Building A Harmonize Structure for HR Analytics Function

When I was working as an HR Business Partner (HRBP) back in 2019 in a retail supermarket company, the HR Analytics function was not available yet in the organization. There were only COEs that owned the data and thus, HRBP initiated analysis and looked for insights that could solve business problems. Moving forward in late 2022, the organization established a new centralized analytics function under the HR team, that also focused on process improvement, because the HR business processes were still overwhelmed with administrative and manual tasks.

Figure 1. HR Organization Structure for Supermarket Company Case

One of the main agendas of this new analytics team was to improve the hiring process. The turnover rate in retail has outpaced the overall industry by more than 70% (Fuller et al., 2022). Along with the company’s ambitions to open more stores, it was even harder for the Talent Acquisition (TA) team to fill the vacancies in time with good quality talents. However, during the projects, the HRBP team was left out because they had “enough” discussions with the COE (central of expertise) and stakeholders.

The HR Analytics (HRA) team might not have intended to create tension between the team. As the project aimed to enhance the hiring process, they thought to include people that closely related to it. They forgot that HRBP is also indirectly included during the process. HRBP works closely with the business leaders, so they receive feedback not only about the process but also the quality of hiring; the business struggled with short tenure and low-quality talents. Doubts arise whether the project tried to solve the fundamental problem.

The story above may be just one of many practical issues that could happen in any organization. These issues often being neglected, but they are crucial because they create conflict or tension. Kesler & Kates (2010) believed that conflict can happen not because people are not willing to collaborate, but because of different focuses or KPIs. In the case above, the HRA team focused on completing the process improvement project. On the other hand, HRBP focused on aligning the programs or strategies with business objectives.

Many organizations nowadays are in the race to create analytics functions but forget a profound concern that should be assessed: the right structure for the HR Analytics team. When designing an organization, not only we should consider hierarchy and layers, but also the horizontal networks that can give more clarity of focus and accountability from each function. I remember during the Agile Organization Design course, Jonathan Hornyak and Mithuna Bhatt from Accenture shared their thoughts that activity analysis is needed through employee or manager surveys to establish visibility in understanding organizational activities. This analysis will uncover what work is, or is not, been done in the organization, by whom, how much time is spent on the activities, and where there is duplication.

Both HR Analytics and HRBP roles have different objectives, but they serve common stakeholders and require similar capabilities. Patrick McLaughlin, the CHRO of PepsiCo, shared his experiences of managing analytics functions and that the HRA team must have 3 fundamental capabilities: data and technical skills, communication skills (influence), and business contexts. The HRBP team also has common capabilities, unless they don’t master the technical skills for data cleaning, coding, or analyzing.

Companies can have different options to design the best structure for their organization: centralized, decentralized, or semi-centralized (Rosett, 2022). But if the company wants to minimize the tension with another team (e.g., HRBP), they should avoid a centralized structure! Centralized structure – just like in the example case above, will only create tensions between functions for they serve different purposes. Instead, decentralized, and semi-centralized structures will help to balance the objectives and give more benefits to the organization.

Figure 2. Structure Suggestions for HR Analytics Team (Rosett, 2022)

We are aware that technology helps to replace repetitive and administrative tasks. In the analytics function, the data cleaning, coding, and managing tasks are so technical that they could be replaced with technology. Therefore, the HRA’s competitive capabilities – compared to the HRBP team, will be diminished and both teams will be much more alike. If an organization desires to bring more data-driven capability within the organization, it should consider a decentralized structure, for it will help the organization to adapt and change faster. The capability will naturally spread and influence other members, and the HRA team focus on serving each of the team’s unique needs.

However, if the organization wants to bring more partnership relationships between the HRBP and the HRA team, they should consider the semi-centralized structure. The HRA team can have more unique objectives without irritating other team’s objectives. For instance, if the HRA team has the objective to enable process improvement, they will naturally involve the HRBP team, because they recognize the role and objectives of HRBP.

Understanding is the key to building strong relationships and minimizing tension, just like human interpersonal relationships. However, to develop understanding, the easiest way is to avoid making assumptions and have the true experience in others’ shoes. You will never know someone until you live with them. Putting the HR Analytics team inside the HRBP team will help them gain more empathy and support.