Worried about The Great Breakup? HR Professionals Have the Solution

People are the Heart and Soul of Every Organization

McKinsey and LeanIn just came out with their?latest research?about women in the workplace and it's a painful picture. Women are leaving corporate America in droves and the solution isn’t just about having more women in leadership positions or training programs for women. It’s about companies understanding culture and the employee experience. The answer is in truly understanding an organization’s people data.?

I recently moderated a discussion as part of?How Women Lead’s Get on Board Week with an esteemed panel of experts in the space to discuss why now is the time for boards to add HR expertise. We set out to explore:

• What skills do HR leaders bring that boards need?
• What is happening to cause this trend to gain traction??
• How has the move from reactive to proactive HR influenced this trend?
• What is people analytics and how has the rise of this practice influenced the boardroom?

You can hear this great discussion?here.

One of the more interesting aspects of this panel discussion was the focus on people analytics. People analytics can be defined as the deeply data-driven and goal-focused method of studying all people processes, functions, challenges, and opportunities at work to elevate these systems and achieve sustainable business success.?

As a former CEO of several services organizations, proactively managing the people function and having it as front and center to business fundamentals was critical. I have watched the transformation of HR from a function that focused only on compliance and problems, to a more partner-led strategic function empowered by data.

People analytics is often referred to as talent analytics or?HR analytics. Essentially, gathering and assessing people analytics can lead to better decision-making through the application of statistics and other data interpretation techniques. It firmly establishes HR as a forward-looking, more proactive function than it has ever been, which leads to smarter, more strategic, and data-backed talent decisions throughout the employee lifecycle—from making better hiring decisions and more effective performance management to better retention.

People analytics has evolved considerably from when it was first used in organizations in the mid-1900s. There has been a clear transition from prescriptive analytics to predictive analytics, with which organizations can now be better prepared to face the dynamism of their operational environment and be proactive rather than reactive. For example, sophisticated data science, interactive data visualization, and machine learning—all integral parts of people analytics today—were not a part of the process until a few decades ago.

People are the heart of an organization. According to the latest?Jobs Openings And Labor Turnover?report from the U.S. Bureau of Labor Statistics, the quitting trend lost some steam in July as the seasonally adjusted number of quits declined for the fourth consecutive month. However,?Statista, a market and consumer data website, reported that, “the number of quits has now exceeded the pre-pandemic high for 17 straight months, as more than 4 million Americans left their jobs in 15 of the past 17 months",?so—despite the slow-down—employees are still leaving their jobs.

The reasons for this trend are of course manifold, but one major driver appears to be that many workers are no longer willing to put up with the pay and/or working conditions they (perhaps grudgingly) accepted prior to the pandemic. “I certainly think that the pandemic has led many people to reevaluate their work and their priorities and what they want to do,” Elise Gould, senior economist at the Economic Policy Institute said in a statement to?Business Insider.

This persistent dark cloud situation for businesses has a positive silver lining: HR is now firmly seated as a business fundamental.

One could argue this should always have been the case as HR oversees all the primary employee-centric needs, ensuring business workflow stays smooth and protecting the organization's policies and requirements.

In recent times, HR’s role has evolved from its traditional 'fire and hire' work to focus more on employee engagement and management across the employee lifecycle—from attracting potential employees to exit. The trend toward hybrid and remote work has also heightened the need for managing the employee lifecycle.

Perhaps the most significant data point that underscores HR as a strategic imperative is the rise of HR expertise in the boardroom.?

As corporate boards continue to grapple with a number of HR-related issues—including implementing hybrid work policies; crafting environmental, social, and governance (ESG) initiatives; and managing an ongoing talent shortage—they are bringing on a record number of HR leaders to help them navigate these challenges. According to a new?report?from Allegis Partners, between 2017 and 2021, the number of appointments of HR leaders to corporate boards increased by 300%. This analysis is based on the Russell 3000, which represents 97% of the U.S. equities market by capitalization and identifies all HR leaders who served as a board director of a Russell 3000 Company as of December 31, 2021.

By the end of 2021, HR leaders held 250 seats on 242 boards, with 52% of appointments made between 2019-2021, and with 31 leaders sitting on two or more boards. In total, 8% of Russell 3000 boards count at least one HR leader among their directors.

While HR experts on boards remain outnumbered by management and financial executives, their growing presence signifies an increasing interest from companies to prioritize talent and human capital-related issues.

As with any positive trend, there are also watch-outs. As Head of People Analytics at Twitter Lauren Wegman so poignantly pointed out during our panel discussion, a company can choose to use the data for good, or use it for evil. Values and transparency are critical points to consider for employees, leaders, board members and HR practitioners as we move into this new era of HR informed by data.

What can you do right now?

1. If you’re an HR leader, build an HR strategic plan that considers the company core values in addition to the business goals and objectives.
2. Consider your analytics data and governance policies around them. Consider the data you are presenting to leadership and your board. Is it forward-looking or only reporting on what happened in the past?
3. Assess your culture. PrismWork has developed a proprietary culture assessment which measures a company’s culture readiness in four categories: GLEEM (Governance, Leadership, Employee Experience and Market). This assessment can provide guidance about which areas need improvement and can be used to create a strategic plan.
4. Culture can make or break a transaction. If you’re seeking to acquire or merge with another organization, PrismWork also has a CultureDiligence product which leverages the GLEEM framework to find potential watch-outs or areas to address in the 100-day plan post acquisition.

For all the HR leaders out there making a difference, I want you to know we hear you, see you, and want to support you.

Warm Regards,

Daina

Daina is the Chief Strategy Officer at PrismWork. She has nearly a decade of experience as an operator, director and advisor for public, private, PE and VC-backed companies. Her unique background of operational leadership and executive coaching experience guides her advisory skills helping companies to build and manage global teams, establish new categories, optimize marketing, nurture company cultures, and deliver results across small, medium and large organizations.??