In the face of digital disruption, organisations are rethinking how the HR function can facilitate changes to the way a company engages with its workforce – with big data and analytics expected to play a key part. But there are still some barriers preventing HR from fully embracing such capabilities, as Freya Purnell discovers.
To create real business value, HR organisations need a modern HR and talent strategy that can meet ever-increasing employee expectations, and technology has a key role to play in this strategy.
Most HR directors are preparing plans to cope with business expansion while chronic skills shortages hamper such growth. They also need to develop their workforce and hold onto valuable talent while reducing costs, against a backdrop of digital change which is transforming business models, according to a panel of HR experts speaking at a recent Oracle event in Sydney.
Andrew Woolf, managing director – financial services, human capital, Accenture, said over the last 12 months, 90 per cent of all organisations have changed their operating model in response to digital disruption, which in turn means new roles are required.
For example, in banking, he predicts that tellers will disappear in the next three years, so branches will be used in different ways to help customers manage their wealth.
Mel Parks, global HR business manager, ANZ Bank, said that one of the key implications of digital disruption is in the changing pace of information.
“We live in exciting times but external change is happening so fast it has the potential to outpace HR’s ability to respond. Chief HR officers need to look beyond operational efficiency,” she said.
“We need to step up: be clear how we will use analytics and insight to create value; how we will leverage technology to enhance the experience of work; and how we will tap into our innate curiosity to prepare for, and respond to, the demands of the workplace of the future. The opportunity is compelling but only the most agile HR-leaders will directly contribute to outpacing the competition.”
A growing number of businesses are turning to analytics, and particularly cloud-based solutions, in pursuit of greater innovation, performance improvements and cost savings.
Aaron Green, vice president of human capital management strategy, Oracle APAC, said, “The tools now exist for HR to drive the next wave of transformation and become the intersection between the people, HR and business strategy, in turn, demonstrating its commercial relevance to the business.”
With business conducted from more than a single address, Green said having HR services delivered via the cloud should be a key foundational element for businesses to embrace.
“Businesses are demanding more flexibility from their systems. They want to enable their staff to break free from the shackles of the old way of doing things and have their key information, data and business tools available to them whenever and wherever they need them,” he said.
“At the same time, leading HR practitioners should look to combine HR-related data from multiple data sources into a comprehensive view, which can be shared across the company for coordinated workforce assessment and planning.”
It seems many businesses see this value – the Sierra-Cedar HR Systems Survey found that 58 per cent of organisations planned to deploy their human capital management technology in the cloud in 2015.
As far as adoption goes, Green said a base level of operational reporting is now ‘table stakes’ for organisations, but fewer are looking at big data and predictive modelling, such as ‘what if’ analysis. Particularly in HR, they are not always aware that this capability exists, which is obviously then a barrier to gaining more sophistication in the analytics area.
Ilona Charles, executive director, human resources at Telstra, said to gain more analytics capability, businesses often need new solutions to be added to existing systems to make it easy to consolidate big data and act upon it – and many haven’t invested in this as a priority yet.
“At Telstra, we know it’s critical, but we have disparate systems and we need to do some technology work first,” says Charles.
However, Woolf said with so many cloud solutions available, with low barriers to entry, businesses have no excuse for not dipping their toe in the water at least with big data analysis.
“Start that journey and you will learn very fast. It’s very easy to start,” Woolf says.
Having the right technology is not the only essential element for HR functions – they also need the right skillsets to gain value from data.
Woolf says HR needs to specifically recruit people who are expert in analytics, particularly in predictive analytics – an area very few organisations are truly using to gain value in HR.
Green said this will be a significant change for HR, which has never before been tasked with becoming comfortable with data. But in the future, he predicts HR professionals will need to be data scientists, making decisions based on the insights gained from their analysis.
And while the need for people with these skills is clear, Parks said the challenge is really how to skill existing HR people up in big data and analytics quickly enough to cope with the changing demands of the business.
One possibility is to look to other areas of the business, and how they are using analytics tools. Parks said ANZ has been using Tableau to look for patterns within its data.
“There are huge capabilities in other parts of the business around customer insights and funnel analysis – we need to use these skills to apply to the HR space,” she said.
There are also many opportunities to gain insights from external sources of information, particularly as workforces become more globalised. Woolf said data from LinkedIn, for example, could be highly valuable for HR functions, if it can be leveraged in the right way.
“Successful businesses will recognize the benefits of human talent and intelligent technology working side by side in collaboration – and they will embrace them both as critical members of the reimagined workforce,” he said.