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7 Challenges that People Analytics Must Overcome

People Analytics - Glass Bead Consulting 7 Challenges that People Analytics Must Overcome

I am excited about the role People Analytics will play in transforming organisations.  I have seen some real success stories where organisations have incorporated more data-driven decisions about people and work. 

David Green highlights some great case-studies in his article, 20 People Analytics case-studies, which includes, Virgin Media, who reduced sickness absence rates from 9% to 4% saving the business £750,000.

There is clearly a journey to be taken where we move from our current starting point, where we often distrust the data we have on employees, to a place where we can better predict sickness absence, attrition and productivity.

Most organisations are already on this journey to some degree. The percentage of companies that believe they are fully capable of developing predictive models doubled this year, from 4% in 2015 to 8% in 2016, according to research by Deloitte, “Global Human Capital Trends 2016”.   However this journey will have some challenges that we will need to overcome.

People Analytics can play a key role in reinventing organisations.  However we need to resolve some of the structural challenges to truly succeed.  I covered some of these themes in my recent presentation, The Role of HR in Reinventing Organisations: Embracing People Analytics, at the Workforce Analytics Summit in Sydney.

Despite the hype, there is low adoption of People Analytics at the moment – here are some of the challenges that I think we need to address and also some suggestions of how WE (in the broadest sense) can overcome these challenges.

As always, I would welcome your views on the challenges, and especially ideas, and examples of how to overcome them.

Challenge 1 - We prefer ‘gut feelings’ to make people-based decisions

"80% of HR practitioners say their company leaders still rely on 'gut feelings' to make people-based decisions"  according to a survey of Human Capital Institute members in partnership with Oracle.

What’s wrong with using ‘gut-feelings’ to make people-based decision?

Professor Rob Briner from Bath University explains in his article What’s the evidence for…Evidence-Based HR?  that “our intuition is a valid source of evidence, albeit a weak source.” 

Daniel Kahneman, in his book – Thinking, Fast and Slow described two main types of thinking well with their inherent biases.

When you are under time pressure for a decision, you need to follow intuition. There is nothing wrong with using our intuition or gut feeling, but as Kahneman has said “you should not take your intuitions at face value”

So back to the challenge for those with skills in People Analytics, if your business customers do not believe that data is useful then they will not ask for it, or use it, or believe in it.  Which is a fairly big challenge!

So how do we overcome this challenge? Maybe there is a middle way between the fast and slow lane?

What you can do:

Make sure the boss ‘gets’ using evidence-based data.  If you are the boss, then make sure your new hires also ‘get’ it.  

Make intuitive decisions more data-based AND our data-based decisions more intuitive

 

Challenge 2 – The Peak of Inflated Expectations

Emerging Technology Hype Cycle - Gartner Emerging Technology Hype Cycle - Gartner

In HR we have always had business problems, statistical knowledge and access to piles of data, so why the hype around People Analytics now?  Well the Cloud and Big Data sales machine is probably talking to your boss right now.  You know the pitch, “Analytics pays $13.01 for every dollar spent”.

Managing expectations on people performance with the CEO should be your job and as mentioned, People Analytics has delivered some good early results, but one of the biggest dangers right now is far too much hype.

Since 1995 Gartner has been measuring The Hype Cycle, the promise of emerging technologies, and shows five key phases of a technology’s life cycle.  Is People Analytics in danger of succumbing to the hype before it delivers benefits?

Peak of Inflated Expectations -> “Early publicity produces a number of success stories – often accompanied by scores of failures. Some companies take action; many do not”

Trough of Disillusionment -> “Interest wanes as experiments and implementations fail to deliver.”

So what if the CEO gets excited about HR once in a generation you might say?  What happens if we set expectations too high for People Analytics and do not deliver?  It will not be the first time that HR has over-promised and under-delivered based on “best-practice”.  At some point you will need new recruits in a competitive market which needs new software, but there’s only  so many times you submit a business case with a decent ROI.  What you really need is some early positive results.

What you can do:

Set realistic expectations on people analytics – aim low  and over-deliver.

Start with a specific business problem

Learn from the early adopters

 

Challenge 3 – HR doesn’t need Big Data, it needs Big Questions

“Without data you are just another person with an opinion” W.Edwards Deming

But, “Without questions, you are just another person with data”

There is a danger that People Analytics is a solution looking for a problem and in the “scientific method as an ongoing process”, the generation of interesting questions is a key step. 

To do this we need to know the business.

I had a client a few years ago, who trained a group of HR Business Partners as 6-Sigma Black Belts.  After the training, they demanded a data dump from Peoplesoft.  "What problem are you trying to solve?” and the reply was “We don’t know yet until we see the data…”.

The example highlights the need to solve business problems not analyse data.  Strategy is all about making choices, so if you run an analytics team, generate as many questions and hypotheses around a particular problem area as you can by casting the net widely.  

What you can do:

Generate many wide ranging questions and hypotheses which solves business problems

Coach Business Partners and HR into developing hypotheses and sharing the insights back to the business

 

Challenge 4 – We need the right tools to do the job

This paper is worth reading, “HR and Analytics: why HR is set to fail the big data challenge”  (Angrave et al, 2016)  published in Human Resource Management Journal. 

As you might expect from the provocative title, they don’t hold back :-

“the HR analytics industry, which is largely based around products and services, which too often fail to provide the tools for HR to create and capture the strategic value of HR data.”

In other words, our HR Systems, data and reporting tools might not help us answer the business questions we have.  Many HR operational systems were simply not designed for analytics, and although they are improving, I expect to see more sophisticated analytics functionality in subsequent software releases.

What you can do:

Keep discussing your needs with your Technology Partners

Collaborate with others in the industry to source great tools

 

Challenge 5 – No confidence in the underlying frameworks

To use a house analogy, there is no point having cameras & sensors, unless the house is structurally sound in the first place.  We need to have a roof, secure doors and running water before we can add sensors that optimise our heating, detect poisonous gas, detect intruders etc

As Max Blumberg says in his article, People Analytics: Who’s fooling who?   “if like most people you don’t believe in your organisation’s competency and performance management frameworks, then you certainly aren’t in a position to believe in the results of statistical analysis based on data generated by these frameworks. As the old acronym GIGO says, Garbage In, Garbage Out.”

What we are crying out for is a theoretical framework to test our hypotheses about people, behaviour, productivity and organisations.  We are not there yet, but I am optimistic that over the next few years we can develop the skills and knowledge to increase our confidence levels in people management.

What you can do:

Stop doing people analytics until you’ve fixed your frameworks.

Collaborate with academia and peers in other organisations

 

Challenge 6 – Show me the Money

The problem is, you can show the C-Suite pretty data visualisations of their organisation showing attrition, gender balance,  and average commuting time, but the hard truth is the CEO will only really listen when you link it to Revenue and Profits.  When it comes to employees, the holy-grail is increasing employee productivity.  We need to link as much as possible to employee Productivity to get ‘buy-in’.

What you can do:

Develop your own internal measures for employee productivity

Try and link your initiatives to improving employee productivity

 

Challenge 7 – Structural issues with HR Operating Models

I have been speaking and writing about some of the structural issues with HR Operating Models for many years (see for instance, Is your HR Operating Model Fit for the Future?  If the supporting structures for HR analytics are not in place, then the probability of success is lower.

A couple of structural issues with HR Operating models that many orgs sill grapple with are:

Working in silos.  In HR we have developed some great experts over the last few years (e.g. talent, learning, reward etc) yet we have also become a function of specialists creating more silos which makes it harder (not impossible) to work together as a whole to deliver HR (Business) strategy.

The role of HR Business Partner.  The role was introduced as a strategic partner and account manager for HR Services, however there have been challenges.  Many orgs are on their 3rd or 4th revisions of this role and HR BPs are key to solving business problems as key customers for an analytics service.   However we are in a transition phase, as described by “Most HR BPs won’t cut it…”   from Luc Smeyers and “Stop Hiring Data Scientists if you’re not ready for Data Science” from Greta Roberts.

We will never have the optimal HR Operating Model with managers, systems, HR experts working seamlessly together.  However we can strive to continually improve the model using People Analytics to help rethink many of our HR programmes and influencing how we deliver our people management.

What you can do:

Learn some of the lessons from others in HR Transformations over the last few years

Ensure Business Partners have good analytical skills and are inquisitive about the business. Provide coaching on basic statistics and people analytics where needed.

Continually evaluate the efficacy of our HR and Management initiatives

My “gut-feeling” is that People Analytics will help reinvent organisations.  We are in the early stages of a journey and we can all help by sharing methods, learnings and positive results.  We need to keep an eye on some of the near-term challenges as we move forward.   One key action within our control is to set realistic expectations and solve specific business problems.  This can get our business partners more interested into a different way of working.  The technology industry will probably evolve to roll-out improved offerings with time.  And our evidence base should get better as we improve data quality and start to ask better informed questions.  Although the ecosystem I refer to is complex, with diverse vested interests, we should continue to encourage sharing and collaboration as much as possible.  

 

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State of HR Systems Market Europe 2016 Sierra Cedar Survey Results

Sierra Cedar HR Technology Survey Results 2016 from a European perspective

Sierra Cedar HR Technology Survey Results 2016 from a European perspective

For the last 19th years, Sierra Cedar have been conducting a survey on HR System adoption.  This demonstrates admirable commitment to a market that ebbs and flows like the form of our star strikers in the European Football Championships (who are only on their 15th edition).  The survey is an invaluable resource to those working in the HR Technology ecosystem – the report can be downloaded here.  In this article I wanted to share some of the findings that caught my eye, but mainly to ask you to complete the survey for your organisation, before 8th July, so that this report is even more valuable next year!

The Big 2 still dominate – I am not talking about the Germany and Spain duopoly in Euro 2016, who have won most cups with 3 each.  In European HRMS adoption, the ‘Big 2’ tech providers, Oracle and SAP, dominate with 83% of the market.   SAP (HCM plus SuccessFactors) make up 52% and Oracle 31%.   ADP, Kronos and Workday make up 25%. This might surprise delegates who were at HR Tech World Spring 2016 in London, for example, noting the highly visible presence of CoreHR and Workday.  The ‘Big 2’ have their legacy customers, the onus is on the many challengers to prise them away and build their market share.

How much does this software cost? For large companies (with more than 10,000 employees), the average license cost per employee per year, is $116 (or €102).   For smaller companies with less than 2,500 employees, this cost is much more at $394 (€348).  This excludes implementation costs.  Now for this amount, you might even get you a ticket to one of the group stage matches in France.  In fact, why not spend the money on football tickets instead, your employee engagement scores will surely increase? *nervous laughter*.  When you have such highly paid employees on your payroll as Cristiano Ronaldo, who has a salary of €21m per year apparently, you want to get the most out of them.

Could wearable technology give us insight into players’ performance? 55% in the survey think using wearables will “increase workforce productivity”.  16% of organisations in the survey are using or evaluating wearable technology at the moment.  According to this article we might see Wayne Rooney cavorting around Old Trafford wearing a tracking device.

The most common pathway to an HR Technology Transformation, with 26.5%, is “Rip & Replace” which is basically moving everything all at once to the Cloud.  This is like selling your 3 most reliable players in a winning team – a tactic that is a bit risky!

Contrary to reading the industry press, not everyone is in the HR Cloud yet, it is estimated that about 50% of core HRMS is still on premise.  This might have something to do with the residual customers of the Big 2 taking their time on the upgrade path and working out options, and a rump of organisations where moving to the cloud brings more security and privacy issues.   One thing’s for sure, whichever country’s team wins in Paris will be in Cloud 9.

As you read the survey report, bear in mind the results are based on an adoption and do not represent market share.   In my view, it’s always useful to read these surveys for good background context.  This survey also highlights some of the trends the analysts are seeing and refers to useful frameworks used.  If you are considering making changes to your HR Systems, always go back a step to understand what your business really needs from HR and how this will support your HR Operating model. This article might also be useful – How to Earn your HR Cloud Tattoo.

Finally, make sure you complete the SURVEY before 8th July and good luck to your team in Euro 2016!

This article was a guest post on HRN Blog

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Five themes from HR Tech World Spring 2016, London

HR Tech World Spring 2016 London    The 2nd HR Tech World was held in London’s ‘ExCel’ centre – oh the sweet irony, and a pertinent reminder of how far we have come!  Here is my view of some of the themes emerging from the conference.

This was an excellent conference with good speakers, a mix of old and new and enough space for good conversations which is what the event is all about.

But first things first, here are all the presentations from HR Tech Congress in one place which is a fantastic resource to flick through.

Software is Eating HR

John Sumser declared “The end of the HR enterprise software era” at HR Tech in Amsterdam 2013,  we have now automated pretty much all we can.  Software continues to feast on HR, starting with the horrible bits we don’t like and leaving the tasty morsels to our managers and HR people and change superstars – well that’s the theory anyway.

Lots of orgs have moved to the Cloud, so we are accumulating lots of lessons and methods to internalise before embarking on our cloud journey.  There was a whole steam dedicated to user adoption for example with presentations from Rolls Royce and Cushman & Wakefield.  Before moving to the Cloud, give this a read, How to Earn your HR Cloud Tattoo, and maybe share your case-study, and tattoo, at the next HR Tech Congress?

Sierra-Cedar kindly shared their research findings and presentation on their, 2015-2016 HR System Survey.  Some findings caught my eye, including:

 

The ‘Big 2’ tech providers dominate in EMEA with HRMS adoption with 83% of the market. SAP (HCM plus SuccessFactors) make up 52% and Oracle 31%. ADP, Kronos and Workday make up 25%. This might surprise some delegates noting the presence of CoreHR and Workday for example.  The ‘Big 2’ have their legacy customers, the onus is on the challengers to prise them away and build their market share.

The average cost per employee per year for SaaS for large companies (>10,000 employees) is $116 and for smaller companies (<2,500 employees) this cost is $394.

Wearable Technology – 16% of orgs in the survey are using or evaluating. This is an interesting trend to watch which I highlighted in my recent article Quantified Workplace: Trust vs Technology? 55% using wearables believing the benefit to be “increased workforce productivity”.

Rethinking Organisations

Josh Bersin summarised Deloitte’s research “92 percent of companies believe that redesigning the organization is very important or important, making it No. 1 in ranked importance.  Companies are decentralizing authority, moving toward product- and customer-centric organizations, and forming dynamic networks of highly empowered teams that communicate and coordinate activities in unique and powerful ways.”

This is music to my ears! For too long, companies have spent too much time tweaking round the edges of on initiatives such as employee engagement.  This is often a distraction from solving the root cause of business problems and the looking at the big picture.

As we move to new business models and organisational structures, we will need to redesign HR, and the software that supports this.   This will quickly supercede some of the current HR debates around talent, performance management and employee engagement.

The winners will be those that embrace diversity

Diversity was a theme from this conference, including a presentation from Martha Lane Fox, who made a powerful case for UK plc to take a lead on the internet as a cause for good.  But we have some work to do…

Heidi Spirgi from the Marcus Buckingham Company shared research that should tie your stomach in a knot, with her presentation, Women & Technology, the findings speak for themselves :

Currently only 17% of people working in tech in the UK are women

AND

UK is experiencing a digital skills gap that is forecasted to reach 745,000 workers by 2017

60% of college graduates are women in Europe

The first good reason for diversity is fairness, allowing all member of society to flourish.

The second good reason for diversity, is that if your organisation does not pull its ideas from the widest talent pool to solve problems, then you are likely to lose competitively.

The concept of Diversity of Thought and this paper is worth reading.  As Dorothy Dalton has said, “how can we talk about gender as a ‘diversity’ issue when 50% of the population are women, it’s a balance issue.”  Lots more we can do here…

Challenges with People Analytics

There were some presentations showing success in the use of people analytics to solve business challenges such as determining office location, retention, absenteeism and successful recruiting in the Smart Data stream.

This year, the percentage of companies that believe they are fully capable of developing predictive models doubled, from 4 percent in 2015 to 8 percent in 2016.

This is a hot area, but in danger of not fulfilling its massive hype due to structural issues we have in HR such as skills, data, systems and robust frameworks.

Using a house analogy, there is no point investing in smart sensing technology when the plumbing and heating don’t work.  I will be writing more about the barriers to People Analytics in subsequent articles.

Startups disrupting HR?

The start-ups seemed to be even busier than previous conferences with well attended sessions and stands.   The main areas were in employee engagement, recruiting, learning, employee feedback, onboarding & employer branding.

The winner of the competition was Arctic Shores who use science and games to identify high potential millennials.  Here is a useful list of the start-ups from Faye Holland, “#DisruptHR – who will you make a beeline to meet?”

See you in Paris!

This was a guest blog for HRN Blog,"Five themes from HR Tech World Spring 2016, London"

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BPaaS Rising HR Outsourcing in the Cloud

BPaaS Rising HRNWhat is the impact of SaaS on HR Outsourcing?  I have written how BPaaS (Business Process as a Service) might provide a “Silver Lining for HR Outsourcing”.

One of the pioneers of BPaaS is OneSource Virtual, who are well known in the US as one of the largest Workday implementation partners.  They recently opened their Derry European Service Centre in Northern Ireland and plan to create 290 jobs by the end of 2017.  This is great news for Derry and also for prospective and current Workday customers in the UK and Europe.    I am delighted to share a conversation I had with Wesley Bryan, President, COO and Co-Founder of OneSource Virtual, who will be at HR Tech World in London next week. 

Thursday_2

 

 

 

 

 

 

 

Wesley Bryan, President, COO and Co-Founder of OneSource Virtual

Tell me a little bit about how One Source Virtual came about and what you do?

OneSource Virtual supports the automated delivery of Business Process as a Service (BPaaS) and supports the delivery of solutions exclusively for Workday. We empower organizations of all sizes by providing Workday deployment, consulting, training and in-application payroll services, benefit administration, finance and accounting outsourcing, and application management services.

It is exciting news about your new Customer Centre in Northern Ireland, why did you choose Derry?

Because we knew the next phase of our business was to launch our UK HRMS and Payroll services, we knew it would be strategically beneficial to have a service centre in that area.  After a long selection process, we finally settled on Derry because of its labour market, stellar talent, and the positive relationship its government has on businesses. The talent and workforce in Derry is absolutely unbelievable. We certainly haven’t regretted our decision.

What services will you be providing in the UK this year?

OSV provides UK AMS Consulting, Workday Deployment, UK Payroll and Tax Services, and will be launching an Employee Service Centre that will assist with Workday Helpdesk, Workforce Administration, Benefits Services, Document Management and Administration Services. In the latter part of 2017, we will also be providing AP Processing in the UK.

HR Outsourcing gets a mixed reception due to some tricky relationships in the last 20 years, is BPaaS less risky for organisations?

Absolutely. When BPaaS is used to outsource, we don’t have to go into a company’s system and takeover the maintenance of the software like a traditional BPO.  Through BPaaS, a company is able to outsource services within their system of record. This makes it less risky to the customer because their system is already in- house.  A customer can decide at any time to bring an outsourced service back in-house and we can make that change without altering their structure.

You have done 870+ Workday projects (initial deployments and add-on engagements). What is the no.1 tip you can give on a successful implementation?

Don’t underestimate the complexity in deploying the software. It is imperative to bring in a partner that can help you design and think through how you will utilize and configure the software.

At what point in the HR software buying/implementation cycle would an organisation consider BPaaS?

Typically and ideally during the buying cycle. The BPaaS delivery model is very different from your traditional BPO service model and if you want a true BPaaS offering, you have to be careful to choose a true multi-tenancy SaaS provider who can deliver a range of services that can be standardized across a variety of customers and ultimately be more cost–effective. If that is important to you, it should be discussed during the buying cycle.

Finally, what do you think is the most exciting trend in HR Tech in the coming years?

What excites me the most is the way systems are being built today.  It isn’t uncommon to see various platforms sharing information in real time. For instance you can log in to one platform by using your Facebook credentials. The possibilities with that type of technology are endless because you’re not limited to the information that is only in your database.

This was a guest blog for HRN Blog, "BPaaS Rising - HR Outsourcing in the Cloud"

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