs. That is, technology has enabled HR to shift from a low value-added service to a strategic player focused on guiding future business decisions.

As a result, HR has undergone a significant paradigm shift in terms of information management. It is a shift in the value of HR information and how this information can be used to help managers and employees solve their own problems with meaningful data. It is the belief information residing in HR systems can be transformed into knowledge to help managers assess the performance of human capital, which can improve the quality of management decision-making.

Consider the building of an annual labour budget through the use of workforce analytics. These can be used to analyze contributing factors and trends over time to help managers uncover opportunities so they can take action to improve performance and control costs. This draws on statistics and research design and includes gathering data from HR and other areas. In addition, it attempts to set applicable standards and benchmarks.

Thus, when creating a labour budget, the practice of workforce analytics enables managers to make effective decisions with respect to projected head count. Furthermore, predictions can be made on employment status and the number of terminations and promotions planned.

This ability has transformed HR into a “decision science” and enabled HR to demonstrate that effective management of human resources can have a significant and measurable impact on a company’s bottom line. Techniques such as benchmarking, auditing and use of a balanced scorecard will become increasingly important. These tools will provide HR with valuable feedback that enables it to play an important role in increasing productivity.

Leveraging emerging technologies affords HR a significant opportunity to facilitate its transition from a transactional department to a strategic partner. It can signal to the organization HR is no longer the custodian and sole owner of information but a conduit for data, adding value to a process that will provide managers and employees access to relevant information.

Forging this strategic partnership means HR professionals must possess certain competencies: significant business knowledge, financial management skills and the ability to analyze data. Most importantly, HR professionals must become technologically savvy and develop the facility to use information technology to enhance an organization’s business intelligence.

Over the next decade, there will be significant pressure on HR to manage costs and deliver effective service. Being responsive and providing seamless service around the clock, all year, across an organization’s global network will be expected.

How HR chooses to embrace and adopt technology to optimize HR-related information will be a critical indicator of its effectiveness. If HR does not embrace these changes, it can become obsolete. If it does, it will gain credibility as a value-added business resource.

Organizations have recognized just how important this is and are allocating budgets in recognition of these developments, even in tight economic times. One-third of all organizations are increasing investments in HR technology systems while one-half have maintained budgets, according to Towers Perrin. In 2009, the number one investment reported is technology related to talent management.

However, change takes time and the path for HR can be fraught with skeptics. Changing their mindsets may be a challenge but is one that is clearly necessary if HR is going to continue to evolve as a strategic partner.

Julie Bulmash is co-ordinator of HR programs and a professor at George Brown College in Toronto. She can be reached at (416) 415-5000 ext. 6715 or [email protected].

Latest stories