Fourth Industrial revolution is disrupting the workplace and business ecosystem massively. It's different from the previous three industries that humankind has witnessed so far - Steam, Electric, and Information Technology. The current disruption is a fusion of physical, digital, and biosphere world and agnostic to the size, geography, and industry. Organizations are required to change or respond proactively to remain fit for the future else get near to extinction.
In the time of such complexities and disruptions, businesses are required to be continuous learners and agile to technological advances in order to thrive. Digital technologies, Artificial Intelligence, and the ability to shine on data assets will be the key enablers of the future organizations. Data assets are becoming invaluable in making informed and unbiased decisions to respond to the fast-changing business environment. This radical shift will not be possible without Human Resources function evolving into a new avatar that takes an active role in creating the future organization. The future HR organization will be a digital disrupter with employee experience at the core, an agile & networked organization builder, and an HR analytics evangelist to enable the business to prosper during the time of change in the future.
HR Analytics is no longer a nice-to-have capability for HR. Proficiency and competence in using people data and deriving insights from it, telling the stories to influence the decision is an essential part of an HR professional’s job responsibilities. The business impact from the application of HR Analytics and the maturity level of the function i.e. descriptive, diagnostic, predictive, and prescriptive, are highly correlated. While this model tells the capability maturity of the HR Analytics function, it misses providing insights about adoption maturity at the enterprise level.
The below-presented maturity model helps organizations build HR Analytics DNA at the organization level and leverage this capability to their competitive advantage.
- Level 1 [Tribal] – A siloed and unstandardized capability with significant variations driven by a department. Usually, the strategy is disconnected, disparate measurement processes and technology architecture is very tribal. The KPIs measured are manual.
- Level 2 [Regimental] – Well defined, repeatable HR measurements within organizational, processes, and technological boundaries. Best practices are usually restricted to the regiment and not shared at the corporate level.
- Level 3 [Harmonized] - A unified corporate level capability of all regimental skills. Senior leadership sponsorship is in existence, and the agenda for HR Analytics is aligned with the CHRO’s goal. Best practices are leveraged. An enterprise-level impact is felt from the application of HR Analytics.
- Level 4 [Agile Adopters] - Evolved people, process, and technology across the enterprise - Ability to meet or exceed current and future requirements; Fast followers as the industry transforms.
- Level 5 [Market Disrupters] - Drives standards and expectations - C-suite driven; Globally integrated; Predictive; real-time metrics; Ability to define industry; transform business models.
While shifting through the levels, organizations are required to focus on four key ingredients, i.e., People, Process, Technology, and culture. The HR Analytics blueprint should capture the plan to build (people, process, tech) capabilities needed to pivot from the current maturity level to the Market Disrupters (Innovation Leaders). To drive this cultural change, senior leadership sponsorship and frequent strategic communication are critical to the success.
In the knowledge & digital economy, the workplace is converging, and so are future skills and talent requirements. Many leading organizations are using HR Analytics to their competitive advantage by uncovering future trends, building future-ready skills, and enable the right talent to be present at the right place at the right time. The McKinsey Global Institute estimates that companies using a portfolio of HR-analytics solutions could realize an increase of 275 basis points in profit margins, on an average, by 2025. This level of business impact is achievable only if HR Analytics is built as organizational DNA, not just a tribal capability.