As is the case with most any organization, the most important operational contributor to a higher education institution is its people – its human resources. These people are its value-building machine. But they also make up a large portion of its operating costs. Thus, the goal of a Human Resources department is to be as efficient as possible. To effectively do this, HR professionals must know how to use the tools available to them and have the skills to analyze and interpret the resulting data. For those of us that are fond of acronyms, most institutions are engaging in DDDM, or Data-Driven Decision Management. DDDM is an approach to decision making that uses verified data to justify decisions. HR is one of the functional areas engaging in this approach. Also, the value of human capital continues to increase. So, HR processes must become more calculated and strategic to accommodate this shift. This changing HR landscape requires reporting techniques to be light-weight, reliable, and as autonomous as possible so that they can effectively help HR decision makers address the challenges they face today.
The 4 Key HR Challenges
While some may disagree with the over-simplification of the following statement, there’s no denying that HR professionals face four main challenges:
- Leadership/succession planning
- Use of technology
The budget allotment for HR activities in higher education tends to be 50-75 % lower than what’s seen in other industries. In most cases, this is due to state and federal budget fluctuations, which seldom favor the institution. While these variances in the incoming capital are an inevitable part of an institution’s operations, schools cannot let it affect their ability to perform. This creates the huge challenge of keeping their operations viable and sustainable. To make this balance possible, HR departments rely on reporting to identify areas of strength and areas of concern. Reporting helps HR identify where and when budget changes should be made to remain in line with institutional goals. Poor reporting techniques, or a lack thereof, will inevitably yield negative effects.
In higher education, you can think of the HR Manager as you would the General Manager of a sports team. They must: 1) operate within a defined salary cap, 2) constantly ensure that they’re bringing in the best talent, 3) maintain competitive benefits to keep retention rates up, and 4) build on the potential of their existing team. Who and how they recruit is based on both the pool of available resources and on Data-Driven Decision Management. Attracting and retaining quality employees has been – and always will be – the primary driver of HR management. The key difference is that the reactive recruiting techniques of yesterday are being replaced in favor of a more future-focused style. With a historically high turnover rate, the higher education industry has had to concentrate its efforts on trying to keep a stream of quality applicants interested in the institution while also investing in current employees to fill senior roles as they inevitably open. This, then, ties into…
That power team of dependable individuals that keep things running so smoothly? They’re going to retire one day. (Some of them may even have even started counting down the days on their calendars!) Long before they get everyone to sign the card and cut that cake, HR managers need to begin identifying a replacement. A DDDM-conscious HR decision maker does not wait to be surprised.
Use of Technology
The growth of HR reporting has led to a shift in responsibility of HR managers and a greater dependence on technology. Being able to get the most out of the data means spending less time on routine tasks and spending more time analyzing trends to make better-informed decisions. This also means more time is spent – at least at the outset – learning to use new technology. It’s not surprising, then, that – especially for those resistant to change – the solution can also be the challenge.
Challenges of Effective HR Reporting
To help them meet the challenges discussed above, HR professionals at colleges and universities place significant importance on the effectiveness of their reporting. And to do that, they must first address reporting-specific needs to ensure that effectiveness.
The faster-paced HR management techniques of today rely heavily on data analysis. Data needs to be accessed quickly and it must reflect meaningful, relevant information. The interpretation of HR reports drives decisions and confirms the effects of past changes. Leaders must be able to trust that the reports are accurate. The need for accuracy doesn’t affect just HR and it doesn’t apply to just the data itself. For instance, while managing payroll, it may become apparent that Professor Smith’s raise still hasn’t been applied. Though this was revealed through data, the data itself was accurate. But it showed that something was missed – an inaccurate process perhaps. This inaccuracy is felt on three levels: Professor Smith, departmental payroll, and institutional payroll. The consistent theme here is that inaccuracies, in whatever form, will inevitably lead to significant issues.
When reporting on people, security must be considered. The type of information reported can be sensitive in nature, and mistakes could have major implications. An HR report developer carries the extra burden of knowing what data points may compromise a person’s privacy. When creating a report, they must carefully factor that information in while also considering the intended audience of that report. A sizable number of data breaches are a result of simple negligence. Such negligence can hold legal ramifications. Safeguarding that information has become the subject of increasingly strict privacy laws, such as the Health Insurance Portability and Accountability Act (HIPAA), Genetic Information Nondiscrimination Act (GINA), and the Fair and Accurate Credit Transactions Act (FACTA). These policies define procedures to protect sensitive data and require that breaches be handled in a certain manner. As a rule, personally identifiable information (PII), such as a Social Security Number, is protected. The same applies to other sensitive information such as:
- Ethnicity or national origin
- Political opinions or associations
- Union membership
- Sexual orientation
- Marital status
- Health-related information
- Criminal history
Furthermore, report developers should be aware that the pairing of certain data fields can also identify an individual in a way that violates privacy standards. And, divulging management-level information to non-management employees can violate confidentiality rights. An HR reporting professional needs to be attentive to the challenges of acceptable reporting practices regarding privacy and security. Besides the legal necessities, doing so also maintains the HR department’s credibility and operational integrity.
Good reporting methods should provide a clear picture of your organization while remaining adaptable to changes in institutional focus. For example, this week your primary focus may be the cost of your workforce. But next week you may be more concerned whether you have a qualified member of your team to take over for a Biology Professor that just retired. Of course, while all this is happening, your reports may have also shown that your average workforce age is higher than expected and it may be time to prioritize succession planning. In previous years, the occurrences above would’ve led to reactive changes. Data-Driven Decision Management, however, allows you to identify such issues ahead of time and to be proactive in avoiding unnecessary disruption. While management requests do drive changes in focus, the biggest test of adaptability comes when new state/federal government regulations are enacted. Labor policies and regulatory compliance changes mean redefining reporting to remain in good standing. For HR professionals, this means keeping up to date with policy changes and being ready to adapt planning and reporting practices to accommodate these changes.
When we discussed the importance of adaptability above, we looked at some scenarios where data reporting was used in decision making. Defining these deliverables and reporting them in a way that means something is the biggest challenge that a higher ed HR professional will face. Most of the other moving parts of an institution utilize very straightforward reporting specs. HR reporting requires a strategic look at all contributing factors to HR operations and considers the codependent impact of these factors on one another. For example, while the total salary expense of the institution is important, this metric alone does not contribute much to the type of decisions that need to be made. Instead, let’s try reducing the scope to just salaries in the School of Business. If we looked at average salary, compared it to the revenue generated, then to attrition and graduation rates, we now have an idea of the value these employees bring to the institution and an understanding of how incentivized these employees feel to stick around. (And whether leadership might need to make decisions to stimulate change.) The true value of reporting doesn’t come from displaying “just the facts.” Rather, the value comes from the ability of reports to provide key insights into your institution. These insights, then, enable you to draw correlations between current observations and potential trends. The ability to add value is becoming increasingly driven by this need to be strategic.
What to take away
Human Resources is an integral part of any higher education institution. Its value is realized through efforts aimed at protecting, attracting, and retaining employees. The role of the HR manager has evolved to not only guide these efforts but to shape these efforts based on reports and data analysis. As an HR reporting professional, you must be ready to take on some unique challenges and be equipped to adapt. Rising to meet these challenges means reaping the benefits of the most valuable capital available to an institution – human capital.
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