Geoffroy de Lestrange from Cornerstone OnDemand here explains how talent management and big data are changing the focus of core Human Resource and how you must prepare for a new future with Strategic Human Capital Management.
Gone are the Days…
Gone are the days of Human Resources (HR) being the ”soft” department, which focuses solely on people skills, and plays no major role in business strategy. By using modern technology, big data, and analytics, HR can take a step up the ladder and become a strategic tool to help businesses reach their targets and goals. In this article I will describe what I see as the new definition of Strategic Human Capital Management.
Using a strategic HR approach combined with the right People Data Management is what we call Core HR. A system that can handle all your HR needs, and is able to predict gaps in the business when it comes to things like recruitment, onboarding, learning, performance and succession.
Yesterday’s Human Resource Management
Core HR, in the traditional sense, has always been about information gathering and storage. It has captured things like personnel information, payroll data, benefits, and so on. Having a human capital management system in place has always been essential to keep track of employee data, and it’s common that most companies at present have a core human capital management system that’s focused purely around areas such as payroll, compliance and administration.
But today we find ourselves in a landscape where the job market is employee-led, and core HR functions are increasingly combining with talent management.
Attracting and retaining talent is becoming a major challenge for companies, and company leaders now want to align people and systems with overall organisational goals. Suddenly HR needs to be even more strategic and ensure the right systems are in place to support employees, whilst admin processes work seamlessly.
Moreover, they need to secure the durability of the company and its culture through strategic talent planning, moving from a focus on process and automation, to one of business impact and engagement.
Talent is the new core of Strategic Human Capital Management
So, how does HR move from a core human capital management system to a strategic human capital management system? Well, the most important thing is to keep talent at the heart – not just data processing functions.
Likewise, and perhaps of equal importance, companies must understand their business priorities first and look to HR technology decisions second.
Changing core HR for the sake of it, or because everyone else is, is not the right move. Data is now a resource for influencing business decisions – not just employee information, and today’s HR teams must be agile, business-integrated and data driven.
In light of this, HR professionals are now looking at new software solutions to replace existing outdated Human Resource Information Systems in order to unify employee data from an abundance of standalone applications, and ensure their new HR environments are systems of engagement instead of just systems of record. There are a few common scenarios that necessitate this kind of change – do they look familiar to your business?
Gathering Data for Focussed Strategic Human Capital Management
Many multi-national corporations that have grown through acquisition don’t have one single storage place for all their personnel data. Instead, they have dozens, or even hundreds of HR systems housing employee data, all of which are located in different regions or business departments. This means they have no clear vision of what’s happening across the enterprise and no way to report enterprise-wide.
Likewise, in a franchise context, franchisors have data about some employees while franchisees (those who have bought a franchise) may have data about other employees. This is despite their customers seeing the brand as one organisation and the employees working together in one place.
International companies, both mid-sized and large corporations, may struggle as well if there isn’t one system which gives a global view.
Updating back office systems: A Strategic Human Capital Management Approach
Surprisingly often organisations have an old, outdated back office system managing their employee data. It was probably implemented many, many years ago – perhaps even going back 20 years! It no longer fits the needs of the modern employee since it hasn’t been updated, and doesn’t allow anyone except members of the HR team to update the data. It’s inefficient and not up to scratch with our modern, mobile world where we can update things anywhere, anytime.
No budget for a Strategic Human Capital Management portal
A painful point for many is finding they’ve got no budget to buy a system to manage employee data. Everything has always been done with manual systems like Microsoft Excel or paper-based systems, and there’s no automated way to manage and understand what’s happening with employees.
Strategy, strategy, strategy!
Ultimately, neglecting or resisting the change that puts talent at the core of HR will only impact the business negatively in the long run. Unifying information and processes allows HR to focus on more important, strategic elements, such as ensuring talent pipelines and career progression.
A unified platform can solve many of the common challenges organisations experience with this change.
You must focus on your real business priorities when assessing HR technology and options. If you ask HR leaders what their biggest priorities are for the coming twelve months, very few of them will say: “Implement a Cloud HR system.” And yet, the overall measures of success for HR strategy typically do not relate to core HR processes, but to:
- strategic HR processes such as employee engagement
- being an employer of choice
- building a strong talent pipeline and
- employee performance.
Using a unified solution with a strong focus on Strategic Human Capital Management will help build an overlay from your talent solution, rather than your HR solution and ensure you can focus on strategic business impacts.
This means that in the future, HR could most certainly end up being part of C-level management (the highest level of executives in senior management). Where it quite rightly belongs, when used correctly.