Digital-Driven HR Decisions: The Secret To Small And Midsize Business Success

Peter Howes

Part 8 of the “Leading Through Digital Transformation” series  

Whenever we hear stories about high-growth small and midsize businesses, we envision nimble operations powered by inspired and engaged employees. We imagine that managers of all levels – including the CEO – have built strong personal relationships with every employee. And, perhaps more important, decisions, big and small, are quickly and easily made and communicated company-wide.

For most firms, this ideal model is typically held as the gold standard; however, achieving it remains elusive for many. Leaders may try to transform the corporate culture with workforce training, process redesign, new go-to-market strategies, best practices, compensation perks, and more. However, none of these initiatives will be as impactful as digitizing HR decision making.

According to Oxford Economics’ recently released report Leaders 2020: The Next-Generation Executive – Leadership Matters for SMBs,” small and midsize businesses that are winning in today’s increasingly digital economy are doing just that. They are mapping the incremental progress of executive and employee skills and the workplace culture to an overarching digital strategy. This approach helps these companies to not only empower workers at all levels to participate in meaningful decision making, but also to adapt to decisions in real time.

digitalist-winners-have-streamlined-decision-making

Source: “Leaders 2020: The Next-Generation Executive,” Oxford Economics, sponsored by SAP, 2016. 

From intuition-enabled perceptions to digitally empowered insights 

The beauty of running a small or midsize company is the ability to visit the shop floor and store floor, listen to service calls, and engage with customers to get a sense of workforce effectiveness and future business needs. However, insight gained from these firsthand observations is prone to be colored by personal bias and limited to events that happened in the moment.

Most likely, the information that leaders don’t know exists is preventing the company from reaching its revenue and market potential. As a firm grows and expands into new markets, the criticalness of this information gap becomes more significant. Employees may not be fully trained to adhere to the government regulations of a new plant location or address the needs of new customer segments. Operational expenses may not be optimized without the right mix and number of available workers. Or worse, businesses may not be able to anticipate future demand as they determine which new job candidate they should consider recruiting, hiring, and onboarding and which existing employees should be groomed to take on more responsibilities.

Companies that are proficient in using digital technology to make meaningful decisions quickly are better equipped to determine how to invest money and resources to enhance business and employee performance. Not only does this capability make it easier to change processes, but it also gives companies a distinct competitive advantage over their much larger rivals.

Digitizing HR data to reveal its true value

Over the past five to 10 years, digital technology has made it easier and more affordable to capture, access, and analyze data. To adopt a collaborative, data-driven approach to decision making, some businesses are consolidating all information generated from HR processes into a single source and making it available across business units and geographies. From recruitment to learning and development, performance management, and succession management, insightful information is captured and analyzed to spot employee engagement trends, track performance health, predict future talent needs, and more. With established metrics and key performance indicators, HR leaders can uncover intriguing developments and look at events in real time and decide what action to take.

As more and more businesses adopt technology such as cloud, analytics, and mobile solutions, organizations risk being left out of the race for attracting and retaining the best talent if they do not digitize their HR data quickly enough. The first step is to stop assuming that leadership instinctively knows everything about the workforce and to start defining and implementing a comprehensive digital HR strategy.

To learn how your business can better prepare for the digital economy, check out Oxford Economics’ recent report “Leaders 2020: Leadership Matters for SMBs.” Be sure to check every Wednesday for new installments to our blog series “Leading Through Digital Transformation,” to explore the various leadership roles in today’s growing small and midsize companies.


Peter Howes

About Peter Howes

Peter Howes is a vice president at SAP SuccessFactors (SAP). With over four decades of experience in human resource management, as well as founder and former CEO of Inform, Peter has a distinguished global reputation as a consultant in workforce metrics, analytics, and workforce planning. He has extensive experience in developing HR information and measurement systems and processes, and over the past 15 years, he has developed the Inform Program, which had over 150 clients in Australia, North America, Europe and Africa before Inform was acquired by SuccessFactors. For the past five years, Peter has spent most of his time consulting global companies in North America and Europe. In addition, he has spoken at more than 500 conferences and workshops across the globe over the past thirty years. To date, Peter has been involved in more than 100 consulting assignments in workforce planning over the past 30 years.