By David Swanson, Executive Vice President of HR, SAP SuccessFactors 

When I first entered the field of Human Resources at a manufacturing company many years ago we were called Personnel. As an indication of the less than strategic position we held in the company, we reported to the CFO, not to the CEO. This was not unique in the market as most organizations were structured similarly. The view was that HR was an administrative function responsible for hiring, firing and the associated tasks that fell in between. In fact when I became the lead for HR at the company, my boss, the CFO, introduced me as the new head of the Health and Happiness department. He thought it was quite funny. Unfortunately, it underscored the huge mountain to climb to get the same level of credibility as legal, finance, and IT.
 
Fast forward to the current HR landscape, and unfortunately some teams have not moved far from the administrative, Health and Happiness label. They are focused on perfecting transactions without really understanding the underlying strategic advantages we have in HR. In fact, according to Leaders 2020, a recent study conducted by Oxford Economics and SAP SuccessFactors, only 55% of the executives surveyed believe decisions made by senior leaders are data-driven, and only 55% believe decisions can be mapped directly to company strategies.
 
The CHRO has a view of the organization unique to any other executive. We interact with every level from the board to the individual contributor. If we have our eyes open, we can discover root cause issues around engagement and productivity that would be missed by many others.
 
We have access to a wealth of data which could be used to measure the impact of what we are doing, not just the activity generated. Yet for a variety of reasons we don’t fully utilize it. While our emotional intelligence is key to our success, using data and analytics to back up our insights is even more powerful.
 
Top CHROs use data to determine where to focus their team’s precious time and resources. They look at the characteristics of top employees, and then translate this information into a behavioral interviewing program that seeks to determine if a candidate possesses these traits. In addition, hiring people based on prior success factors can help new hires become more productive sooner. Understanding from a thorough analysis of why people leave can lead to a model that predicts who is at risk of departing the organization.
 
In today’s service-oriented market people have certainly become every organization’s single biggest asset. Competitive advantage is driven by innovation, which comes from a diverse and fully engaged workforce obsessed with customer satisfaction. These top organizations are led by CHROs who lead HR functions directly involved in the business strategy. They then translate that into a people strategy based on data analytics to measure a direct contribution to the financial bottom line.
 
There has never been a better time to be in HR; our leaders need us, our employees need us and our customers need us to be successful. While the administrative part of HR is still essential, top CHROs are as valuable as any other executive function. By using analytics we can show that value through measurable impact in ways we couldn’t do just a few years ago.
 
The challenge comes down to choices. Do we focus our time on perfecting our benefits programs or how we administer our year-end programs? Do we move toward focusing on measuring the impact of these programs on productivity and customer engagement? The organization is asking us to do the latter. Are we ready?
 
For more insights from the Leaders 2020 study conducted by Oxford Economics and SAP SuccessFactors, please visit here.