Trends, Product and Industry Insights to Help Create Your HR Tomorrow, Today.

HR Must Modernize to Meet New Employee Demands

Rick O'herron
Director CX Product Marketing

Attracting, retaining, and promoting your best people has become more challenging than ever in the high-stakes competition for talent. The talented, high achievers on whom companies depend on to compete and win now expect any information they need to be instantly available, whenever and wherever they need it, from any device. Successful companies are increasingly turning to data analytics to recruit talent from the outside or develop people from within.

Gretchen Alarcon, group vice president of product strategy at Oracle, spoke to us about these and other challenges faced by the HR practitioners with whom she's recently met.

What are the big challenges in the current state of HR practices?

The war for talent: The US has the lowest unemployment rate since 2001. More than five million jobs remain unfilled. This trend fuels a growing war for major talent that's putting big pressure on HR to deliver.

Another thing that kept coming up in all my conversations when I was in Europe last fall is how to manage multiple generations in the workforce. We were dealing with this in the US before the recession because baby boomers were starting to retire. Now this is a global issue because people are postponing retirement while a new generation of workers comes in. HR has always had to deal with older employees and younger employees but millennials have different expectations?they expect to get information instantly. Companies need to accommodate these changing expectations, whether it's managing or recruiting among different demographic groups.

An HR leader I met in Asia recently asked, 'Why are we even doing performance reviews? We don't want to manage our talent out of the business when we need to find the best places for our talent.

Instead of a single performance review process across the whole company, I think more successful companies are going to start hyper-targeting core roles and pay close attention to critical positions that drive the business. They'll emphasize performance reviews for those roles.

Big data and predictive analytics were big topics of conversation among business leaders last year. What is HR doing in these areas?

Most HR organizations are just getting started, but people are getting excited about the potential of using data to make better decisions. Where it gets interesting are the 'what if' scenarios. 'If I promote Jeff to keep him from leaving, what impact will that promotion have on his peers? Will that be the tipping point that makes Sally and Jack decide to leave?'

The right thing to ask is 'What are you going to do with this data?' This speaks to how modern HR adds value. For example, how could a manager use predictions for an early warning system? If data shows a person is at risk of leaving, the manager can have an informed conversation with that person. HR is looking out for the business and is acting as a consultant for managers.

When HR starts using data analytics, they often focus on spreadsheets and static reports. How long before they use data to influence and add value?

I think three to five years. Most organizations still need to identify which data they need and how they plan to use it. But I think the next big shift will happen in just the next year. Tech-savvy executives will expect better information and access. This might also speak to changing demographics as HR gets pushed by newer leaders to provide whatever information they need to run their business. If a manager has five hires available, they'll want to know where to position those five people so they have the most impact. They don't want to decide by gut feeling--they'll demand more data to make better decisions.

There's an element of big data that allows you to benchmark yourself against other organizations in your industry. You already create a lot of data in your own organization to drive lots of activities. This HR information gets richer when combined with financial information and CRM data. It gets even more valuable when you integrate third-party information. For example, if you're adjusting compensation models, you want to look at turnover, financial performance, and compare them to the cost of living where you're recruiting. All of those things come together when analyzing a compensation plan. When you create comp plans, using data this way will instill a level of confidence that wouldn't have been available otherwise.

How should HR leaders get started using analytics?

One thing we often talk about with customers is the 'awareness factor.' There are many ways to get analytics. You can put rules around certain metrics you want to see on a regular basis. Instead of reading standard reports that might be a waste of time, it's more useful to set a threshold for when turnover hits a certain percentage. If it hits that threshold, you want that report delivered to your inbox ASAP. You may also want your direct reports to be copied with the relevant data.

HR technology has evolved pretty quickly in recent years. It's moved to the cloud and it's social and mobile. What do you think will be the next big breakout?

It won't be technology so much as I think this year will be when we really see the profound influence of millennials. They're going to drive change.

At the same time, HR is really going to reexamine all their practices and processes?how they conduct career development, learning management, and onboarding. They're going to think about those things differently.

Two years ago, the question was should we put our HR processes on mobile? The answer was of course! Now the question is how much more can HR show and make available to employees? More access is better. They're going to be looking at a lot of that this next year.

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