CFO’s fantasy- analytical HR

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“Addressing a crowd of about 300 financial executives this morning, Rutgers University’s Richard Beatty, a professor of human resources soundly denounced the corporate HR profession for being mostly unable to provide analytics that are useful in making workforce decisions that build economic value.”
-Excerpt from article in CFO.com

As expected, article drew flak from HR community. But then, learned professor was catering to ultimate fantasy of every CFO- HR that deals with hard numbers and not “soft issues” like motivation, engagement etc.

Based on my experience of working for an organisation where analytics was nothing less than religion, I feel analytics don’t tell whole story. Statistical analysis, graphs, numbers etc. have their limitations.

Let us take example of performance levers used in IT company viz. operating efficiency, utilisation, offshore leverage and pyramid ratio. Leadership team monitors them every month. I have given some fictitious figures which will delight CFO. But graphs are not telling the whole story esp. from HR and delivery side.

High offshorization means engineers have less opportunity to work overseas (read US) which demotivates them, similarly maintaining high pyramid ratio means less chances for promotion, as promotions would mean lower pyramid ratio.

High utilisation means reduction of bench, zero bench may be ideal on paper but not practical, high operating efficiency also means engineers are working for longer hours esp. if >100.

Such “soft” issues may not be of interest to CFO. But soon “soft issues” like demotivation and frustration lead to “hard” issues like high attrition. Numbers cannot capture issues which can only be sensed, definitely a “soft skill” which not just HR but every manager should possess, including CFO!

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