In his Why It’s Time For A New Era In Human Resources. Enter Systemic HR article, industry analyst and thought leader Josh Bersin describes HR professionals of yesteryear as “a back-office administrative function…clerks, administrators, recruiters, or training managers.”
Today, it’s a different story, with HR teams grappling with a myriad of 21st century challenges.
You’re still responsible for sourcing qualified candidates and delivering training programs. But there’s a whole lot more to HR these days, from creating a truly inclusive workplace to ensuring adherence to evolving regulatory requirements.
It’s like this. The paradigm shifts in the workplace over time now need to be matched by equally transformational HR practices, which Bersin dubs “Systemic HR”, bringing HR out of the back office and re-framing it as the engine room of the organization. After all, when you understand your workforce and its impact on your business, there are no challenges you can’t overcome.
But, how do you get this deeper level of insight to simultaneously elevate your HR functions and drive the business forward?
This new era of HR calls for more innovative tools of the trade than the non-integrated legacy systems (and even manual spreadsheets) you’re already squeezing the living daylights out of.
This article explores not only a systemic approach to HR, but also how a future fit people analytics system is key for enabling change.
Understanding Systemic HR
- A systemic problem or change is a basic one, experienced by the whole of an organization or a country and not just particular parts of it. Cambridge Dictionary
While the face of HR gradually changed for over half a decade, the pandemic sealed its metamorphosis, cementing elements such as:
- Remote work
- Hybrid models
- Mental health initiatives
- Gig workers, contractors, and part-time contributors scattered across the globe
Along with these shifts came a profound understanding the workforce is more diverse and dynamic than ever before.
All these changes heralded a new era of HR challenges, forcing you to re-evaluate key fundamentals such as:
- Localized pay practices and pay equity
- Organizational designs
- Workforce strategies encompassing various employment types and geographical locations, including hybrid work policies, a global recruitment strategy, and wellbeing programs
More profoundly, management of a modern-day workforce spans diverse gender identities, races, nationalities, and generations. In response, organizations are committing to DEI programming as part of a wider realization performance is intrinsically linked to psychological safety, inclusion, and open-minded thinking.
And to top it all, there’s what Bersin describes as the “Secular Labor Shortage”.
“What does “secular” mean?” he asked in his Why We Are Entering A Secular Labor Shortage article. “Well Webster’s Dictionary defines it as “of or relating to a long term of indefinite duration.” And that’s the labor market trend we see”.
It points to ongoing concerns that don’t look set to ease any time soon around skills shortages, retention, and L&D.
As a result, HR professionals are understandably becoming overwhelmed by the need to:
- Navigate skills taxonomies (e.g., the way you classify and quantify the skills already in your business to inform what you don’t have but need)
- Leverage more innovative tools for candidate tracking and management, without making the recruitment process time-consuming and tedious
- Adapt beyond the under-performing legacy systems and vanity metrics that have achieved too little for too long
Bersin explained: “…our entire function, the HR team or HR organization, has morphed from a focus on compliance and service-delivery to one of productized solutions, intelligent data and insights, and a need to be consultants and advisors, not just generalists and support agents.”
So then, culture shifts of this magnitude call for the brightest and best systems to keep pace.
The Limitations of Legacy HR Systems
Remember the cell phones you once thought were the cutting edge of modern technology, but now seem pre-historic? It’s the same with legacy HR systems.
The thing is, the HCM and HRIS that has been the backbone of your operations might just be showing its age in the face of the complex modern workforce.
Here’s why legacy HR systems have struggled to keep up:
- Lack of integration – Having systems that can’t interrelate is a real headache. It’s the sheer frustration of knowing you’ve got exponential amounts of data in your systems – and also on manual spreadsheets – but getting it out, combining it, and analyzing the results to guide the way is too often a pipedream.
- Designed for outdated workforce model – Legacy HR systems were designed for a linear and homogenous workforce. It’s no wonder they can’t handle the diverse, dispersed, and dynamic employee base you’re now managing, coupled with issues such as pay equity and a globalized recruitment strategy.
In short, legacy HR systems are proving inadequate for meeting current (and future) demands. This is because the vanity metrics they generate are largely static, lacking in real-time data analytics, and aren’t up to par for handling the nuances of a today’s workplaces.
As call for a systemic approach to HR practices becomes increasingly urgent, so too does recognition your legacy systems aren’t for purpose to deliver its promises. So, where does this leave you in terms of addressing core needs, such as:
- Anticipating, planning, and executing impactful recruitment campaigns that can bend and flex to the changing market conditions.
- Engaging and developing your employees to exceed their potential and positively contribute to achieving overall business goals.
- Evaluating the effectiveness of your employees and ensure they’re paid fairly.
You see, to make progress in these areas you need to be able to answer questions like:
- What do we know about our evolving people information, risks, and opportunities?
- How can we find out?
- How do we apply our findings in a flexible and targeted way to respond to different internal and external factors unfold?
Enter people analytics.
The Role of People Analytics in Systemic HR
People analytics combine and process all the data locked in different systems – and even different formats – to dramatic effect.
Consequently, you’re equipped to access to a wealth of information, from employee performance metrics to engagement levels and skills inventories. And when you know what you’re dealing with, you’re empowered to make better informed decisions.
Gone are the days when you can measure, for example, for how many successful new hires came from different recruitment sources, but not how long they stayed, how many went on to gain promotion, and any notable anomalies by location or line manager.
Now, systemic HR, supported by people analytics, are a dynamic duo for optimizing your workforce, promoting inclusivity, and driving innovation, thanks to a newfound ability to identify and start to tackle challenges such as the following examples:
- Unusually high attrition rates in a particular role, department, team, or branch
- Disappointing retention rates of great candidates who were perfect matches on paper, but are leaving en masse within two years
- Layoffs due to economic downturn
- Poor retention of good existing staff who are leaving in notably high numbers during early stages of parenting
This is why people analytics and data-driven insights are the linchpin for systemic HR, readying you to transcend traditional HR models and drive systemic change.
“The companies that learn to adapt and evolve into this model are outperforming their peers,” Bersin concluded. “They are four-times more likely to be best-places to work, three-times more likely to be category leaders in their industry, and four-times more likely to be revenue growth and profit leaders in their market.”
Our leading-edge PeopleInsight by HireRoad system is designed to navigate the complexities of the modern workforce and position your organization for sustained success. You’ll want to take a closer look when embracing systemic HR as a strategic imperative for realizing the full potential of your people and your business.
Inspired by systemic HR, but concerned about implementing it for maximum impact? Book a free demo and see how you can thrive by leveraging people analytics and innovative insights.