December 2020 | 

Meeting the HR Challenge: Data for an Uncertain Future

Meeting the HR Challenge: Data for an Uncertain Future

“There has always been a tension in managing people between how much to trust instinct and how much to trust data,” says Wharton management professor Matthew Bidwell. That tension has persisted even as HR data and analytics applications — and evidence of their utility — grew. It looked like the decades-long inclination for basing HR decisions on individual experience and intuition might never be displaced. Until now.

It’s time to move past the divide, argues Bidwell. “We are experiencing something entirely new. When you’re in an environment that you have never seen before, your experience is just not useful. The old rules of thumb don’t work. In a world where we can no longer see people face to face, we are required to be more systematic about interpreting signals and analyzing them. Data’s importance has never been stronger.”

One piece of good news is that data collection has gotten simpler — virtually connected remote workforces provide more information that’s more easily gathered. But it’s up to HR professionals to make sense of it in real time, base decisions on the insights gleaned from it, and act fast. Bidwell, co-academic director of People Analytics: HR Transformation through Data, illustrates the need by citing engagement and attrition — topics covered in depth in the program. As organizations continue to operate on razor-thin margins, HR professionals who can address and plan for the uncertainty surrounding staffing, both today and into an unpredictable future, can add tremendous value. “One way to be improve your planning process,” says Bidwell, “is to figure out who in the current workforce is engaged and who seems poised to leave.”

In a People Analytics session on social networks, Wharton professor Zeke Hernandez shows how to understand engagement through communication patterns, determining who is central and plugged in, and who is peripheral. “It’s harder to be out of the loop in the office,” says Bidwell. “But that’s changed with so many working from home. HR is challenged to capture and analyze the data about who is no longer central to the information flow. We know more about who is talking to whom in the business world than ever. When we analyze that data, we can have a much better idea about who is engaged and who may be poised to leave.”

Anticipating the need to fill a position becomes even more important as remote work continues. As Bidwell explains, “It’s much easier to move jobs. Your commute won’t change, and you may not know or have relationships with your colleagues. As the economy starts to pick up, we may see a lot more turnover as people start to make those moves, particularly in in-demand roles. Understanding burnout and engagement, then, is critical. The program helps you to use the data you have to make sense of where you are and what might be ahead.”

People Analytics is now offered online over five non-consecutive days. Led by the same faculty who teach in the on-campus version, it is delivered in a best-of-class virtual format that maximizes interaction between professors and participants, including in networking and Q&A sessions. The program schedule is also designed to provide the opportunity to begin applying lessons learned in the workplace and to engage in discussions about the real-world challenges participants are facing.

Those challenges go beyond current workforce engagement and attrition to preparing for future hiring. Bidwell teaches program participants to use scenario planning and real-world options to create robust yet adaptable strategies. “Picture and plan for three possible scenarios for 2021. The first looks a lot like 2020: We’re locked down, most work is done remotely, and there is not a lot of face-to-face interaction. Although unlikely, it is a possibility. The second looks like 2019, a return to the old normal. Between the two is a scenario that is a blend of the two. For any plan as to how you will staff next year, you want to think: How would this plan perform under each scenario?”

Bidwell stresses the importance of scenario planning in light of short-term inflexibility. “Part of the challenge in planning resources is we can’t decide tomorrow we need 20 percent more people and then have them in their roles right away. It could take three to six months to get those people in place. That’s a terrible challenge when you’ve got this much uncertainty around how many people you are going to need. Scenarios help you with this in terms in understanding what to do and what risks a plan faces in each potential future.”

Once you have the three scenarios in place, the next step is determining how to manage potential downsides, spending wisely now to be better positioned later. In terms of hiring, the real-options strategy is useful because you don’t know now how many people you will need once demand picks up. “You’re not ready to start hiring,” says Bidwell, “but you might spend a little money to begin the recruiting process. That might mean building a list of potential candidates, reaching out to people and ‘warming them up.’ Then, if the need to hire arises in a couple of months, you have saved some time, and you have more flexibility. Today’s small investment makes it easier to respond later when demand is high. We don’t know what 2021 will look like, but there are strategies you can use now to help you meet increased demand later.”

As we look to 2021, with record levels of uncertainty showing no signs of decreasing, we can find some answers in the data being collected in the present. “Eventually we will return to something like a normal work environment,” says Bidwell. “The move into that future can be better managed with analytics. We don’t know whether the present situation is a blip or if there are long-term trends that have emerged, but understanding how to think about using data from this period is an important starting point.”