HR Transformation

Many HR organizations have a desired destination in mind, one where they have the analytics capability to make predictions about their workforce for which they can then develop targeted responses. For example, they want to be able to predict the likelihood of turnover for a particular role or individual, so they can devise specific retention strategies. Or they want to predict which high potentials have the best chance of success as a senior leader. In our experience, there are many steps on the workforce analytics journey and organizations sit at different points along the journey based on their information maturity.

We all know the financial services industry (FSI) has been under the microscope in the past few years, but a new Deloitte Consulting benchmarking study focuses the attention on a different aspect of FSI operations: HR. What’s revealed may seem like piling on to change-weary FSI organizations. But, as the saying goes, the truth can set you free, or in this case, help you understand where significant improvement opportunities lie and how to take advantage of them.

People are billed as companies’ most important asset so routinely that we should be surprised they don’t all sleep nights in a corporate vault. Yet, in the hard-nosed, bottom-line discipline of managing organizations, the “soft skills” of people management practices are more often an afterthought than a core strategy linked to superior business performance. And while manufacturers’ workforce management practices have moved far beyond the personnel office of decades past—with its origins in managing masses of low-skilled workers in a pre-technological age—many have a long way to go to engage their people and connect these practices to shareholder value. Talent management for many manufacturers could be characterized as a less than ideal blend of new aspirations and old tactics.

Over a hundred years ago, H. G. Wells stated that  statistical thinking would one day be as necessary for efficient citizenship as the ability to read and write.1 Wells’ prescient comment is equally true of management and organizational behavior in the age of big data and business  analytics. In domains as varied as professional sports, medicine, consumer business, financial services and government operations, a consensus has rapidly developed about the power of statistical thinking to help experts make better decisions and businesses improve their operations. And a stream of best-selling books, movies and podcasts on the topic has piqued societal awareness of analytics as a catalyst for fresh thinking and change.

In his recent book Thinking Fast and Slow, behavioral economist Daniel Kahneman tells the story of observing army recruits out on exercises and his belief that he could spot the potential leaders amongst them. Years later, it turned out he'd been almost entirely wrong. His confident judgment had been a morass of bias, heuristics, and narrative fallacies.
We like to imagine that our powers of discernment are greater than the evidence demonstrates. Similarly, investment banks like to imagine that their fund managers are impeccable pickers—even though the data shows almost no one is over a significant period of time.

From an economic standpoint, it’s hard to lament the loss of the Wal-Mart greeter. The prospect of getting paid minimum wage to stand at the front of a store in a “How May I Help You?” vest is hardly the stuff that inspires future generations to dream big about their careers. Yet news in late January that the world’s largest retailer has removed greeters from the overnight shift at its 3,800-plus U.S. stores—and is redefining the role of daytime greeters, too—evoked a reaction that borders on disbelief. Analyst David Strasser of Janney Montgomery Scott called the strategy “risky,” while editorial writers at the Chicago Sun-Times admitted that the move “bums us out.” Never mind that customers will likely be better served by having those workers stock shelves instead. For some, the idea that a 30-year tradition at America’s largest private employer might end is cause enough to mourn.

PNC, a large commercial bank headquartered in Pittsburgh, Pa., has pioneered an analytical approach to linking financial performance, compensation and risk management -- demonstrating the value HR can bring to complex business problems by partnering with various stakeholders, according to Transformative HR, a new book by John Boudreau and Ravin Jesuthasan.

A new law that requires foreign banks to report information on their U.S. account holders may create some difficulties for expat employees. Smaller banks not wishing to accept the administrative burden may refuse to allow Americans to have bank accounts. It may also impact company payroll processes.

Brazil is on track for yet another year of above-average GDP performance. This boom, however, poses challenges for the country. Chief among them is a shortage of qualified labor.

Organizations substantially increased spending on learning and development over the past few years, according to the two new reports.
The American Society for Training and Development's 2011 State of the Industry Report finds that organizations in the United States spent $171.5 billion on employee learning in 2010, up from $125.8 billion in 2009 -- an increase of 36 percent.

When it's time for annual reviews at LendingTree, there's one question on every employee's mind: Am I a 1, 2 or 3? Managers at the online lending exchange rate workers on a three-step scale, based on individual goals and performance. The top 15% are told they are "1s," the middle 75% are designated "2s" and the bottom 10% are assigned "3s." Managers are also ranked by their respective bosses.

In the wake of the financial crisis, transparency is becoming a priority for a growing number of chief executives.  Some dispiriting news for business-school graduates: engineers and other technical experts are becoming more prevalent in companies' top ranks, according to two recent studies.

HR and talent management leaders are constantly striving to become more strategic. But more often than not it seems that when they are presented with a strategic alternative that really breaks new ground, they retreat and stick with the status quo. However, if you are serious about making a strategic impact and you take a minute to reflect, it’s hard to think of many things that could have more of a strategic impact than increasing corporate revenues.