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How HR, Finance and Strategy need to evolve for Organization Design of the future. | Part 6 of 6

Published by Concentra

Original image taken from the 1977 film “Capricorn One”

Original image taken from the 1977 film “Capricorn One”

*This is the final blog post in a series of 6. If you haven’t already, please read part 1, part 2, part 3, part 4 and part 5.

Whose roles will change as a result of the new analytical opportunities with People data? The potential for insight is an opportunity – but it could be a threat. In this section we look at what is happening now, key warning signs to look out for and the future of people analytics.

What is happening now?

People data has historically been the preserve of the HR Director. Yet many of the HR professionals that I speak to have seen their functions shrink while Finance and IT have grown. HR transactional activities (payroll, recruitment, induction, training, surveying…) have been automated and outsourced. The remaining HR professionals often do not have the training or aptitude to talk analytics with the Finance and Strategy teams. So the board of directors often looks to Finance to validate people data and carry out organisational analysis. Peter Cheese’s work at the CIPD, including a collaboration with CIMA has been seeking to address this.

5 key warning signs that People data is not well handled:

Warning sign Impact Gap type
If the HR team is asked to implement a new organisation structure presented to them by executives Risk of fragmented change process not fully thought out or bought into Org Design
If the HR and the Finance team do not use the same numbers for headcount or costs at each level Loss of HR authority in the boardroom Baselining
If the HR team cannot easily respond to Lord Davies’ questions on headcount split by gender, grade, performance and pay HR becomes tied down with manual data collection and analysis HR Analytics
If the business cannot say how many FTE are needed per role per year to serve the business plan for the next 3 years Lack of control of headcount, cost overruns, lack of ability to track Strategic Workforce Planning
If the business cannot analyse ‘through’ the data e.g. performance, skills or succession risks by client or process Unprofitable or dissatisfied clients and ongoing inefficient activities in the business Strategic HR Skills

What is the future of People analytics?

If analytical skills and the capability to take on the new systemic view are missing, it is possible that some organisations will take People analytics away from the HR team. If so, there is a serious risk that HR will lose the authority and capability to carry out Organisation Design, for whoever manages the data is in a key position to be able to define the future. This gives reason for concern, however, because there are some risks if HR is not involved intimately in the Organisation Design process. First, many angles of Organisation Design have direct impacts on people – from changes to line manager relationships, to changes of location, changes to job descriptions, changes to availability of roles at all. So if HR is not involved strongly, it is likely that some key aspects will be managed badly. Second, of course, a new Organisation structure might not be needed at all. The power of the new analytics might lead people to overemphasise the virtues of restructuring and to forget that an integrated approach to Organisation Design, some quieter organisation development steps and a consistent emphasis on delivery will be enough to deliver the strategic aims of the organisation. So I would argue that HR should not hand over responsibility to Finance or Strategy – it has to be closely in touch with the new potential of People Analytics, and it needs to have a structured framework for using People Analytics for Organisation Design.

Conclusion:

The designs of organisations will be different because of Big Data. We prefer goods that arrive on time, services that give us feedback, and recommendations that are tuned to our needs and preferences. But the process of Organisation Design isn’t a big data challenge. The process of Organisation Design is fundamentally driven by the unusually incomplete, bundled and reflexive and linked nature of People Data. People data is multiple-aspect with many-to-many links, differing fundamentally from the flat, single-aspect view of relational databases. Successful organisation design in the future will use all the traditional tools of ‘flat’ organisation analysis and supplement them with the new graphing tools. At last the organisation will be treated properly as a system. Organisation Design is not a Big Data challenge; it is a People Data challenge.