Yet, more often than not, human resources has not evolved to become a strategic partner to the business. Often, company leaders question why their organizations even have HR departments, argues J. Craig Mundy, vice president of HR and communications for the Climate Solutions sector of Ingersoll Rand.
In this Harvard Business Review post, he urges companies to stop simply managing talent and instead use talent solutions to manage talent as a portfolio of investments, some of which will pay much higher returns than others.
As the World Economic Forum points out, in today’s global business environment talent is now the most scarce commodity on the planet. However, only 6% of worldwide HR teams feel they’re experts on the use of analytics in talent management today, notes Josh Bersin, CEO and president of research and consulting firm, Bersin & Associates. Only 20% believe that the data they capture now is highly credible and reliable for decision making in their own organizations, he adds.
Bersin advises those HR departments that seek to become strategic partners to the lines of business put into place processes, systems, tools, and expertise to answer the following questions:
- Should we hire or promote from within?
- Where should we source new candidates?
- What are the skills, backgrounds, and psychographic profiles that will most likely succeed in a given role?
- How many high potential leaders do we have and what is the risk of losing them?
- Where are our capabilities strong today and where are they weak?
- What capabilities do we need in the next five years and where are we strong in these areas?
- How well are people moving through our organization from role to role?
As workforces become more global and complex, management challenges increase exponentially, but advanced analytics can help HR and business leaders cut through the complexity to control labor costs and generate more value through the workforce, notes Deloitte in a recent research report.
While many companies have widespread deployment of ERP and other systems that create vast amounts of useful workforce data, much of that data remains locked in organizational silos, according to Deloitte. HR analytics can increase the return on a company’s technology investments by helping to turn the mountains of raw data into actionable and valuable insight.
For example, analytics is helping leading companies retain top talent and migrate churn by identifying employees who are potential flight risks. This analysis may include everything from past and current employee data and performance ratings to mentoring relationships, compensation levels, personal networking activity and even daily commute times.
The report goes on to note that there are multiple areas where HR analytics is having an impact in companies including:
- Forward-looking workforce planning by using modeling to anticipate future talent supply and demand
- Managing talent acquisition and recruiting effectiveness by using automation to predict which candidates are likely to rise in an organization over time
- Analyzing and managing top performers to confirm that they’re being used as effectively as possible
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