Digital HR is thrown around repeatedly these days as ‘the next big thing’ in human resources. Bringing technology to antiquated systems and processes to a somewhat hitherto neglected world of HR, is touted to revolutionize HR.
Yet HR offices are also seeing increasing pressure to develop better measures. ‘Quantified HR’ is causing departments to completely relook at the ways in which routine tasks are done in great detail and what defines success.
While the digital future is welcome, HR professionals need to ask themselves one core question: Does Digital HR really matter more than Quantified HR?
Before we answer the above question, defining these jargons would be helpful.
‘Digital HR’ refers to the growing use of social media, mobile technology, analytics and cloud computing in standalone and networked services of the HR function. Whether through CRM platforms, apps, or integrated collection and outreach tools; HR is moving, slowly, into the same realm that other verticals in the same business have been in for many years.
‘Quantified HR’ reflects the growing emphasis and reliance on using data-driven processes. These processes collect, capture, analyze and act upon data related to recruitment, engagement, employee satisfaction, leadership development, professional development, employee assessment, retention and other HR functions. Quantified HR also covers the growing use of metrics to measure and assess the effectiveness of HR functions.
Back to the question. The key issue is one, we believe, of sequencing. One cannot effectively begin to use Digital HR tools unless time has been spent developing and mastering the rigor around quantification. Without concrete measures, and the tools to collect and capture those measures, Digital HR is merely bells and whistles. It's icing on top of a flavorless cake.
One needs to acknowledge the importance of data and the hidden value in it. What exactly does a data-driven HR enterprise look like? Below are a few snapshots.
To truly assess the impact of robust HR practices on the bottom line, companies need data from
multiple sources. This means correlation. For example, retention data against sales goals, results and managers. It means tracking the cost of recruitment, onboarding and training with financial information across departments and divisions. It requires clubbing of promotions and bonus structures to measures of employment efficiency, turnover, and even satisfaction. It allows organizations to assess the loss of key employees in financial terms and impact on overall strategic plans.
There are certain metrics which HR is used to obviously quantify such as retention and turnover rates, costs and time-to-hire. However, to truly be agile and robust, HR must dive deeper and fish out various other metrics and interpret their meaning in context to the organization. For example, employee absences? Are these a symptom of other issues? How do employee satisfaction surveys correlate to retention and promotion factors? How does productivity relate to employee engagement? By digging further into what HR metrics are and what they mean, the HR staff will not only gain credibility, but is likely to gain more buy-in for suggested changes.
Quantified HR is about getting the fundamentals correct! It is about having a firm grasp on the core functions of a modern HR shop and ensuring that processes are policies are shaped by what the data says. By focusing on measurements, HR departments will be better able to leverage the power inherent in Digital HR. While both are important, it's imperative that quantification comes first. Data literacy must be the first pursuit.
What after metrics? Data analysis and interpretation follow quantification. In the next step, HR needs to look for intelligent interpretation of numbers and meanings of random unstructured HR data. Technologies which break down, analyze, understand and interpret HR data the way expert HR professionals do within seconds. Contextual technology is the frontier.