We conducted this interview with Katherine at HR Tech Europe, which took place on October 24th and 25th 2013. The next HR Tech Europe will take place on October 24th and 25th 2014.
You mentioned earlier that a lot more graduates are coming through STEM programmes. With the ‘dataification’ of HR, will the HR department eventually be staffed by professional scientists?
I think organisations in general, for high innovation and high productivity, need to have high STEM levels of competence. HR specifically needs the mathematical part because we have to get better analytics. We also have to get more intelligent about the science of people management; for a lot of people in HR an introduction to statistics will be important, but historically it’s not been there.
When it comes to Big Data, perhaps we don’t really need scientists, we just need software. In the future you could have a piece of software/suite that can break everything down for to give you enough insight so you can compete with companies that do have scientists in the HR function?
That’s what one would hope, but I still think that in HR and other parts of the business that feed into strategy, someone needs to know if that data is actually right. Because if you put bad data in you’re going to get bad data out and we can’t have HR or any other department in big corporations acting on data where you can’t trust the results. So it’s important to know that someone knows the right questions were asked and that the answers to the questions were consistent and reliable, so that good decisions are being made.
It seems one of the biggest challenges when it comes to Big Data is asking the right questions. If you ask the wrong questions and roll the subsequent decision out across a 20,000 strong organisation, you’re going to be in trouble. With talent management, for example, what questions should people be asking to identify the talent they should be paying attention to?
That’s a really broad question. A lot of questions are being asked today, but most aren’t analytics question – they’re metric-based questions. Metric questions are those that can be counted on your fingers e.g. ‘how long did it take for you to hire Laura?’ That’s not analytics.
In a big corporation with analytics you’d be able to answer, for example, this question from your CEO: “With regard to our growth strategy, does it make more sense for us to build a factory in Romania because the cost of labour is cheaper, or more sense to build it in brazil because the natural resources are closer for whatever we’re building?”
With metric-based questions, the HR department may be able to provide information on slice of the overall pie e.g. “is it cheaper to hire labour in Romania or Brazil?” But they need much more data to interrogate in order to be able to answer the whole question and therefore win that ‘seat at the board’ that we’re all talking about.
Is that what you see as the future value in Big Data, answering those big strategic questions?
That would be a good start. Let’s take an example: imagine a country that wants to start a university, or build a factory in the middle of nowhere. What Big Data factors would you look at to determine whether you’re making a logical decision? You could look at, say, how many of the local population get a newspaper. Or what magazines they read. There’s all sorts of big fat ‘out there’ questions that are outside of the data of the company itself that can help answer these questions.
I think a lot of organisations think it’s the internal data that’s the big thing but from what you’re saying it sounds like it’s what’s on the outside, but a massive challenge is taking that and working out what to do with it.
Well, think about what we do when we do salary management. Many compensation programmes rely on external data. What does this job look like in the industry? What’s the average salary for a position? What’s the average salary like in the neighbourhood? What’s competition like for that sort of job?
So all of those things are totally external to the company. A lot of the really big data is out there, in fact if we look at the majority of data inside HR functions it’s more like middle-sized data rather than big data. To me, really big data has three traits: high volume, very varied in its type (i.e. dealing with unstructured information as well as data that resides in a database), and variable across time.
The best example I use when I try to explain what big data is isn’t something out of HR, it’s something like on Amazon - how to figure out if I bought War and Peace what the system should recommend next. There are lots of possible questions and data. Other people who read War and Peace also read Crime and Punishment, and this group of people who read War and Peace and also read Crime and Punishment posted a positive review of Crime and Punishment. You can always add one more layer of questions.
I was in Naomi Bloom’s session earlier. She says a common HR problem today is that people say ‘well, our most valuable asset is our employees’ and she says this isn’t true. It’s what’s in their head that’s valuable. How do you think that marries with the idea of Big Data and where we’re going. How can you quantify data that can’t be quantified e.g. social skills/soft skills?
Good question. If you’re asking me to quantifiable the unquantifable that might be a bit difficult. If we look at Naomi’s quote, and we’re thinking about what’s in peoples’ heads which is often your intellectual property, we come to the often-quoted idea that your intellectual property goes out the door at the end of every day, which is why retention is so important.
This leads to an emerging problem: in the next few years it’s going to become important to look at the amount of corporate knowledge amassed in boomer types who are likely to have been in organisations for some time. Then we have the rise of Millennials, and I don’t think there’s a technical gap between the two generations – we just haven’t figured out a sophisticated way to transfer knowledge. Corporations have rich histories and culture/processes, and long-time employees become very knowledgeable about how the processes work and don’t work. There needs to be somewhere that information that can be used for decision-making, and the rationale for that decision-making, can be codified. We’ve been very careless about that.
Are there organisations doing good things in that sphere i.e. realising baby boomer knowledge will disappear and taking steps to record this information?
Formal processes such as apprenticeships/mentorships are a good start – e.g. my job now is to teach you what I know. With mentorships people are trying to have a regular/repeatable way of making sure that things are important don’t leave the organisation. You always hear these funny stories about, “well we got all this equipment, we got all this stock, we got all new technology, and so we got rid of old Harriet down there and the company falls apart because she’s the only one who knew what the processes were.”
It’s not that there shouldn’t be change or new ways of doing things but you need to know what you’re changing and what the ramifications are.
Can you elaborate on the differences between baby boomers and Generation Y in the workplace? People often say boomers aren’t digitally-savvy, are more prepared to accept authority etc. Do you believe in all that?
I think people are people and actually there’s not a big change between people from one generation to the next. How people behave in general and what we respond to is more consistent than it is different. But there are some things about Generation Y that clearly are different. For example, take my niece – she has no idea what vinyl is. So there’s little oddities that might be part of one’s vocabulary, but does that matter at work? Not really.
I think it’s poppycock to say that boomers are afraid of technology, or that they can’t learn it. I don’t believe it for a second. And I don’t think the young people entering the workforce post-university, which a lot of people say are different this time round, are that different from how the baby boomers were. They’re bright-eyed, bushy-tailed, eager to please. But some things are different that we need to accommodate. Firstly, they’re really interested in their careers, interested in personal and developmental growth and much more interested in volunteerism. They’re more aware of being eco-friendly and all sorts of things that weren’t a concern – not because the people wouldn’t have been concerned – but just because it wasn’t part of the culture that would have been talked about. Now we’re all concerned with saving the world. It’s a cultural thing.
How is technology changing the way HR does its job?
About six years ago I did a study that looked at why HR people bought technology. The answer, across the board, 100%, was to make the HR department more efficient. We did the same study, same type of question, and nowadays it’s all to do with the employee rather than the HR department. So it’s to make employees more engaged and improve the experience for the end user, the employee.
Half way through these two data points was the introduction of self-service, which didn’t use to be a factor, and that’s caused the dichotomy of change in how HR looks at technology implementation.
Look at the kinds of technology that make a difference. We’re on the cusp of what I think will be the most exciting change in technology in this area. When HR was the runt of the litter, all the powerful technology we see here [at HR Tech Europe 2013] didn’t exist. From around 2000 people started looking at HR as an area where we could have lots of technology – this was focused on automating on computers what someone traditionally did on paper. It wasn’t the best way of looking at a process problem. And there have been consequences. A lot of our recruitment software today is very tedious because recruiters used to have a lot of yellow stickies and notes and they just copied the existing process when building the software.
Now these software packages are very old and based on processes that haven’t changed since the industrial revolution. And now, I mean look at LinkedIn – things have started to change at an incredible rate. We now have technology that’s tipping the established way of doing things upside down, we’re now analysing processes instead of just accepting them so we’ll see massive changes in how we hire people – thank God, it’s a gargantuan mess – how we measure performance, again, what we do makes no sense, doesn’t do well for employee and no-one likes it. So why do we do to it like that? Well, because we always did it like that.
Technology in HR is really just starting. There will be things that make a massive difference in a few years.
Recruitment’s an interesting one, I agree it’s a mess. Where do you think it’s going to go?
Applicants now go into a piece of software and apply online and it’s god-awful, tedious and laborious, and difficult, and there’s a whole bunch of other information you have to put into the application e.g. references. And this whole package sits there until it’s 100% complete (like Monopoly – Do Not Pass Go until you’ve completed the full application), and then maybe someone finally looks at your application. Only now any intelligent person is out there and has got four other job offers in the time.
So what I’m seeing is that the process itself is changing, and tools like LinkedIn are a great help for us. It’s turning to little bits at a time – recruiters and companies are realising they don’t need the whole package of application information until they’re going to make an offer. It all comes down to how we use information incrementally, so that it’s easier to apply for a job, but also easier to have points of screening out people before you’ve made them do this horrendous task.
One of the problems with the current approach is that the kind of people who sit through the application aren’t brightest and the best, aren’t the passive job seekers or people who might be lured by an incentive, they’re people who have nothing to do and can sit there for five hours and wade their way through it.
The new age ‘trickle in’ effect of looking at an application will soon be used much more extensively.
You mentioned talent measurement as the other thing we do wrong. How will that change?
I think it should be abolished altogether, in terms of performance review as we have it today. So at the end of the year the manager comes in and says ‘we need to do your review. So WHAT did you do this year?’ – this has to end. And your objectives a year ago lose relevance so quickly.
I think we get better performance out of people if we see it as an on-going process based on collaboration and teaming of people. People already know how others are doing and have the potential to always be responding. But all this is lost in the current approach.
I want to see something that’s more ongoing and less pressure-invoking and I’m sure it would take less time than the way we do it now. We need to see it as little bits over time. Now where it does make a change is that managers are going to have to assume that managing is actually part of their job and they’ll need better training to understand things like, “how do you coach an employee?” and “How do I make sure I’m telling you things that need improvement in a way that you don’t feel like you’re being slammed against a wall?”
What academic areas do you think HR professionals of the future will need grounding in? We’re seeing increasing interest in areas such as neuroscience.
That is I think the most interesting question I’ve ever been asked. If you took a liberal arts discipline without whatever the industry-specific programme HR people usually take on top, that would be a good start. HR people have to have a bit more of a quantitiatve background than they do at the moment. Psychology’s also a very good discipline to learn about people and how they behave, cognitive psychology is also important for how people learn. We spend a lot on learning and we have learning programmes that are developed by technology providers but how often do they look at the fact that people learn differently?
This is a bit of a tangent, but if you look at how an individual learns, we can tailor stuff to make them learn more efficiently. Think about how much time we’d save. One example is inductive v deductive learning – it’s not hard to package a learning course in two ways but we don’t do it. And it wouldn’t be hard to identify the deductive learners and the inductive learners – games would be a good way to do it.
Finally, what are the challenges of a global workforce/clash of cultures?
The increasing mixture of cultures and diverse populations has nothing to do with ‘global.’ I asked my cab driver here how many people were in Amsterdam and he said 800,000 with 170 different ethnic cultures. You don’t need to be global to really have the diversity you should have.
But a real global workforce... well, we need to back up first and look at what structures in HR are the best way of managing the HR process globally, so we can do things like really know where talent is and when it’s expeditious to move talent around.
Beyond that a lot of companies are using ‘glocalisation’ strategies, so there are global policies for the central organisation and local policies for the running of people management in the individual countries.
We’re doing some studies in China looking at skills gaps in higher echelons of management. There are 400,000 multinationals in China and most – not all – senior leaders are expats. That’s a very expensive way of doing things, and also you never send your best people to be expats because they are running things at corporate headquarters, so you send someone who has some promise and who’ll be there for five years. That translates to a year to learn it, second year they get their feet on the ground, third year they’re freaking out and want to go home, but they stick it out for two more years.
When we look at the Chinese companies, they said they wanted indigenous Chinese as managers but there’s a skills gap. It’s not that they’re not smart enough, or educated enough, it’s a cultural difference between how the folks at the Western headquarters perceive what they need and what the Chinese managers do. So what kind of curriculum would fill that gap? (And it’s different in different countries). This then begs the question: why do we have one-size-fits-all leadership training?