- The organizational framework is changing
- Both the system landscape and reporting need to change
- The workforce scorecard: a must for organizations
In a previous article I made the bridge between reporting about Covid19 figures and business reporting. In this article I continue on a hot topic in current management reporting: workforce reporting. The topic is not new, but is gaining in importance in the current economic environment.
Everyone is aware of the "war for talent". This challenge will not disappear in the coming years, even if unemployment is high due to temporary crises. You should link this 'war for talent' with the needs of the young generations and the change in labor market models. The younger generations look differently at the relationship with an employer and the urge for job security has been replaced by an urge to keep learning in a meaningful way. This is a motivation that, by the way, should apply to everyone and should therefore be monitored by an employer. In addition, there is a continuous shift in the labor market towards more project and freelance work, whether or not linked to a different social status.
Let's zoom in further on the reporting of HR data.
Insights into the system landscape
In order to answer these questions in the above environment, there is a need for a lot of analytical data. And that is exactly the challenge. The basic systems in organizations are usually statutory and legally organized. On the one hand the financial or ERP system, but also the HR system that primarily serves to be able to do the payroll processing.
Most ERP systems have a hard time dealing flexibly with an ever-changing organization and therefore cannot keep up with the multitude of internal projects and initiatives. The HR systems made available by payroll administrations are aimed at legal entities and not at cost centers or projects.
Usually, a time registration system is also in use so insight can be obtained into the time spent. This system may or may not be integrated into the ERP system.
In most companies there are therefore at least 2 systems active to provide basic HR reporting. And these are usually managed in 2 separate silos: finance and HR, and sometimes IT. Since it concerns confidential data, the necessary governance must be set up and the databases cannot simply be opened and a Chinese wall will arise. So a reporting layer needs to consolidate the data in some aggregated way so that GDPR guidelines are also respected.
HRIS refers to Human Resources Information Systems. Although there is already a general name, there is not much behind it. Flexible reporting systems that link these underlying databases with respect for privacy are the future if they are set up by experts who also understand the underlying business needs and do not generate pure reports. Access rights must also be properly set up, because Human Development must be managed by the responsible managers in their role of people manager. It makes no sense to make these reports available to HR only.
The organizational framework is changing
The increasing complexity (both internal and external) of business environments is affecting the way an organization should deal with "its people". There is a need for more expertise at set times. This expertise will be put on projects rather than in an operational role.
In addition, experts increasingly protect themselves against the risk of getting into boring operational roles by either entering project work or a freelance status where they can choose their projects themselves.
The increasing complexity is also translated into the way companies are organized. With one exception, the hierarchical command & control models are already dead. Contemporary organizations work in projects with people who play a specific role in this. Other hype terms such as squads, agile sprints, self steering teams, etc. cross the traditional organization.
Today there is a huge shift on top of that because more people work from home. This evolution has now received a huge boost due to the corona crisis, but will certainly continue.
And how do you keep "control"? Who still knows who is doing what? And is this still efficient and optimal in terms of costs? These are the classic questions that a controller asks himself, but it is now difficult to answer.
Reporting about human development is key to bind employees
Which reporting is required
So yes, even though many companies say that "human resources" are their most critical asset, many fail to report smoothly on HR data. And I mean just the simple questions such as' how many people are currently active ',' how many are on payroll and how many are freelance ',' what is the difference between headcount and FTEs', 'on which cost center are these persons active ', …
It becomes more interesting if we add questions about real Human Development. And in the introduction we reported that this is exactly what more attention should be paid to, to be able to bind professionals to the organization.
"What is the main focus of the time commitment: are these external projects or internal" "what % of their time is spent on internal administration," "what % is productive", what about their skill set? Have they received sufficient training and what is planned in training hours? Are the required competencies present in the strategic projects? Can we monitor the budgets of the projects on the basis of an internal cost per person? ...
The workforce scorecard: a must for organizations
The concept of the Balanced Scorecard was introduced in the early 1990s. The theoretical concept consisted of 4 quadrants in which the above soft skills were captured in the quadrant "learning & growth". So there was not yet a specific quadrant for human development! More was written about this later and the concept of 'the workforce scorecard' was launched. Today, most organizations do some form of performance measurement and reporting based on these scorecarding principles.
However, we still find huge flaws in the basic reporting of "hard HR". We are almost nowhere in the field of "soft HR" or Human Development. It is time to tackle this now because the circumstances outlined oblige organizations to do so. Otherwise they will not be able to bind the good employees to them for long enough.
Serge Vigoureux is Blue Chip Boutique Leader of Management Information & Systems, a specific unit of TriFinance that focuses, among other things, on reporting and visualization.