Over the past decade, we’ve experienced unprecedented digital change in the workplace. Every part of our working lives puts us in contact with technology, from the programmes and platforms we use to get our work done, to those we use to engage with our employer. The variety of technology that we use means that organisations can now access more data on their people than ever before. This data insight has the potential to open doors for employers, enabling them to closely track costs and create an environment that really meets the needs of their people – but only if they have the right pieces in place.
Shifting from cost centre to strategic partner
This digital change is inextricably linked to the growing requirement for HR to become more strategic. This is being felt by HR teams up and down the UK and globally, as business leaders prioritise people as their greatest asset – and look to their HR teams to unlock their full potential. There’s also a growing expectation on HR leaders to report on their operations using data insight – something normalised by other key departments, including marketing and finance.
Over the past five years, the HR function has made decisive steps towards becoming more strategic – and there are indications that this shift is accelerating. In 2018, ‘attracting and retaining talent’ was by far the most pressing goal for HR leaders, prioritised by 82 per cent of those surveyed by Thomsons Online Benefits. When asked the same question this year though, HR leaders prioritised this objective equally with ‘enhancing employee engagement’. This shift is indicative of the increasing responsibility for HR professionals to add strategic value by keeping employees happy, committed and productive.
This is evidenced by HR teams’ increased focus on global wellbeing programmes. While research linking improved employee wellbeing with improved productivity has been around for many years, the growing conversation around wellbeing – and mental health in particular – is forcing organisations to prioritise this. According to the World Health Organisation, depression and anxiety cost the global economy $1 trillion per year in lost productivity, indicating that failure to address this issue at an organisational level can have significant financial implications.
However, even if we agree that wellbeing initiatives – and HR strategy in general – have a real impact on business bottom line (which we should!), the function still needs to prove this to the C-suite with hard evidence; data insight.
Transitioning from technology investment to data-delivery
Over recent years we’ve seen significant investment in HR technology, as teams race to get the right infrastructure in place to deliver both a great employee experience, and generate data insights to feed results back to the board. HR is shaking off its long-held image as a conservative function when it comes to tech adoption. Just 7 per cent of global HR leaders now class themselves as conservative in this area, versus almost two thirds who class themselves as innovators or early adopters.
However, the research also suggests that HR professionals are struggling to bridge a crucial gap between adopting HR technology and generating the people data insight needed to support and influence HR and organisational strategy. For example, 48 per cent of employers do not use people analytics to report on benefits take-up, radically diminishing their ability to accurately gauge return on benefits investment. This is incredibly concerning when 30 per cent of UK-based global employers spend upwards of 16 per cent of employee salary on benefits – equivalent to £3,542 per employee.
Data literacy within teams is cited as the primary barrier by global organisations not using or planning to use employee data to report on business operations. This is already a critical issue but will only become more pressing as HR teams forge ahead with ambitious plans for technology adoption.
Currently, just 39 per cent of global companies collect data generated from building sensors, such as employee footfall or desk time for example, but by 2022, 83 per cent plan to do so. This trend carries through when we look at wearables. Right now, only 33 per cent of global employers collect data from these, but this is set to soar to 81 per cent within three years. It’s imperative that HR teams have the people analytics skills in place to derive something meaningful from these additional data.
Augmenting HR teams with people analytics skills
Against a backdrop of global tech talent shortages, hiring talent with people analytics skills is an expensive option. Our research suggests that instead, organisations are finding their way around this and recognising the versatility of their HR departments by upskilling existing employees. In the UK alone, 70 per cent of organisations have trained existing HR team members in people analytics and 22 per cent plan to do so over the next 12 months. This will present a learning curve for many professionals but is also an incredibly positive move towards realising the full potential of the function.
In many ways, what’s happening in HR is mirroring what’s going on across organisations. Digitalisation is driving the demand for skilled employees; those with the creativity and the technical know-how to apply digital technologies effectively. The direction of travel for HR is no different – but arrival is perhaps more pressing. HR needs to be at the frontier of technology adoption to gain the data insight needed to help organisations get the most from their greatest asset; their people.