What’s Missing in HR Today?

Workforce Data That Really Matters…

What’s missing in HR today is workforce information that enables HR and business leaders to actually manage their workforce by applying rigor to their decisions about their people.

Yes, we have lots of HR metrics like cost per hire, turnover, training ROI, succession candidates, and HR efficiency. These metrics and others like them are important but they do not provide information that enables HR and business leaders to make grounded decisions about business strategy.

Decisions about people simply do not have the same data rigor and logic applied as decisions about customers, products, or finances.

Even more perplexing is that workforce expenses are often a company’s single biggest expense so managing the performance of the workforce would appear fundamental to sound management of the business. The Brookings Institute (2003) recently examined the primary source of market value in today’s organizations and how it has changed over time. In 1982, 62% of an organization’s market value came from tangible assets and 38% from intangible assets, e.g. quality of the workforce, brand and intellectual property. In 2002, the source of market value had a dramatic shift, with nearly 80% of an organization’s market value coming from people and other intangibles. The quality of the workforce and their commitment to their company create the greatest value in the marketplace.

The Human Resources function is responsible for enhancing the quality and commitment of the workforce through strategies, programs and policies. Today, those HR challenges are significant. Even though we are grappling with the worst economic downturn in 75 years, HR is being challenged to position our companies to emerge stronger and more competitive by:

• Retaining and Engaging Top Talent
• Promoting High Levels of Workforce Performance with Reduced Cost
• Preserving and Enhancing the Brand
• Maintaining a Highly Engaged Workforce

These challenges have been made more difficult by the lack of convincing evidence of ROI from HR initiatives. HR leaders have been doing their utmost to deliver, but have been hampered by a dearth of decision support information about the workforce that is rigorous, logical and convincing. HR needs workforce analytics that can be used to build and execute strategies and deliver ROI.

New Tools and Strategies – Segmentation and Employee ROI Process™

The positive news is that there are proven business tools and strategies that can provide HR and business leaders with workforce information that can make companies stronger and more competitive. They involve leveraging analytics to understand workforce attitudes, behaviors and performance, just like political and consumer researchers do.

Political and consumer research has shown that thinking is shaped by a person’s perspective. Our perspectives provide a filtering framework for our realities.

Marketing insights substantiate the same phenomenon. Not all consumers think or act alike and like-minded consumers apply a similar attitude and behavior pattern to their purchasing decisions. Marketing departments respond to these different perspectives with targeted programs to optimize revenue and customer loyalty.

Employees are no different. Employees think and perform in their own ways based on their perspectives.

A company armed with data rich insights into their employees’ perspectives is able to manage the relationship systematically in the same way that companies manage their customer relationships.

These different employee attitude and behavior profiles can be created by conducting a segmentation analysis on a new or recently conducted employee attitude survey.

Generally, 4 or 5 segments capture the diversity of employee attitudes and behaviors within most companies, ranging from most supportive of company leadership and direction to least supportive. Cheerleaders and Casual Fans are the top two most supportive segments, followed by a middle group of Fair Weather Fans, followed by two negative bottom groups, Naysayers and Tuned Out.

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Watch for our next e-newsletter as we delve into more detail on the strategic value of segmentation and the Employee ROI Process.