Data doubts: CHROs must address credibility crisis

To be truly effective in their role, CHROs must create a culture of data-driven decision making, writes Robin Boomer.

In today’s high-stakes economic environment, Australian executives are increasingly turning to data to reinforce strategic decisions. However, not all data is viewed or valued equally in their eyes, which is creating a serious challenge for those in HR.

According to Gartner research, only 37 per cent of business leaders trust the insights and analysis provided by the HR function. This means the opinions and directives of HR leaders are at risk of being overlooked despite compelling evidence.

To make credible and strategic recommendations, CHROs need to redefine data-related responsibilities within their department, brush up on their team’s business acumen, and prioritise the development of critical consulting skills.

The role of data

In a recent Gartner survey, CHROs cited HR technology as their top investment priority for the third consecutive year. Yet, 57 per cent of HR leaders said skills shortages are undermining their ability to achieve their organisations’ objectives.

Due to the rapid pace of technological advancements, analytics experts have become essential in all departments. Not only are they overseeing the data, but they’re analysing it and using it to provide strategic recommendations.

CHROs need to focus on creating a culture of continuous analytical learning and ongoing skills development. The learning and development (L&D) team can help here by driving partnerships between different departments.

To ensure data is being used in the most efficient way, CHROs should assess:

• Technical skills gaps required to future-proof the HR function.
• Training programs and pathways that help HR stay ahead.
• Partnering with IT to accelerate analytics maturation.

Developing business acumen

Business acumen is a key capability that can drive much more effective analysis, decision making, and the ability to influence stakeholders to take the right action on insights.

As true business acumen requires the utilisation of industry, organisational, and financial knowledge, it can’t be developed through formal learning alone. Instead, it must be gained through education, training, and hands-on experience.

Most organisations don’t have professionals with the required proficiency in these competencies. For example, our research reveals that only 9 per cent of HR leaders feel their department has been truly successful at arming their team with data to enable them to support workforce-related business decisions.

Given that HR decisions are influenced by external factors, such as economic constraints, political uncertainty, or competing stakeholder perspectives, it’s important that this core competency is developed within the function.

To make data-driven talent decisions with confidence, CHROs need to assess how business acumen can help with effective decision enablement. It’s important to look at which team members should be given the opportunity to develop or play a significant role, as well as how the L&D department can be a valuable partner to those identified.

Becoming a credible strategic partner

Even when equipped with data or insights, CHROs can struggle to effectively influence decision making as they navigate competing priorities between shareholders, internal stakeholders, and customers.

According to a Gartner survey, 81 per cent of talent analytics leaders believe it is important for their team to be proficient in strategic consulting. However, less than half (47 per cent) are currently satisfied with their team’s proficiency.

To address this, talent analytics teams need to develop strategic consultants who are skilled in persuasion and storytelling. Those with business acumen, agility and strong stakeholder management are great candidates.

The most important task for CHROs is to empower HR to problem solve using data and demonstrate its role as a credible strategic partner to the business. This means coordinating partnerships between talent analytics and other functions, as well as using HR technology to effectively communicate talent analytics insights.

CHROs that can implement this strategy will be well placed to increase their credibility and have the confidence to influence decision-makers, not only within their department but also more broadly across their organisation.

Robin Boomer is a senior director of advisory in Gartner’s HR practice.