Episode 76: How Data is Changing Human Resources

Data’s Role In The Future of Human Resources

Every business problem is a people problem. Eventually, it comes down to people. So, if you've got good data on your people, you're going to be a better more responsive organisation.
 

Josh Bersin, global industry analyst and CEO of Josh Bersin Company, joins Nick White on the podcast where he discusses the impact data is having on the Human Resources industry. Josh also shares his insights on the impact of COVID-19 is having on employee experience from recruiting and onboarding to retention and the day to day work life. 

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The Power of Data Podcast

Episode 76: How Data is Changing Human Resources

Guest: Josh Bersin, global industry analyst and CEO, The Josh Bersin Company
Interviewer: Nick White, Head of D&B Accelerate, Dun & Bradstreet

Nick White 00:00
Hello, and welcome to the power data podcast. I'm Nick white, head of D&B Accelerate here in London. And today I'm delighted to be joined by Josh Bersin, global industry analyst and CEO of the Josh Bersin Company. Hey Josh, how are you doing today?

Josh Bersin 00:12
Hey, Nick, great, nice to talk to you.

Nick White 00:15
And you. You're a leader in human resources insights, seasoned public speaker, an advisor on topics of human resources, talent management, recruiting, leadership and technology. For the benefit of our audience. Can you give us a little bit of background in your career and a bit about the Josh Bersin Company?

Josh Bersin 00:32
Sure, you know, I was a regular old businessperson for about 15- or 20-years doing sales and marketing and product stuff and tech companies and got involved in the online learning industry in the early 2000s. And during the 2000, recession, was actually laid off and found out that actually, there was a lot of need for research on corporate training at the time. And that's how I became an industry analyst. So, for about 25 years, I've been studying and doing research on all aspects of HR training, talent management, HR technology, employee experience. And because I have an engineering background and a data background, I used to actually work for a database company for about nine years. Data is a big part of this. So, I'm looking forward to talking to you about it. And we do professional development and advisory services and consulting for HR departments. So, we're kind of the trusted adviser to HR all over the world.

Nick White 01:25
Great, Josh, and the types of organizations you'd work with very varied global in nature.

Josh Bersin 01:30
Yeah, mostly bigger global companies. But we also have an academy that's very inexpensive for small and medium sized companies to just go in and learn about all the things going on in human capital and HR. But mostly, the larger companies are the ones we work with directly.

Nick White 01:43
Great. sounds really interesting, Josh, so and obviously, the pandemic has had a huge impact on how organizations manage and work with their employees. So, my next question is really in that vein. So, in 2020, your company did some incredible things in the survey that analyzed pandemic response by companies, and the correlated business impact. I also understand your big reset initiative conducts ongoing executive working groups to help companies adapt to new workforce challenges. Can you tell us a little bit more about how using data and any anecdotal information to help guide the overall HR community?

Josh Bersin 02:18
Absolutely. Well, you know, the first thing that I would remind people is data without context is sometimes misleading, or not even easy to understand. So, what we tend to do is we do a lot of surveys and look at the economy and the job market and many other sources of actual numbers. And then we talk to companies all the time to understand their personal perspectives and stories. And what we discovered from the pandemic was, of course, everybody was sending their employees home and more or less freaked out about what was going to happen. But if you actually looked at the data, the real issue was business transformation. It was initially a problem of health and wellbeing and safety and hygiene. But then what it became was very quickly, how do we operate, serve customers, change our products and services, and move and realign our workforce during this crisis, unpredictable pandemic. And so a lot of the best practices that came out of that we're not just health and safety, but a focus on the company's mission, allowing people to redeploy and work in cross functional teams on new projects quickly, supporting people as they develop themselves for a role that might have changed during the pandemic. And then, of course, quickly developing new digital products and services since most companies realized they needed some digital offering to accommodate the issues of the pandemic. So, we can walk into that. But that was a combination of a big quantitative study, and then weekly conversations with 400 or so HR leaders that we do through the big reset. And it's actually been very educational about, you know, what's going to happen next. So, we can talk about what's coming next, too.

Nick White 03:59
Yeah, absolutely. Josh, nice lead on. What were the big insights that you've drawn from that analysis?

Josh Bersin 04:04
Well, you know, if I go through, there were 10 best practices that came out of that study, the first three were really about health and well-being. And what really happened over the last 18 months is everybody in business, CEO, managers, supervisors, HR people realize that health and well-being was not a benefit. It was a management practice. And if we couldn't take care of people and listen to people and respond to people's needs, we couldn't run our companies at all. So, I like to say that the well-being idea crawled out of the benefits department and landed in the boardroom, really, and resulted in a lot of new investments in technology and solutions and services, but also a lot of improvements in productivity. There's a study that just came out today from the Conference Board that says that roughly a third of the companies that were surveyed said that their employees are significantly more productive now coming out of the pandemic because of all the adjustments that were made, that initially felt like well-being adjustments, so that's the big first thing. The second thing that came out was how important it is to focus on culture, when the company is under stress when the workforce is under stress, when people are worried about their families, their personal lives, their neighborhoods, their homes, work can be a refuge, work can be a place to feel good about things, if you're supported. And if you know, like the company, and you like what the company is doing, and you feel that the company's fulfilling a mission. So, companies really did spend a lot of time over the last year to reinforcing why they're here and who they serve and what their bigger social purpose is, as a way to reinvent themselves, but also to energize people. And then the third set of practices that you know, have been around for a long time, but really got accelerated was business transformation, workforce transformation, rescaling upskilling, talent, mobility, you know, giving people the information, they need to realign themselves in a job that changed overnight. And that's not actually a new capability. But it's something that really was proven during the pandemic. And for those of us that have been kind of preaching that for a long time, we got a lot of audience for that. So, we really learned a lot over the last year and a half.

Nick White 06:19
Incredible, I wondered how, you made an interesting point there about productivity being up a third, since people have migrated to the home office. How is productivity measured? This is something that I'm always fascinated by, what's the yardstick of productivity?

Josh Bersin 06:33
Well, I mean, there's a million technical definitions, but generally it's revenue or profit per cost or hour worked of employee cost. But you know, most companies know when productivity goes up, because their revenue and profitability goes up faster than they're hiring. And so, they can usually figure out, if you're a salesperson, it's revenue for employee, if you're a customer service person, it's number of calls per hour per month, there's all sorts of metrics like that. So, these are real numbers. This isn't just, you know, anecdotal. And part of the reason productivity is going up as people are working more hours, you know, if you live in the San Francisco Bay Area, or you live in London, most people are commuting 30, 40, 50 minutes a day each way to and from work, that's unproductive time, there's the time of going into the office, sitting at your desk, getting established going to the meeting, all of that kind of got streamlined, when people were working for home. So, for the white-collar workers, or the people that were working remotely, they all worked more hours. I mean, the number of hours worked during the pandemic has gone up for most people. And that, you know, isn't really productivity. But a company doesn't pay you more. When you work more hours, you get the same salary as you did before the pandemic. So all of a sudden your productivity went up. So, part of it was removing a lot of friction that we had in the workplace from the more traditional work model.

Nick White 07:54
Got it, I must admit living in London myself, I'd die for a 30-minute commute, Josh.

Josh Bersin 08:00
Same thing is true here. People commute an hour, hour and a half each way all the time.

Nick White 08:04
No doubt you've expanded on that. This year, you're focusing on a survey that analyzes employee experience from recruiting and onboarding to retention and the day to day work life? How is this data to help businesses decide what really matters?

Josh Bersin 08:18
Well, this is a huge topic, employee experience is a phrase that's become very popular now in HR. And generally, in business, let me give you a little context, you know, we're coming out of the pandemic pretty quickly in most parts of the world. So, there's a lot of jobs, there's a lot of supply chain issues, and there's a supply chain of humans, that is very, very constrained. We don't have enough people to fill the jobs that have now reopened. And so, companies are realizing, wow, it might take three months to find somebody to take this job, maybe we should try to find somebody internally to take this job, oh, our retention rate isn't very high. Maybe we better fix the reason people are leaving, because it's more expensive to replace them than it is to get them to stay. So, retention or employee experience is a huge topic. And the word employee experience also refers to well-being and productivity and teamwork and belonging. And so, what we've learned in our research and other people have been doing research on this is a couple of things. First, if you look at all of the things you do at work, everything from the job, your manager, the workplace, the diversity and inclusion, experience you have, the pay, your opportunity to grow, your opportunity to learn, your sense of purpose, the leadership, communications, all of those things affect the employee experience and the technology environment. You know, if it's hard to work, if your computer's broken, if you can't find your emails, if you're getting too many messages, that's also part of employee experience. The second thing is that of all of those things, you know, it's not clear which ones are the most important. We did a lot of work on this. This research is going to be launched next month. The number one driver of employee experience is not really the artifacts of work. It's really the culture of work. Do I feel like I belong? And does the company care about me? Believe it or not, those are much more highly correlated to an employee's success and ability to perform and willingness to stay, then I got a new computer, I got a raise, or I got a bonus, or whatever it may be, those things are important, but but much less so. The third thing we found about employee experience is it is a very cross functional problem. You know, the idea came from the employee engagement market, which was a market of HR people doing surveys, and most companies for many years have done those surveys. Well, employee experience is a lot more than that. It's actually a design problem of designing what we now call a hybrid work experience that works for people. So, it's a very creative area, you know, in in HR, and IT right now of figuring out how to create a great employee experience because frontline workers, manufacturing workers, truck drivers, logistics people, salespeople all have different needs. So, it isn't like one size fits all. But it's a really important initiative. And I think we can thank the pandemic for forcing everybody to really talk about this and work on it. So, from my standpoint, it's been very positive.

Nick White 11:21
Agreed, I think it's just accelerated the whole process. At Dun and Bradstreet, we're champions of how businesses use data to make informed decisions and gain a competitive edge. In a context of culture, how can data be used to help an organization measure what a lot of organizations think can't be measured?

Josh Bersin 11:41
Well, it's a really good question. And I think data plays a pretty big role. And this is a huge emerging area, you know, so culture has many definitions, and everybody has their own model. Many companies have value statements and mission statements, various things that try to reflect their culture. But the reality of culture is culture is measured by the things that happen, the things that are rewarded, the behavior of leaders and managers, oftentimes under stress, and the sense of belonging, and psychological safety, and support that people have at work. So, what data do we have to measure all that we have a lot of data. We have employee engagement data and survey data, which is now used by companies monthly, quarterly, and some companies even do a daily. We have all sorts of data on your actual experience in the office, if you're an office worker, every email, every meeting, every interactivity you have somebody, somewhere has the data set on how much time you're spending doing what, for example, Microsoft out of the box now has tools that will say you're spending 23% more time in meetings than your peers, maybe you should have fewer meetings. There are now tools using AI that can look at the natural language in communications to determine if people are under stress. There's actually a lot of HR technology that can identify patterns of potential fraud, or stress or harassment from not necessarily reading the emails but understanding the temperament of the emails and the communications. And then of course, there's all sorts of data on retention and actual mobility of people. And when people leave a company, they usually leave a trail of information as to why they left. There's exit interviews, there's conversations, there's performance reviews, there's check ins that happen with managers, there's various forms of public meetings with the CEO or people speak up there speak up groups, there's crowdsourcing, where a lot of companies have systems where employees give you suggestions. So, this is data all over the place. There's data being captured by companies, that's very important in many, many places. And so the the real issue in HR is finding it and using it and analyzing and I'll give you, you know, a very specific example, there is a electric utility a year or two ago that had a very catastrophic explosion and fire. People were killed, it was a huge insurance lawsuit and cost the company a lot of money. Well, they went back in time, and looked at email communications and survey data from a lot of their line workers and service and repair employees who were complaining that this particular part of the network was not getting the maintenance that it needed. And they, you know, felt that there could potentially be a risk. Well, you know, that data wasn't being used. Maybe it wasn't even being analyzed. I don't I don't know what happened. But as a result, you know, that company experienced a pretty big problem. And this kind of thing is happening all the time employees are the ones who talk about what's not working.

Nick White 14:45
They're closest to the problems and the opportunities.

Josh Bersin 14:47
Exactly. And you know, what I like to say about employees is employees are the most vested stakeholders you have. Customers when they're unhappy, they don't always tell you. They just leave they just don't buy your product and they don't tell you why. Employees will tell you. So, listening to employees, finding many ways to hear what they're saying. We have a whole program in our academy called The Voice of the Employee that's designed to show HR people how to do this well, it’s an enormous source of information. And it differentiates companies that responded well on the pandemic. Those companies did listen to their employees, and they are listening now. And they're learning a lot about how to make their companies better.

Nick White 15:25
So, it's fair to say, Josh, that the use of data and analytics in the context of HR is critically important.

Josh Bersin 15:32
It is and you know, and there's a history to this, you know, it's a little bit of a funny history, you know, when I got involved as an analyst, 25 years ago, there was usually like one statistician or, you know, maybe PhD person saying, “Hey, you know, I'm doing all this analysis, and nobody's paying attention to such and such.” And it was kind of an academic people analytics person, it was eventually called, well, that's gone mainstream now. You know, every business decision that a company makes, really should be informed by people related data. Do we have enough people with the right skills? Do we have enough people ready to move into that role? What's the turnover rate in that part of the company? Do we have managers that are not you know, managing the business well? And if so, who are they? And how do we tell who the great managers are versus the ones that are less successful? And what do we know about them that we can use to make the less successful managers more successful? I mean, these are all people data questions. In fact, what I oftentimes say to HR people, is every business problem is a people problem. Eventually, it comes down to people. And so, if you've got good data on your people, you're going to be just a better more responsive organization.

Nick White 16:43
Great. And for our listeners, Josh, leaning on your expertise and experience, can you give us three pieces of advice where companies can focus their efforts based on your analytics.

Josh Bersin 16:53
The first is to clean up the data, so it's reliable. You know, the reason a lot of data projects don't fulfill their potential is the business buyers, or the business users don't trust the information. They see something and they're like, Ah, yeah, okay, well, that's just, you know, wrong, or I don't believe that, or that doesn't make any sense so I'm not going to really pay attention to it. So, we have to make sure that the data we have is credible. The second is something we talked a lot about in our academy courses, is storytelling. Most businesspeople don't want to know the statistics of why something's happening. They want to know what to do about it. So, we have to be very good at using the data to tell a story that makes sense and means something to a businessperson who may not really care that much about HR data at all. And explain to them why we've discovered something that needs action. And the third is to invest in the really cross functional nature of data. Data about HR, data about retention, data about skills, you know, it's interesting, but we really want to know, how does that impact revenue? How does that impact customer service? How does that impact customer retention? How does that impact growth? So, we have to take the data we're sitting on an HR, which is very complex, and we have to put it into the bigger data systems in the company and relate it to these other things. If you go to a head of sales, or a head of operations, or head of customer service, and you say, Hey, you know, I have realized that if we do so and so in the HR area, we'll get upwards of 20 or 30% improvement in revenue or customer service, you're immediately going to get their attention. But you need to do that correlation, so that you have that level of credibility. So those are the things I would say are really critical.

Nick White 18:40
I completely agree with you, Josh, from my experience in this industry, there was a lot of research and direct data that kind of correlated the experience of your customer and your experience of your employee and how those two things when maximized, absolutely lead to bigger results will evolve. Thinking about the future of HR technology, what is the most exciting developments you see coming to the profession over the next couple of years, Josh?

Josh Bersin 19:03
Well, there's a lot, but let me just mention two things quickly. The first is AI. You know, AI was a very exciting novel, unexplored thing a couple of years ago, it's everywhere now. So, every HR technology you buy is intelligent, it's making recommendations, it's giving you information about people that you couldn't have gotten on your own. And that means, you know, what should I be learning? Is there a new opportunity for me inside the company that I should be looking at? Are there ways I can be more productive on a day to day basis? Are there things in this project that we could be doing better? We have all this AI, we can talk to our HR technology now. So that's the number one. The number two really interesting thing to me about the future of HR tech is creator tools. Most of the HR technology in the past was a record keeping system or a transaction system and you would use it to do some business process that you had to do in HR? Well, most of the problems companies have now, you know, there is no off the shelf solution, you know, like a hybrid workforce, which every company is trying to figure out how to put together a hybrid works policy, you can't buy a tool to do that. You have to build it. And so, the tools that people are looking for an HR now are tools that create journeys and workflows, and experiences. And so, we're really moving into a world where HR managers are much more like designers than implementers of technology. So those are the two big to me very interesting trends in HR tech.

Nick White 20:35
Technology that becomes modular in nature that you can bolt things on to Josh, you know, depending on the size, scale, and challenges your organization is facing today.

Josh Bersin 20:44
Exactly. I mean, you know, these systems are designed with microservices, they're much more modular, you don't have to sort of buy this gigantic thing and turn it all on, you can use pieces of it at a time. So yeah, it's much more approachable for HR people than ever before.

Nick White 20:58
Great. This leads me nicely on to kind of my final question, but the most important, I guess, for you, Josh, what's next for the Josh Bersin company?

Josh Bersin 21:06
A lot of things, we're very focused on the skills and capabilities of HR people. We realized that it turns out one of the most highly correlated factors in employee retention and performance is the skills of HR. We have data to show that it is maybe one of the biggest issues companies have. And so, we're spending a lot of time on our academy and putting together all sorts of interesting programs on how to assess your capabilities and improve them as an HR team and as an HR function. The second thing is, you know, we do a lot of ongoing conversations with the vendor market. So very excited about the Fall, because the Fall is the season of HR technology, introductions and all sorts of new tools. And so I'm working on the next generation of research on that. We're doing a massive study of talent acquisition right now, that will unlock some of the secrets to recruiting in a very, very tight labor market, because I think we're going into maybe the most competitive labor market we've seen in a long, long time. And then generally just bringing HR leaders together. We do a lot of advisory consulting, and a lot of essentially collaborative meetings of HR people learning from each other. So those are the things that we're focused on here.

Nick White 22:17
Great, Josh. Well I'm hopeful that once you've conducted that next round of research, you'll come back, and you'll do another podcast with us. It's been fascinating to hear a bit more about the employee experience market and everything that The Josh Bersin Company does in this space. It ties very nicely to some of the things that D&B does very much around helping companies understand data, and how data can help to make informed decisions. So, I really appreciate your time today. Thank you, Josh.

Josh Bersin 22:41
Thank you, Nick.

Nick White 22:42
And thank you for listening to The Power of Data Podcast.