Episode 162: How to Prepare Your HR Data for EU CSRD Reporting (interview with Yves Van Durme)
In this episode of the Digital HR Leaders Podcast, David is joined by Yves Van Durme, Global Human Capital Leader for Organization Transformation at Deloitte, and a thought leader at the forefront of HR innovation.
Yves is a recognised authority in the field, and in this episode, he offers profound insights into the ramifications of the recent EU Corporate Sustainability Reporting Directive (CSRD) regulation, which mandates that organisations in the EU report their impact on the environment, society, and workforce by 2025.
During the conversation, you can expect to learn more about:
The pivotal implications of the EU CSRD regulation for HR and organisational reporting;
The readiness of HR functions to comply with the data requirements of the CSRD;
Key metrics and actionable steps for HR to initiate their data-driven journey;
How to leverage workforce data to create value across various levels of the organisation;
The strategic role for HR in harnessing data insights;
The shift towards a unified workforce perspective prompted by the CSRD;
Strategies for empowering HR Business Partners in embracing data-driven roles.
If your business operates in the EU, this episode is a must-listen to the alignment of your HR practices with the EU CSRD regulation.
Support from this podcast comes from Visier. You can learn more by visiting: Visier
If you would like to discover Visier’s groundbreaking research ‘Unlocking Manager Effectiveness: The Next Driver of Value clicking this link.
[0:00:00] David Green: Today's episode is tailored specifically for you if your organisation has business operations and employees within the European Union, because today we have an incredibly important topic to explore, one that has the potential to redefine how HR functions approach data, reporting and decision-making, the recent EU Corporate Sustainability Reporting Directive, or CSRD. This game-changing regulation, now a part of EU law, requires companies meeting specific criteria to report on their environmental, social, and workforce impacts. And with a submission deadline in 2025 covering data from 2023 and 2024, organisations are faced with a transformative journey and HR professionals have a pivotal responsibility in navigating their companies through it.
To help us unravel the implications and opportunities of the EU CSRD, joining me today is Yves Van Durme, Global Human Capital Leader of Organisational Transformation at Deloitte. Together, we'll explore how HR can effectively respond to the EU CSRD, not just as a compliance requirement, but as a chance to elevate HR strategic impact within organisations. We'll also delve into the practical strategies that HR professionals can implement to leverage people data and people analytics effectively, empowering them to make informed decisions that positively influence their workforce and organisational performance.
So, if you're an HR or people analytics professional ready to embrace the possibilities of the EU CSRD and unlock the full potential of people data, you're in for a thought-provoking and practical conversation. So, without further ado, let's start off the conversation with a brief introduction from me.
Today, I'm delighted to welcome Yves van Durme, Global Human Capital and Organisation Transformation Leader at Deloitte, to the Digital HR Leaders podcast. Yves, welcome to the show. Before we get started, could you please share with listeners a little bit about yourself and your role at Deloitte?
[0:02:24] Yves Van Durme: So what's interesting to know about me is I used to be a high-performance sports coach, so it was my first involvement with data performance in a different context. Joined the firm, as we call it, about 14 years ago. The role you describe is my current role, so in that sense it's very spot on. What's also linked to the topic is I used to be leading human capital in our Belgium practice. And at that moment, we started looking at how do we make progress in what was I think then called HR analytics, and we got into conversation with a sort of boutique called iNostix. They joined us a couple of years ago, which accelerated how we looked at it from a less generic sort of BI, how things were called at the time, to focusing more on people analytics. And I've had the pleasure to see how that grew in our larger organisation, so I think that's also one of the elements which I think is very relevant to org transformation change, which is my responsibility, but the use of insights and data has been fuelling that more in my experience, more in the context of transforming organisations, not always the HR function itself.
[0:03:29] David Green: Really interesting, certainly about the sports. I'm going to ask you a question about that in a minute as a follow-up, but many of those listening will recognise the name iNostix. Luk Smeyers, he was brought in working with you at Deloitte for a while, wasn't he? And Luk, definitely one of the pioneers of people analytics in Europe. And so I just want to give him a shoutout, hopefully he'll be listening.
So, Yves, that link with high performance sports is really interesting actually, because there's a lot that we can learn as organisations from how sport look at performance and how they use data to do that. I'm a big fan of Liverpool Football Club, who are probably one of the leading Premier League teams when it comes to using data in sport. I'd love you to share some insights and maybe what you learned from high-performance sport that's helping you in your current role.
[0:04:12] Yves Van Durme: I was in high-performance sport coaching over 24 years ago now, so that's very old in terms of technology terms. So, it was not always very advanced technology wise. I was active in squash, which is a very individual type of sport. At the same time, the context in which the game is played is fairly constrained in terms of literally the room is constrained. And we used to do very simple things at the time, which was literally you take a piece of paper, you take two coloured pens, and you're just jotting where the ball is bouncing, and you have sort of a heat mapping of where the ball is moving to look at patterns which are involving the tactics which you could use to influence game playing and how you adapt your tactics. That's the sort of things which are the real-time feedback that you could use to improve feedback between games, between sets, which I think is a very interesting perspective, which I then struggled to see back to, how do you help leaders, managers to get better in the decisions they take, which I certainly 24 years ago felt like, where is the data to take decisions, especially when it comes to people and people performance?
I think we've come a long way since, but if you compare it indeed to sports and if you do advanced capabilities like the ones you mentioned, Liverpool, we're certainly not there. I think we see nice examples of audio analysis in terms of patterns in team behaviour, and even shift workers, happy to unpack that a bit more, where you also see equivalence of that. But I would suspect that in most organisations, we're not treating teams as high-performing teams. We talk about it, but we don't use the same depth and breadth of analytics to gain one more inch, one more centimetre, one more second, one more, which I think is the sports environment. How can you win these small things? I think in businesses and other organisations, we could absolutely learn more from that. But as I said, we've come a long way, so it's nice to see the progress as well.
[0:06:03] David Green: Yeah, we've certainly seen progress and obviously we'll be talking about that over the next 45 minutes or so. But what we already want to start with today is a topic that I know that you'll be quickly becoming an expert on, probably with talking to your clients. And you recently spoke on a Visier webinar about the new EU Corporate Sustainability Reporting Directive, which we will now call CSRD for the rest of the conversation! These new regulations, which I'm sure some of our listeners will know have been signed into EU law, and they require companies who meet the specified criteria, and we can maybe cover what those criteria are in a minute, to report on the impacts that they have on the environment, their workforce and wider society.
My understanding is that these companies have been given a deadline for submission in 2025 and that will cover both 2023, so ie the year we're currently in, and 2024 data. Yves, I'd love you to share, maybe share a little bit more about the CSRD regulation, certainly the companies that are in scope of that, because it's going to be most companies from what I understand, and what this means for HR given that maybe for the first time, this is placing the same importance on people data as there is on financial data.
[0:07:13] Yves Van Durme: It's a different speed. So, for some organisations, and sorry to use some more jargon, but they used to be the non-financial reporting directives, which was already applicable for some large, quoted organisations. They are due to actually report 2024 already, so which is tomorrow basically. The one that you mentioned for CSRD is as of 2025. And of course, you have to be able to compare with at least one, preferably two years, to be able to compare and see evolutions that actually make progress. The scope of organisations is actually massive because if you need to meet two out of three criteria, one of them is 250 people contributing to your organisations. It's interesting how the employee definition has been evolving. It's a turnover of €40 million or assets value above €20 million.
As soon as you meet two out of the three, you are subject to the directive and the reporting guidelines. And the reporting guidelines are a very extensive document. And that's only stage one, where you talk about One Workforce, which is about just shy of 100 data points that you need to be able to report on, and also describe in terms of actions, how you progress on a mixture of different people-related topics, which makes it very interesting. And I think it's also the actions related to that that also make it a shift from, it's not only compliance, which of course is important. Every law you need to comply with law, fine. But at the same time, reporting on actions for improvement suggests that you need to go beyond just complying, "Well, here is my data". There's an action expected on things like gender pay gap, diversity, work-life balance, so quite a mixture of different topics, which I think it make it very interesting in terms of impact it can have on organisations and their performance on the people's side as well.
[0:08:59] David Green: This is part of a trend, because obviously we've seen in the US, the Security and Exchange Commission mandating disclosure of certain human capital data, I think it was back in 2019, 2020, I might get the year wrong there. This isn't just about compliance, this is about action as well, which is perhaps taking it to the next level, but I think it's part of a trend that will continue. So, this might be a leading question, I apologise for that. But do you think HR functions are currently at the data maturity level to be ready to report on CSRD?
[0:09:29] Yves Van Durme: It's probably a very broad type of answers, and probably some organisations would be able to say yes. I would suspect that even the organisations that I work with that are before CSRD, they still don't know. So if you don't know, that suspects that you probably don't have the answer yet. You might get some good surprises that you have more information than you thought you would have, so that's the cautious version. The less cautious version is if you don't know what you have, very likely you're not ready to do that, you're not reporting on it. And I think there's certainly one category, which is the definition for HR is being transformed. The One Workforce is not only employees, it's people that contribute on a continuous basis to the value of the organisation, which I think is a very fascinating definition for you to look at.
So, this is broader than your own typical employee base, which makes it, no, I don't think most organisations are ready to report because in Europe, there used to almost be a distinction. Like, I'm not looking from the HR perspective at the non-employees; now you have to take responsibility. So, I think that side for sure, most organisations would not be ready, and I would suspect that's the case for all the others. The same element, it's a bit of a buildup as well, David. If you look at some of these guidelines, there's a lot of qualitative reporting as well, which for us more quants is something that, well, it's not going as far yet, but to your point, it's a trend. They're already talking about, we're talking about the One Workforce, but there's more to come in terms of other reporting guidelines, which they're already drafting. So there is more to come, which will make it even more interesting to see how we move there.
I think this is where some of the clients that I speak with are even frustrated because it's like, how much and what's the impact beyond compliance? I think from a positive side, this is really to your point, you can make an impact because you're looking at the performance of your organisation, so the value of your organisation, which is driving I'm sure the conversation you and I wanted to have about HR and people for ages, but have that as a more consistent basis for organisations. So, I think I'm looking forward to, it will be chaos for many organisations, probably 2024, 2025, because they might underestimate the work, they might be very positive about what they already have. But I think that chaos is a good opportunity to accelerate and speed up the impact of insights on the people aspects of the organisation, because I think they make a big difference and it shows absolutely.
[0:12:00] David Green: That's really interesting, isn't it, because it does seem a move, when we think about workforce planning now, organisations traditionally were just looking at permanent employees and actually when you look at the data, a significant proportion of sometimes key workers are not permanent employees. And traditionally, of course, HR has only looked at permanent employees, procurement have looked at contingent labour and maybe looked at consultants as well that they may be using, and this is an opportunity I guess for HR to maybe get their arms around all of this and think about the workforce as a whole. The report on that I think makes it very interesting as well.
Is there the right level of awareness currently with organisations that this is something they're going to be required to do; and maybe as part of that, Yves, maybe you could just share some of the key metrics that HR need to be looking at and maybe how they can get started now?
[0:12:54] Yves Van Durme: So, to start, there's a lot of public information available about that. So, this is EU, so everything is transparent. It might be lengthy to read and it might be sometimes not straightforward, but there are glossaries and definitions. So in that sense, there's the level of self-help that IFAC, the organisation that's supporting the guidelines for reporting, has developed. There are some videos, so I think they have done some nice work there. It's a self-help guide. It doesn't say anything about the data that you have or don't have in your organisation; that is the part you need to do yourself. I think a number of organisations have started to look at it, not specifically from the people angle because the people angle is about 100 data points out of 1,100, so it's a massive effort for your enterprise altogether.
Then you get into discussions like, do you do this by functional silo? Do you do this for the enterprise level as well? And I think you already made the point, David, if you're looking at the broader workforce definition, there's something that used to be a procurement consideration that now is a One Workforce reporting consideration. I think it's a good opportunity to do that in a more consistent way, probably recognising that in most enterprises, it might be divided between some technology angle, the direct managers have responsibility, maybe even strategy that's involved in joint ventures and the likes. So, I think that's quite interesting to get started. I think there is some easy way to do a bit of self-testing, and there is many criteria to look at. There's some elements which are fairly simple, and when work life is not very much elaborated, it has what's the right of people to have family-related leave, and how much is it used? Depending on the sophistication of and the countries where you're active, there might be different ones and you have to look into to what extent is it used.
It becomes a bit more interesting when you get into how much has it been asked for, because different applications exist in different countries. How much do you need to give it to -- do you need to give it to a percentage of people? What are the ways to say no on enterprise for whatever good reason of criticality, and so on and so forth? So, that's something which is not too difficult in itself. But then the question is, is it automated, because you want to look at it not just from a manual perspective? And then it has also adequate wages, which is looking at minimum standards by types of activities. And then it becomes already more granular, because depending on how many activities, how many types of jobs you would have in your organisation, looking at minimum wages is something quite broad to look at. And you look at minimum wages in terms of, do you have a standard by country; do you have a standard EU level? That also starts to be a bit more work.
It can also become a bit more interesting, because if looking at the pay gap, there's a "male-female" is the wording that is used there. So, looking at that spread, it is quite average level. So, I think this is where there's also a bit of a risk, in my mind. You can look at averages, and I'm sure you know that as well, David, but maybe you should be more looking at it than just a gender pay gap, because in terms of, is there more tendency to work part-time? Yes, we see that women tend to work more part-time in some countries, in Europe, for example, than in others for some types of activities. Let's make sure that the adjusted gender pay gap is what you are using as well in terms of also looking at taking action.
There, it also looks at action taken, and that's where your point about 2023, 2024, 2025. Well, actions taken, if you have to report in 2025, well, you start reporting. We also have to start to compare what was the data in 2022, 2023; what's the action that you had taken; to what extent have you closed on the gap? It's not clear in terms of any penalties or any consequences, but people that read your report as a shareholder, whatever dimension, if they don't see progress, there's an expectation of progress that is there. So, I think that's also driving, and there's many more elements. Some of them are not very sophisticated, some are more interesting out of that list of One Workforce 80 data points, which I think is a very interesting perspective.
So, you can get started, a video of self-help you can do. There's of course many consultants, advisors that also want to help. I think starting by understanding what it is about, how much is it that you need to cover, and also getting beyond what data do you have. So, take the most difficult data points, check for your own organisation. That should give you a sense of, well, how much work is there? Because I think there is no time to waste. I think that would be probably suggestion number one; there's no time to waste.
[0:17:20] David Green: I think what's interesting as well is this is kind of a move where number one, there's more regulatory requirement to disclose certain human capital information, but actually if we think wider, there's more data being collected about people within organisations, more data available, and I know we're going to talk a little bit about some studies that you've been doing at Deloitte around this need for actually, if you really want to create a healthy environment around people data, transparency and trust are really important. And actually, in a way, this is the way that employees can be able to look at the organisations that they potentially want to work for and look where they are around things like gender pay gap and everything else and equal pay. So it's quite an interesting move, really.
As you said, and as we've discussed, this is a great opportunity for HR to become more data-driven in their strategic approach. And as I said, I referenced the excellent recent paper that you and your colleagues at Deloitte recently published, which I actually highlighted in my regular monthly roundup of resources for May, and I definitely recommend that people read it. It's called Beyond Productivity: the Journey to the Quantified Organisation. And for those interested, listeners, the report, which we will provide a link to that as well in the transcript, highlights the opportunities to use workforce data to gain a holistic view of the organisation to help create value not just for employees or individuals, but also teams, the organisation and actually society as well, which is something that Jonathan and I talked about in Excellence in People Analytics. We think about actually the benefit it can provide to the wider society.
So, Yves, lovely if you could tell us a little bit more about this research and specifically how does the value created at each level reinforce value at the other levels as well?
[0:19:42] Yves Van Durme: I think it's largely influenced by also more and more workforce ecosystems and ecosystem thinking altogether, which is something that we've been starting to look into more specifically as part of our human capital trends, and then we typically dive a bit deeper and this is where this research is a bit of a deeper follow-up to some of the trends we started touching upon. I think it also looks at the different levels, individual, teams, organisation or enterprise and society, because I think this is where we are, our enterprise or organisations are expected to interact at all these levels. We touched on CSRD as an example.
This is something that's clearly at the crossroad between what's needed to be done at an organisational level, so what is the data that you need, the insights that you need, and do you want more? Because of course, nothing stops you from going beyond the regulations and seeing a competitive edge. At the same time, this is also where it touches on society, where you get into elements of, for example, geolocation, which is very interesting technology, and how you can use that not only for the benefit of your enterprise, and think about prevention of deforestation, which also has an impact on whatever activity you might have. And deforestation might be something that has an impact on your activity, but it certainly also has a link to society more broadly.
I think this is where our report is looking into many facets of how can we gain more insights and gain more performance on individuals? But for example, it looks specifically into elements of wellness, wellbeing, which is typically a fairly individual element, and there is real-time evidence that you can use in different environments to use a different pattern recognition, which is looking at, well, David, you might be tired, you might know that in your car, a suggestion to take a break, there's these small cues, but it can be more advanced in terms of, well, how do you help problem solving, which is speeding up, end up getting stuck in something, that pattern recognition is very useful at individual level. Yet you also see the team level, which is also looking at well in many organisations, the team is where the actual performance happens, less and less at individual level. So you get into the connection of what's the best team setup, how do you improve on the team setup.
So, it's a quite extensive report looking at many different facets of how can you improve insights at an individual level? For example, again, careers, which is typically a very individual progress that you make or evolution that you make, yet it also influences maybe even the structure of your organisation over time. So, we looked at very different elements, which I think is also very practical, in terms of many good examples that you can unpack if you are more a do-it-yourself type of perspective, also in that study. And it also reflects on how to make all of that happen because I think you mentioned trust is certainly one of the key drivers of how organisations are creating more and more insights, and how this is used for the benefit of these different stakeholders as well.
[0:22:37] David Green: Yeah, I think one of the things I really enjoyed in the study was it made a point right up front, this is not about some of these stealth productivity tools that some organisations are using to monitor employees, which I think we both agree we would advise companies maybe not to use; but this is about using workforce data for the benefit of all stakeholders, as you said, at the individual level. At the team level, you can really move the dial, I think, on things like productivity and wellness, because if you can get teams to perform better, then that has a bigger impact on the organisation, doesn't it? And as you said, the societal part as well. What is the role of HR and people analytics in reinforcing this?
[0:23:19] Yves Van Durme: This is a critical role. It's also a conversation that you have in terms of the end of jobs and evolution towards skills and what's the role of HR. And if I use maybe a bit of an anecdote, but when our job description is used in the life cycle of an employee, this is fairly limited in most organisations. It is at hiring, maybe at termination, and then in between. It's mostly used for ISO audits, certificates where you need job descriptions to have that, but that's the only thing. So, from a frequency of use for an individual or for an individual's role, this is fairly limited. So we need other things as leaders, as managers to get insight in terms of how does the work get done on a day-to-day basis? And this is where that restrictive approach that job descriptions are actually narrowing the boundaries of what you do, there's more and more need for flexibility.
I think that insights on work, and you talked about teams, it's fascinating to look at these examples where you have video pattern recognition in shift work, which is actually helping to have dynamic allocation of breaks, because there are days where we are a bit more tired for whatever reason, we didn't sleep that well, our favourite team won or lost on the weekend, whatever it is, and that has an influence on actually, can we use more shorter breaks or a bit longer breaks? That's something which is in the benefit of all in terms of shifts, because there's prevention of accidents, the production levels, quality levels are up as well, which I think is a very good way of using that, but it requires trust in all parties involved.
But you can also see this is at the level of the actual shift itself, but you can also redistribute how the production chain actually can improve in terms of continuous improvements, which might even lead to redesign of the production chain, to stay in the same example, which is redesigning the organisation. I think this is where, for me, this is where we're moving away from what sometimes is a more classic remit of the HR function, like we provide the best people, we support education to a certain level, but actually we're not involved in the day-to-day activities. I think it's the day-to-day activities where we need to gain more insights, and I would prefer HR to do it. But looking at these insights about how the work gets done or shift allocation, this is typically where it's a bit of a sensitive thing, like technical skills is something that many HR leaders want to stay away because the business should know better on how work is done. The business should know better, yes, but what is our role, at least in HR, to provide insights, to help in improving on decision-making, to go beyond some of the convictions or some of the experiences and the biases that we have? I think that's a critical moment for HR to step in.
I think the link to the broader workforce helps because it reduces the bargaining power that managers have, because as a manager, it's great, you ask HR something to solve from a talent perspective; but at the same time, you ask procurement; at the same time, you might use your network; at the same time, you might use whatever joint venture support. You have options as managers by making it more transparent. I think you will reduce options, which I think is not a bad thing, because it forces you to take more transparent choices, and that transparency also helps to build more trust at different levels.
But it's great to see these pattern recognitions, which used to be science fiction, back in when I was in my sport days. You have access to the data, the transparency and trust comments you made, David, is critical, but then you get into great insights, which as long as you use it for the benefit of all and not saying, "Yeah, but David, you can handle less breaks, you need less breaks than me, so maybe you should get rid of me", that is the negative use of that. It's supposed to be mutually beneficial. As long as you have that credibility, there's fascinating things that you can get out of it.
[0:26:56] David Green: If we look at it in a broad sense, with data, with people data, with some of the external data that we can use as well, and particularly when we actually then bring it together with some business data, it gives HR the opportunity to not just support in recruitment or support a career transition or support an exit or support with learning, it's an opportunity to really support work, workforce and workplace, even workplace design as well, as we think about hybrid work, and really to move the needle on the organisation, as you said, at those four levels, at the individual level, at the team level, at the organisational level, and also ultimately the societal level as well.
What are some of the practices that you're seeing from some of the clients that you're working with that is kind of moving towards that nirvana, shall we call it?
[0:27:47] Yves Van Durme: Yeah, one of the examples that I love to share, it's a pharmaceutical, it's still at a proof of concept, it's only about 1,000 people, which in their case is a fraction of their workforce, but it's looking very much at the perspective of the teams. So, we moved away from these 1,000 people to look at things like engagement survey for that group as an average for that group. It's very much what they shifted to, is there's a cycle where these HR business partners in that environment, they have conversations about how is the status of the teams? And they look at the teams, it was long discussion, what is a team, what is a working group? But they came to a consensus like, this is the assumption we start with in terms of these are the teams that we have within that population of 1,000 people.
On a quarterly basis, they're looking at the team perspective. They're looking at a team perspective in terms of how well is that team doing and performance-wise. It was a bit of a discussion as well in terms of what's really performance. So, we had quite a broad setup and we used it as well to enrich the data. That's looking at the progress of the team performance and what is the direction of travel. Do we see the team performance stay stable, go up or go down as one axis? And the second axis was also looking at the perspective of a proxy for how good is the team from a wellbeing perspective, which also turned out to be quite correlated with the actual trajectory of the performance. But it's looking at it from a team level, which meant that in a conversation with you, David, if you would be the leader of a number of these people, it would be, "Let's not discuss your group, but let's discuss the seven teams that you have. And let's discuss at the level of team one, team two, and what are actions to be taken".
By doing this with a quarterly cycle, it's also something that these HR business partners, some of them were not very analytic, insight savvy. They were sort of, "Well, it's important, but I don't really know how to use it", to getting into conversations about, "Well, this is the trajectory every quarter on the team. Let's look at it, let's do something, let's take action". But with a three month cycle, it also feels like a fairly quick cycle, which is something that the business leaders like, because otherwise it's sometimes it's felt in their case, like, "Well, HR is coming with a biannual engagement survey, and then we take fairly generic actions"; at least that was a perception in that organisation, and to take it from there.
So, I think this is a good practice, which is looking at, for me, to get closer to a real cycle for the business, get faster in terms of actions, maybe not be too ambitious either, but at the same time there's a wealth of data created because the trajectory in many cases, it was wrong, because you would say as a leader, "Well, I think the trajectory of that team is going actually up" and you would see in the next quarter, actually, it went down or you were right. It also adds additional information, but it also improved the "humility" for the leaders to say, "Well, what are the decisions we need to take?" And it reinforced the relationship with the HR business partners like, "These are really useful insights for me, and how I can drive and improve my business without taking over".
That's why I like that example. It's early days because it's only 1,000 people of a 100,000-plus people organisation, but I think it's very promising activity that they've done, which I think is also generating even more data. And to your point, it combines some people data with other indicators. It's a commercial environment, so a lot of commercial indicators as well, which is an easier element of performance to look at measuring commercial performance than it might be in some other environments. Yet, I think it's a good way to look at progress.
[0:31:23] David Green: It's an important point, isn't it, that if you're in a big organisation of over 100,000 people and you want to try something, do it in a smaller group where there is a defined need, where you've got a supportive business leader that's keen to get insights to try and improve performance, improve productivity, improve revenue, whatever the outcomes it is that they're trying to move. Try it there and then see, learn from it, iterate, and then maybe look if you can apply it elsewhere in the organisation as well, if you want to scale it. I think it's, don't be afraid to start small.
[0:31:59] Yves Van Durme: It started from connecting two things, David, because the commercial leadership was looking at two challenges around people. One challenge was, there was a lot of perception that at least perception, if not more, that workload was too high, priorities not clear, post-COVID type of moment where sort of, "Well, everything is important, everything is a priority" sort of perception, with some ratings going down on engagement, which was one driver. And the second one is, we need to win more in the markets, and we miss a bit that competitive behaviour, which we would like to see more of. And if we're treating it as a separate conversation, by bringing it into one conversation, it again made it a bit more holistic in terms of, this is one conversation.
It was a bit of the "aha" moment for them. Like, "Yeah, it doesn't make any sense to discuss engagement and the next hour to discuss performance about where are we winning, where are we losing". These two things are the same when you connect at individual level. And that's how it drove, "Let's do something, let's find some more insights", with a very humble attitude like, "Let's find more evidence, let's see how we can take action". And by doing it on a quarterly basis, it also helps fuel the decision-making. It was not so much, "We will tell you managers if you're right or wrong". No, it's, "Let's learn from this together". And yet, let's improve the performance and the well-being of every single team and not work into averages, which I think is a very good way forward.
[0:33:29] David Green: In your view and your experience, how can people analytics teams help smooth the path of HR business partners, and maybe other HR professionals, so that HR can get to that level more quickly?
[0:34:34] Yves Van Durme: I think where it helps is to unpack the problems that they're trying to solve as an HR business partner. There is a very serving nature in most people, like how can we serve, how can we help our internal clients, which means helping to gain insights in, is this even the right problem to solve? That's where I think the HR or people analytics teams can help to bring some insights. We think that we have a challenge in the age pyramid, for example, in our workforce, again, thinking about the same commercial environment, how is that actually making an impact? Is there even a link to be found there? I think that's an element.
The second element was one of the questions that they had was like, what's the difference between the performance of the employees and the agent-based workforce that they had in some other markets, which was interesting to see what are the drivers of performance, which was also stimulating the conversation. There was a belief we should have more agents, we should have less agents, which I think is an interesting conversation to have, but adding some of these people insights to the conversation was not replacing the decision-making, but it was actually helping the decision-making. I think this is where there's a bit of that paradox where most HR business partners, they love to contribute more to the decision-making. They feel very good when they're involved into the more strategic conversations, but they sometimes lack a bit of that insight. And I think this is where the HR analytics, people analytics teams can actually provide more and more of these insights.
Yet the clear hypothesis, what decision we would like to take, that's the interesting part. Because I feel that most HR leaders, HR business partners, they get more airtime on the leadership teams they serve. But then the more airtime is actually not more data or insight driven, the more airtime is used to spend time on longer discussions about talent, but not necessarily better discussions about talent decisions. Because I think this is where, how do we move people? Do we move people? Do we move them in full? Do we actually have them contribute to something which is part of the learning and evolution? How do we recombine team setups? Maybe how do we reorganise, which is very fashionable these days to reorganise? Is it actually yielding the benefits we expected by the reorganisation? Will we clear on the expected benefits of reorganising? So it's both the people at the more individual side, but also the department, organisation, team setup.
I think this is where these hypotheses are clear and where the insights can be very helpful. And saying we don't know from an HR people analytics is also very helpful, because then it reduces the discomfort like we want to take "the right decision", but if it's something where the evidence is not clear yet, well, that means that as a leader, you can know that you're comfortable to take the decision without more insights. And there's sometimes, in most cases, actually, I think, David, there is a lot of insight that can be brought by HR and people analytics teams.
[0:37:24] David Green: Yeah, and I guess to do that, people analytics teams need to understand the different nuances of the business units, don't they, so they can actually be providing insights? So, it's a lot of it's about good communication, isn't it, between the people analytics consultants, if they've got consultants in the team, the HR business partners and the business leaders, so they can really understand what's the business trying to achieve, what are the outcomes they're trying to affect, and then what are the people elements of that, and that should hopefully help them provide the insights that supports those conversations and maybe prompts deeper questions, bigger questions that maybe involve more specialised people analytics work.
This is the question of the series, Yves, and it's a little bit related to the one we've just asked. I'm going to ask this question, give your answer, and then I'm going to share some research that we've just done at Insight222, actually, around building this data-driven culture piece in HR, and get your reaction to that as well. But firstly, HR leaders, how can they build a data-driven and digitally-literate culture in HR?
[0:38:24] Yves Van Durme: There's different answers, because I think there's different preferences. I think there's still many HR leaders that have a, let's get the basics under control or even perfect, and I think going against that is sometimes difficult in my experience, because it's like get it even better, but then you should have the insights of looking at how many cases do you have open in all HR requests at every real-time information or as close as possible number of exceptions, which is really the operational side of all the HR services and products you're offering. I think that's something which gives you the credibility, because you can then speak in terms of quantified elements, like how many exceptions we have, because this is typically where a lot of time seems to be spent in HR, is we discuss a lot of exceptions. But if exceptions are 1%, 5%, 10%, 20% or 50%, that is a very different view on what is actually an exception. That is for me more the bottoms-up perspective, I think, from a more classic, let's be very strong in our HR function.
I think the other side is looking at, I think, reorganisations are very fashionable, but I'm always surprised by the speed of reorganisations. It's like, even before you can actually measure the benefits of the reorganisation, there's a next wave of reorganisation. So, I think there is for me something in between where I think HR business partners and certainly HR leaders have a role to play. Let's try to be a bit more explicit about what are the benefits of the reorg that we want to achieve. Let's also see how we want to measure them, because I think there's also a learning because a reorganisation is an easy fix for a leader. I want more or less of something and I'm shifting the organisational structure, which of course is one way to create a bit of movement. But I think it's a nauseating effect, like let's go left, let's go right. At some point, if you're part of the team, it's like, where is this going?
But I think this is where is this going from a customer satisfaction, which is probably important, is it about innovation? Is it about both? Let's measure actually if that new organisation is stimulating more innovation, let's get into that level. I think this is where it would typically not be considered HR, are we more innovative as an organisation? But I think it's people behaviour, it is organisational behaviour. I think this is where, for me, I would encourage HR leaders to go in that direction. And you can do that whatever your level of self-confidence or humility. Let's do that in an open inquisitive questioning approach in terms of what you really want to achieve with this reorganisation or organisation evolution of shifts, and how will we actually know that we are getting there? And I think this is where HR business partners, but a familiar head of HR is also the first HR business partner, how do we do that; how do we make more measurable? And sometimes it's difficult to measure, but I think we have a lot of measuring techniques and access to external data and others; that excuse should be long gone now.
[0:41:23] David Green: Yeah, and before I actually share the insight of the research, there's something that I want to react to, as you talked about, people do transformations and then they don't even measure the impact of the transformation before they try and do another one, a reorganisation. And actually, analytics can really support and measure the impact of transformation. So, if you're reorganising teams, for example, you can look at network analytics to understand, are the new teams performing or are they not performing? I don't know if you're seeing that in some of the organisations that you're working with at the moment, that kind of increased use of network analytics.
[0:41:53] Yves Van Durme: Absolutely, and network analysis, and you see it for yielding collaboration. I think the degree of collaboration is something that I hear many leaders and CEOs complain about. We need to collaborate more, collaborate more, but then they don't have even a good proxy of level of collaboration in their organisation that goes beyond surveys looking at sort of, well, how collaborative are we in the organisation? But that's a very vague statement. I think the collaboration is between activities, between functions, between squads, between tribes, whatever your setup is. I think that's where gaining an insight, but also consciously improving on the level of collaboration, is back to the comment we made about trust, how do we keep on raising the level of trust, transparency about who's doing what, how to achieve it? But indeed, a network analysis is becoming increasingly used, not just as a nice experiment, but more on a continuous, not literally, but on a regular basis, looking into how do we improve our collaboration index in in this quarter, next quarter, which I think is a good practice as well in terms of, if you struggle with collaboration but you don't have any indication or proxy even of collaboration because it's a complicated construct, I think that's a minimum. At least your driving temperature is also, let's get into the right direction. I think sometimes we don't need to make it too sophisticated to get started and let's improve the measurement over time.
[0:43:15] David Green: We published some research and we were looking into upskilling HR specifically in data literacy and looking at organisations that were doing this well and versus organisations that were struggling with it. And two of the four key insights that we found, and I'd love to get your reaction to this, Yves, was number one, if you want to create a data-driven HR function, then role modelling by the CHRO and the HR leadership team is really important. We found that where the CHRO and the HR leadership team were displaying a data-driven approach themselves, then the rest of HR, particularly HR business partners that maybe weren't part of that team, were more likely to invest time in upskilling themselves. Obviously, the organisation needs to provide the tools for them to do that.
The second thing we found was that where responsibility for upskilling sits with the people analytics leader, again, organisations, HR practitioners were far more likely to develop their skills and interestingly, more budget would be allocated for that exercise as well. Now, obviously, the people analytics leader and their team would be supported by colleagues in learning around learning design or maybe external providers. And again, I know obviously Deloitte, in particular over the years, since acquiring iNostix, you've been working with organisations to help them on this journey. And I don't know if you've seen any examples of that around role modelling or the people analytics leader taking a lead on the upskilling of data, or any other insights that you'd like to share around that, but I'd love to hear those.
[0:44:43] Yves Van Durme: I think we see different movements, one which is completely in line with that, which is a CHRO, taking more a data-driven approach, more insight-driven. I tend to use more insights into decisions because I think this is where HR is not always very explicit about how are we supporting improvement of decision-making. And of course, you can do that into classic HR decisions, which is the minimum, I think. But you can also go further, as we discussed, in terms of other work-related decisions. Imagine that the shift composition, the team composition and the continuous improvement there. I think that's a good example of where is that strictly HR, is that the leader or is HR supporting the leader? I think these are good examples. It's interesting to see how HR applies it to themselves, which I don't see that often.
I think the analytics leader, I see two schools of thoughts. One, which is more there is an increasing presence of a Chief Data Officer, which is looking at AI and so on and so forth, which is sometimes overshadowing more people analytics activities; or whether including it in what they're doing, because if you're looking at massive opportunities in AI, it has a people implication in many different ways. Is that something that is done through a people analytics lens or is that more the broader analytics capability, the organisation, is it done together? I think that's where there's a requirement for speed. And I see where the HR function is not really following suit in terms of speed and capabilities, it seems to be overshadowed by the broader data, AI capabilities in an organisation.
So it's both, yes, I think you're right. At the same time, I think there is a bit of an internal threat. If it doesn't happen from a people or HR perspective, it will happen through other angles because the success of AI, when you do research about how organisations are successful at using AI at scale, for example, it's still very limited, but when it's successful, there are elements of culture and leadership skills that come into play as well, which of course is core business to HR. So, yes, I think this is absolutely something that I'm sure that both our organisations are helping to move the needle on that.
I think there is an alternative, which is then the Chief Data Officers, but I think I would prefer the HR function to drive that. But back in our iNostix comment, I remember when I went to HR leaders back in the days before iNostix, I had my BI colleague with me and HR leaders would look and they would get like, it would go left and right and we were saying different things on how to connect, and it was a very difficult element. I think the insights about people behaviour is still a very unique perspective that HR and people analytics need to bring to the field. And we need to major in that individual organisational behaviour component and how we can improve decisions related to that.
That's why I tried to shift the conversation from data and insights to actually what is the decisions that you're supporting and can HR -- I would love HR to be able to say, "Well, this year, we helped improving 10,000 decisions, and we actually didn't help on another 500 decisions [or] we made 10 very bad decisions", but that notion of we are improving on decision-making gets us back to my bias from sports, which is, well, you mentioned a great football team in terms of they all make bad decisions as well, but they're reducing the number of bad decisions, they're increasing the number of good decisions, they're increasing the capability to make decisions. And I think the influence, the inspiration is still very valid, how to do that from an environment where you want to drive the performance standards on a continuous basis, but also more sustainable.
I think that's where sports is not comparable, because the career in sports is typically fairly short compared to a career in business. So, the sustainability angle is more important for businesses.
[0:48:28] David Green: That's a really good point. And actually, I mean, it's a good way to end our conversation, that all this data and insights that we're collecting and analysing, ultimately it's worthless if it's not actually impacting on decisions and outcomes. And as you said, it should be used to inform the decision, not be the decision. And I think that's a key thing that we're seeing companies that are doing this well, they're doing that, as you said. I'm not sure if anyone's measuring the metric on how many decisions their work impacts, but maybe it's a good one.
Yves, thanks so much for being a guest on the Digital HR Leaders podcast. I've really enjoyed the conversation. Can you let listeners know how they can keep in touch with you on social media or find out more about your work at Deloitte?
[0:49:13] Yves Van Durme: The work at Deloitte is published on websites globally in every specific country, sometimes translated to your language, so that's where it's available on Deloitte website Human Capital pages. I'm fairly active on LinkedIn; other social medias I'm not that active anymore, so you can follow me as well on LinkedIn or connect with me on LinkedIn.
[0:49:30] David Green: Perfect. Yves, thanks very much for your time and look forward to hopefully seeing you in person soon.
[0:49:36] Yves Van Durme: Likewise, thank you, David.