The Rise of HR Analytics and the Talent Function
Time was, leaders of the HR function came through the labor relations discipline—I am of that vintage. HR leadership moved on to those more adept at organization design and cost effectiveness and further into leadership and leadership development (we can debate how and in what order). I’m convinced, however, that at the center of “future HR” leadership is HR analytics and the talent function.
I’ve been writing, speaking, and working for a while on future-proofing organizations through large-scale and continuous employee skill renewal programs rather than massive episodic restructuring exercises. When I retired from IBM at the end of 2018, it was clear that organization and leadership thinking and momentum had shifted—for the better!
At the center of the “future proofing” of the organization are those capable of shifting the skills base of an organization at an ever-increasing pace without wholesale and damaging replacement of the workforce. This means adapting the workforce continuously as an end to end activity involving hiring, compensation, benefits, trusted feedback to employees about their future, modern learning tools, supportive leadership, and assuring that those who leave the organization move on smoothly to the next phase of their life. At the center is workforce analytics and talent development.
Moving to my home turf, let’s look at this through the lens of workforce restructuring. Businesses have gotten used to using large scale separation programs to shrink organizations by reducing surplus capacity and no-longer-needed locations—and in major offshoring exercises to relocate the employment of people to new places to do business.
Today the major shift is neither capacity- nor location-related but based on skill and adaptability.
Rapid technology shifts mean that companies increasingly face skill shortages and surpluses in the same place at the same time.
In the days of serial, episodic restructuring at its worst, companies would cut their internal training budget to save money—and re-direct those “savings” to external separations to cut costs further. Thinking today is shifting. Restructuring is a combined internal and external exercise designed to move people from places where they don’t fit to places where they do—whether internal, within the ecosystem, or external. Today’s thought leaders now see re-skilling and restructuring budgets as complementary rather than alternatives.
Put simply, the “remove and replace” agenda is superseded by a “renewal” agenda that renders old-fashioned restructuring tools obsolete. Let me pull together a few themes that make the case:
- Employers that have long abandoned the notion of jobs or careers for life need to worry about the lifetime careers of the highly skilled people they hire today.
- Low hanging, often early retirement-based, voluntary exit programs are running out of steam as people seek to work longer and the skill mismatch appears much earlier—to people in mid-career who have a long employment runway ahead of them.
- In Europe in particular, new hires with in-demand skills are forced by outdated laws into the same separation pool as those with outdated skills—think about job titles like "IT specialist," "seller," or "project manager." The people most needed for a company’s future are the first victims of mandated “social” or “LIFO” selection processes, making voluntary separations essential—and at the same time more expensive or even impossible.
- Employee experience platforms like Glassdoor feature the stories of separated employees in those places where highly sought-after workers go for advice on the employers they are considering joining.
End to end future proofing of the workforce combines all the skills of the HR function with advanced workforce analytics at the center.
There are three key elements from the employee point of view:
- Employees need honest and trusted feedback about where their skills are today and what their prospects are for the medium-term future. This gives them both the information and time they need to make choices on how to keep their skills on track—either inside or outside the company. Being separated by a company for reason of outdated skills should never be a surprise.
- Continuous learning has to be a part of everyday life for every employee. Like restructuring, learning is not an episodic, “ditch to ditch” process. Making people feel that have a future means making them feel a part of the future through continuous learning.
- Massive skill shifts can be achieved today through radical mid-career learning interventions. Modern learning techniques like the boot-camps offered by companies such as General Assembly can identify those people most likely to achieve massive skills change in very short periods of time. Charlie Schilling, who runs GA, has demonstrated how an individual on a 12-week coding camp gets more actual coding experience than someone taking the subject as a major in a typical four-year degree program. Virtually all of those who successfully complete the program walk straight into another role—either inside or outside their company.
Which brings me back to talent and analytics. Restructuring used to be about legal compliance, works council negotiations, and separation package negotiation. It is today about segmenting populations, predicting future skills needs, identifying the propensity to re-skill employees, rewarding adaptability, offering honest and trusted feedback and coaching, listening, and offering them career choices.
It is all about talent management—not labor relations.