Topics: Risk Management,Strategy,Technology
Topics: Risk Management,Strategy,Technology
May 16, 2019
May 16, 2019
As C-suites increasingly desire actionable insights to help run their business, and boards seek the right metrics to understand management’s progress, workforce analytics is becoming a key focus area. Last month, I wrote about the potential in this area—a timely topic as more companies begin to mine employee data as they do consumer data. From mapping which teams consistently deliver peak innovation, to removing barriers so employees’ workdays are more productive, workforce data insights are growing in number and impact.
Many board members and executives that I speak with are surprised when they learn that these data driven insights can add to or detract from business performance by as much as six percent. For example, Credit Suisse used algorithms to identify high-performing employees who were a high retention risk. The company then trained special managers to focus on and retain these employees, saving roughly $70 million per year.
In another example, shoe retailer Clark’s use of workforce analytics showed leaders that every one percentage point improvement in employee engagement led to an improvement of 0.4 percentage points in business performance. By analyzing the characteristics of its 100 best-performing stores, the company created a blueprint for high-performing stores, along with an engagement toolkit for managers to use with teams.
While these are examples of point solutions, imagine an enterprise embedded with an interconnected web of solutions, created and fueled by workforce data insights. These insights could accelerate a company’s transformation, unlocking value hidden within its own workforce data. One way to think about it is that each company and workforce has its own unique organization DNA that can be understood and analyzed to unlock hidden value and capabilities. Boards can help C-Suite leaders more quickly transform their business by insisting that the company’s management team engage in responsible workforce data collection and mining practices, as part of a framework of thoughtful governance. And we’re seeing that leading companies engage employees as partners in that process.
Given that this is a greenfield for some organizations, I’ll share some thoughts on how to ensure organizational DNA is handled responsibly. While these ideas are not a prescription—after all, each company’s needs will be unique—they are suggestions for some best practices I’ve seen work well. At the heart of the issue: Boards must find a way to provide oversight, ensuring the company is generating the insights it needs to enhance business performance and drive growth. The board must also hold itself responsible for ensuring that employee data is protected and privacy is respected.
Consider forming an artificial intelligence (AI) or data oversight committee. Risk professionals must be involved due to privacy and security issues, but these issues need to be weighed against the opportunity for growth. The establishment of an AI or data governance committee, in conjunction with the risk and audit committees, could be a wise idea for a company that is deeply mining its employees’ and customers’ data.
In addition, executives engaged in the areas of highest data growth and usage should have a chance to help shape the system. For example, in Accenture’s latest research on the topic, business leaders said they expect to use workforce insights primarily to place people in the right roles (70 percent), to increase productivity and workforce performance (69 percent), and to enhance organizational agility and speed (61 percent). Using that mix, team members for the chief human resources officer (CHRO), the chief operating officer (COO), and chief digital officer (at a minimum) should be included on the team that is responsible for executive use of employee data and should report to the board for oversight reasons.
Create a coalition for accountability. By appointing at least one C-suite executive to own this area, the board communicates the importance of C-Suite accountability. Who is responsible for employee data—the associated risks and the great potential it holds for positive changes to the business? Many times, this is the CHRO because it is an employee-centric issue. But other C-suite areas are impacted by the actions that may be considered because of data insights—from the COO to the CFO.
Companies that do this best break down siloes to ensure they include the right players and inputs. For example, a data or information executive’s informed perspective is essential—from security practices to incorporating data collection into the day-to-day business. From those who onboard and coach employees to those who design the systems that gather information, boards should ensure an environment of teamwork for specific outcomes, versus ownership of siloed processes.
Employ an agile governance structure. A firm, clear governance structure contributes greatly to responsible business practices as stewards of employee data. However, as any board member can attest, businesses today must be agile. They must change with their consumers, their employees, and the competitive environment.
To help foster agility but set clear guiding principles, some companies use a code of ethics linked tightly within their governance structure. A strong code:
Governance structures should account for innovation that isn’t on the radar yet, as technology allows for new wearables, increasingly sophisticated AI and analytics, and new levels of security needed to address increasing cyber-threats.
These suggestions are just starting points, but they do provide food for thought if your board is leveraging workforce analytics strategically. While there are many perspectives to consider, the overarching takeaway is that while workforce data insights are quickly becoming a competitive advantage, they are best used as part of a strategic governance framework and in partnership with employees. Companies that take this proactive and responsible route put themselves on a fast track to unlock the value hidden within their own workforces.
Eva Sage-Gavin is senior managing director of Accenture’s Global Talent and Organization consulting practice.