HR decision-makers are often faced with a problem: How can a business take two of its most complex ideas, talent management and the organization's overall business strategy, and make them one? Involving both accounting acumen and real human insight into employee behavior, this is one of the more difficult tasks HR can tackle. Still, with the powerful HR management software tools now available to HR decision-makers, there's no reason any organization can't become a cohesive, smoothly functioning whole.
Unfortunately, HR professionals have been slow to adopt these powerful new tools. Korn Ferry reports that 64 percent of CHROs believe they are not adequately making use of the human capital management options that are out there. Even worse, only a single percent of respondents strongly agreed that they were properly integrating HR data analytics into their business strategy.
Given all there is to gain by doing so, the question is: Why?
Many Businesses Need HR Management Software, Badly
Put simply, HR concerns are increasingly synonymous with business concerns. According to Employee Benefit News, "Not linking tangible business outcomes to HR efforts closely trailed an inability to work well with or lead others (34% vs. 37%) as the top reason given for why a CHRO would get fired." That's because highly technical disciplines like modern finance have seen an incredible shift in valuation toward talent, from acquiring the best people to retaining them to maximizing their potential. That can mean tailoring hiring pitches to attract the best, benefits packages to keep the best and work schedules to evoke the best.
All of these tasks require a strong, working knowledge of both the organization's own workforce and the larger talent pool from which it will draw new members, and at small businesses with fewer than 20 employees, old-fashioned face-to-face HR strategies can still achieve this very well. Past the threshold of an even moderately sized business, however, rabid competition for both workers and revenue inevitably requires HR to exploit the power of modern data science.
CHROs Are Struggling to Keep up With the Pace of Modern Tech
Given all the reasons to focus on integrating HR pushes into the overall business strategy, why haven't CHROs flocked to the HR management software suites that make such analytics possible? One reason is that CHROs often lack a highly technical background, and can remain skeptical of new technologies for longer than other professions. Businesses with more technical or forward-thinking HR department heads can gain a serious advantage by embracing these tools. The ADP Research Institute® report, Fixing the Talent Management Disconnect: Employer Perception vs. Employee Reality in the U.S. Midsized Market, shows that using just traditional HR methods can lead to serious disconnects between employee and employer perceptions of a business.
Ultimately, C-suite managers are inherently averse to risk, and new technologies often seem risky by their very nature. The point that needs to be made to managers, and particularly HR managers, is that what's truly risky right now is letting competitors quickly streamline their processes and achieve a forward momentum that might slow down again. Data analytics itself is actually quite an old concept at this point; it's only specific applications that seem new or revolutionary, when in fact they are the continuation of long-term trends toward self-awareness and more effective internal coordination.
Software Tools Could Be Better, but That's No Excuse to Lag Behind
To be fair to managers and HR decision-makers, developers of HR management software have not always made it as easy as they could to see the true value of their software, especially given the incredible diversity of products that have arisen over the course of the past few years. For instance, a package might claim that it has tools to help with "the onboarding process" but fail to clearly lay out exactly how an acute understanding of data can help that process, specifically. If service providers educated them about how data allows businesses to quickly begin bringing in better, longer-term hires, the reaction might be very different.
It's an abundance of that sort of education, both from traditional product advertising by service providers and proactive self-education by HR professionals, that will distinguish truly agile HR departments from those that habitually drag their firms out of the top organizational tier.
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