Q: What are you seeing and hearing in the industry about talent strategies becoming increasingly data-driven?
There’s definitely truth behind the familiar saying, “People are our most important asset.” We are now seeing significant money being spent on processes to support proficient use of talent and organizational structures changing to increase the return on talent. Expectations of CEOs and chief human resources officers (CHROs) are expanding, and they are demanding access to information they need about the workforce to make business decisions. According to the latest PwC Global CEO Survey, 32% of CEOs reported that they have started or completed changes to talent strategies, with another 54% considering such changes.
The emphasis SAP is placing on the SuccessFactors suite is a clear indication that there is an overall demand to drive better use of talent, and this focus reinforces the expectation that HR come to the table with important insights to drive decision making.
Q: What hurdles do organizations need to clear when considering an overhaul of their talent management strategies?
The number one challenge we’re seeing is the need to help HR departments become more analytical, to use data and analytics to solve talent issues, and to build the underlying capability to deliver analytics to the organization. From the process standpoint, that includes building analytics programs, whether that’s strategic reporting, dashboards, surveys, workforce planning, or predictive modeling. In addition to that, HR departments need help understanding exactly what the service delivery model needs to be to deliver the most value to the organization. When those programs are built and defined, the next step is to enable HR departments with technology to deliver on those functions on an ongoing basis.
HR organizations understand that success at workforce analytics, especially where talent management is concerned, is an opportunity that isn’t just one of technology. The PwC Workforce Analytics practice is highly focused on helping clients figure out how to build the analytics that are valuable to the organization using a process-oriented approach and how to drive adoption of those tools. Only within that discussion do we start getting down to the right technology approach and using technology to enable this value.
Q: How is in-memory computing, and specifically SAP HANA, affecting workforce analytics today?
The SuccessFactors Workforce Planning and Analytics application is a specific area of focus for the PwC Workforce Analytics practice, because this software unlocks investments that have been made in HR — especially when combined with a broader talent suite. This application allows clients to get their hands on data that has been locked in transactional systems, and start to integrate that data and put it in the hands of non-technical users. This is a great first step into the cloud, because it fits immediately into the SAP environment and allows users to do something very fast without having to restructure all of the underlying applications. This is a very strong value proposition for many companies, and we’re actively working with SAP to help place the SuccessFactors analytics tools to help HR departments do two things:
- Alleviate a pent-up demand for facts, such as: How many high performers did we lose? Are the people we’re moving around the organization high performers or low performers? How many people did we lose in their first 90 days of employment? Actionable intelligence allows for decisions that are based on facts instead of anecdotes.
- Start to think about the insights that might exist when we roll current numbers forward. If you have 100 people in a group but finance has projected supporting growth to 150 for the next quarter, will you be short on personnel or over-staffed? And how will that affect operations? It’s about using data to take action today on insights you derive about the future.
Once the SuccessFactors software is generally available on SAP HANA, we expect greater flexibility with the platform, especially as it relates to its refresh cycle, ability to address both operational and strategic reporting, and functionality relative to predictive analytics.
Q: From a business-case perspective, is ROI easy to prove when an HR department is considering incorporating data analytics into an overhauled talent strategy?
On one level, the ROI is self-evident, and yet at another level, it’s hard to calculate. If a CEO or CHRO believes that having the right talent is the primary way to achieve business objectives, and you don’t have the information about that talent that enables the right decisions, then ROI is really a non-issue. At the other end of the spectrum, the ROI of making these decisions intelligently can be difficult to demonstrate.
Companies that don’t start working on workforce analytics today will realize, in a few years, they have been outpaced and can’t catch up.
Additionally, ROI needs to be viewed properly over time. There’s a window of opportunity here, and companies that don’t start working on this today will realize, in a few years, they have been outpaced and can’t catch up. When companies today are using data to break down anecdotal beliefs, they are creating a sustainable competitive advantage. This isn’t a light switch; it takes up to five years to build this capability to the point where it’s routinely providing a competitive advantage. So if your ROI analysis doesn’t allow you to start until you see your competitors outdistance you, you’re too late.
Q: What is the best way to start once an organization has determined that it is going to build analytics into HR?
Workforce analytics processes are unusual among business processes — in that most stakeholders aren’t sure what they want. They can’t accurately define requirements. So it doesn’t help to start from scratch from a technology standpoint and make them wait for two years to see results. It makes better sense to think about this in 90- and 180-day windows. It’s a good idea to start with a pilot approach, for example, figuring out the three metrics that matter most to a CEO and how to produce those on a monthly basis, even if it’s something as basic as pulling data out of an SAP system and manipulating it in a spreadsheet. Then use those pilot requirements to start building out the technology infrastructure. And there are a host of different SAP technologies that will help depending on the specifications of each client. Ultimately, the right technology is a key part of that decision process, but it’s more an outcome of where you’re trying to get and what results you’re expecting than it is choosing the technology and building a process around it.
When companies do it right and they start getting information out to the organization, especially ones that have been starved for the right information, we’re seeing the “start small, scale fast” mantra apply here; demands grow very quickly to bring even more analytics into the fold.
Q: What are some examples of short-term wins that play into the “start small” theme?
First, a library of a few strategic reports that an HR business partner should be using in quarterly business reviews would be a quick win, as well as reports that are consistent across the organization. Second is the dashboard, which involves identifying important metrics to put in front of a CEO. A third short-term win is identifying how to become predictive so you can make important decisions on things such as accurately predicting how many engineers in your R&D department are about to leave, or which of your top achieving salespeople are about to leave, and why? For a lot of companies, these sound like complex undertakings, but to start and see quick wins is much simpler than many people think.
Of course, cleaning your data, finding data standards, and integrating your data is absolutely important — but as enablers of the possible outcomes, not as the project itself. This is where we’ve seen organizations that allow themselves to be too data-driven or IT-led unnecessarily extend that runway to deriving a business value; meaning they focus internally for so long that they lose sight of the win.
Q: How can PwC help an HR organization position itself for success?
PwC comes to the table as a practitioner in how to build these analytics programs. That’s our focus: What are the valuable reports? What should go on a dashboard? How do we create that predictive model? That’s who we are on a day-to-day basis and that’s how we approach the client relationship. And of course our experience helps; we’ve recognized the importance of workforce analytics for a long time, while many treated this as more of a side interest. This is CEO-level information, and satisfying the growing expectations of what HR needs to deliver requires organizational support. An organization can’t do this on the back of an HR IT group that does reporting. The capability has to be built within HR to create and deliver this to the business, and that’s the value that PwC offers.