The current toolbox in many HR functions is not ready for the future of HR

I had a talk with Julie Kristine Strange, CEO of Master Denmark, about how the role and methods of HR are changing as it is becoming more data-driven. Julie is passionate about the future of HR and is driven towards exploring and co-defining the future possibilities of HR. This interest builds upon a curiosity about how the current organizational changes of the people responsible for employees and the knowledge relevant for the core business will take form. Julie believes that HR has to reinvent itself and the way it creates value for the business. 

In cooperation with Frederik Bonde from Innovation Lab, Julie is currently gathering and analyzing data for the report: Future of HR. One of their findings is that HR needs to incorporate a more data-driven approach in order to cooperate with more parts of the company i.e. strategy, product development, risk assessment etc. – But what is the purpose of that and how do we do it? 

In a broad sense, the purpose of taking a data-driven approach in HR is to create more knowledge and better insights to optimize decision-making processes. With the hypotheses that all necessary knowledge to make the best decision as executive management does not always lie in the top of the hierarchy, it is important to mobilize the organizational knowledge that lies with the employees and bring it to the management or decision-maker to create an unbiased foundation of knowledge for future decisions. The current toolbox in many HR functions doesn’t include the capacity to gather necessary data and information from all layers of the hierarchy or the ability to mobilize and visualize the knowledge to make it actionable. 

The exact toolbox needed in the future of HR is hard to predict, but Julie recommends the following elements: Firstly, HR needs to complete a digital transformation in order to gain the capacity to aggregate data, analyze for patterns of general tendency, and convert the data to knowledge - as seen in many other areas of the company e.g. Marketing. Secondly, it is critical to develop our human capabilities, and especially three capabilities will be important in the future of HR: 1. Higher cognitive skills such as creativity, critical thinking, and complex information processing. 2. Social and emotional skills that include communication, adaptability, empathy etc. 3. Technological skills such as IT skills, data research/management, data analysis etc. At last, it is important to implement measurable goals and in some cases KPI’s in HR. The goals or KPI's cannot be thought of as static measures. They have to be based on an agile and dynamic approach that follows the state of the company. Including measurable goals or KPI’s in the HR strategy will create valuable data that may lead to new knowledge and insights and also enable assessing ROI’s (return on investments).

The methods the HR function are currently using to solve the issues relevant to creating value for the company exist of traditional methods, which has been practiced for decades. In contrast to other areas of the company, that are constantly redefining their area of expertise by evolving their capabilities, developing new best practices etc., HR has had a general tendency of only fine-tuning their current processes that have worked effectively until now. In order to optimize the HR function by creating more value with the people within the organization and gathering, organizing, and presenting the knowledge within the firm to the top management, it has to disrupt and reinvent itself from the inside. 

As an end to our conversation, Julie told me her recommendations she gives CEO’s that want to work with data-driven HR. 

-      Think big and start small. Before initiating an HR transformation consider the possibilities it will bring the company, the reason why you want to implement a data-driven approach, and what is the end goal you want to accomplish. When initiating the transformation, start small and specific. Visualize the process backward to divide the journey into completable steps. 

-      Make new friends. It will often make a difference to include multiple areas of the business in specific processes and tasks. This is also the case with HR. Include people with other mental frameworks when discussing HR and include HR when evaluating other business areas. This will enable and develop cross functional knowledge and innovation. 

-      Prioritize the time to consider and discuss the areas of the business that HR can bring value to. As CEO it is likely beneficial to demand a lot from your HR function. Use the demands as KPI's and dedicate the support for HR to succeed

Hear More

Julie will be speaking at HRtechX 2019, 21st of May where she and 60+ other speakers will share their insights. Julie will be speaking about the future of HR and will be joined on stage by Mads Voigt Hingelberg to reveal their report, The Future of HR, and present their final findings for the first time. Learn more about the conference at www.hrtechx.com/nordic