Is HR The New Moneyball For Organisations?

Duy Nguyen

For those of you who aren’t familiar with the book (and subsequent movie starring Brad Pitt), Moneyball: The Art of Winning an Unfair Game, written by Michael Lewis, is about the Oakland Athletics baseball team and how their GM used statistical, analytical, and evidence-based data to assemble a competitive baseball team, despite their disadvantaged revenue situation.

By re-evaluating the strategies that produce wins on the field, the 2002 Athletics, with approximately US$44 million in salary, were competitive with larger market teams such as the New York Yankees, which spent over US$125 million in payroll that same season. Because of the team’s smaller revenues, Oakland was forced to find players undervalued by the market, and their system for finding value in undervalued players had proven itself to the point of bringing the team to the playoffs in 2002 and 2003.

Sound familiar? In an ever-changing world, many organisations and HR departments are having to deal with the problem of trying to do more with less whilst trying to keep up with the changing pace of business.

Budgets and headcount either remain flat at best, or decrease. The challenge of HR, aside from getting overlooked for budget approvals to help them make an impact, is that they are not being taken seriously or seen as strategic enough to drive business strategies.

How can HR get a seat at the table?

I want to take a trip down memory lane and look at how IT got their seat at the table. We can all agree that when it comes to budget approvals over projects in an organisation, the CIO is placed higher than the CHRO in priority. But this wasn’t always the case, and not so long ago, IT departments didn’t have quite the voice at the table as they do now in driving business decisions.

From as far back as my research can tell me, the CIO role was first defined in 1981—which is not all that long ago. Back then, they were simply seen as the IT managers of an organisation, with no real strategic input at the executive table, and just the people that managed the hardware, software, or data processing in an organisation.

Then a number of things happened—such as the Iinternet, open systems, connectivity, and Y2K—that forced them to change and elevated their position. I won’t go into the history of this too much (although if you’re interested, there’s a good writeup on the history of CIOs here).

Fast-forward to today: A CIO in the modern organisation is required to possess business skills and the ability to relate to the organisation, as opposed to being a technological expert with limited functional business expertise. The CIO position is as much about anticipating trends in the marketplace with regards to technology as it is about ensuring that the business navigates these trends through expert guidance and proper strategic IT planning that’s aligned to the corporate strategy of the organization.

CIOs have become more embedded into the business. For a CIO, it is no longer just about technology, it is all about the business. So how can HR get a seat at the table?

CHRO need to step into being more about the business

So the challenge for HR is to pick up skills in marketing, procurement and finance, in a similar way that IT had to, and use the data to help drivers of the business to come up with workforce models to deliver real business outcomes.
How HR can use data to play a more strategic role in the business?

Going back to my Moneyball comparison, in today’s digitally enabled world, the role of HR is fast being revolutionised, with people analytics being more of a focus point in 2017. While the discipline of people analytics is not new, it’s strategic application as both a HR function and a corporate one is still being established.

In Deloitte’s latest Global Human Capital Trends 2017 report, 71% of companies considered people analytics a high priority in their organisation , with companies correlating business impacts to HR activities remaining similar to 2016 (around 51%).

However, for businesses to make strategic decisions, HR departments are increasingly required to not only understand the analytical data behind an organisation’s workforce, but more importantly, to strategically think about how this information can be used across the organisation to address the core business issues – which, in addition to attracting and retaining the right talent, includes boosting the bottom line.

A changed mindset can help HR deliver more strategic value

With today’s innovative HR systems, people analytics can now be centralised and integrated, helping businesses solve problems that impact employee, company, and even industry performance.

From predicting skills gaps and flight risk candidates to identifying top talent and providing the right intelligence to assist the development of new programs or models – and much more – people analytics has found a home in the heart of today’s organisations within HR. This information needs to be opened to the whole business so that all managers have access to the data they need to make more informed decisions for the business instead of keeping all this people data within HR.

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Duy Nguyen

About Duy Nguyen

Duy Nguyen is focused on providing trends and insights on Millennial behaviour and the digital innovation of HR. He is an HCM Consultant at SAP SuccessFactors based in Sydney, Australia. As a member of the Solution Architecture and Advisory team, he works with the broader sales & services team, and customers, to provide insights on HR best practices and help organizations simplify human resources processes, support talent development, and maximize employee engagement to transform strategies into measurable business outcomes.