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5 steps HR must take for data-driven working

4th Oct 2021
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Businesses of all sizes now have access to a wealth of valuable data - on their business, operations, customers and employees. Gathering that data together and interrogating it for insights, gives you the power to optimise performance and make reliable decisions rooted in historical evidence. This is data-driven working. 

This is a reality for 16 percent of large businesses, according to AI in Business, a recent report by data-science company Peak Indicators.These companies have reached an ideal data system. One where data sources from around the company are brought together and AI and advanced analytics are used to power insight, fuel collaboration and drive decisions.

For those looking to start, HR departments are naturally data-rich areas of organisations and make a great place to begin using powerful insights to improve decision making. But there are still some critical steps any organisation must consider.

#1 Building solutions for employees, not just customers

A great reason to start your data driven journey in the HR department is that it will put powerful tools at the heart of your organisation that lead to better decisions on recruitment, retention and employee development. 

But as well as improving your workforce generally, these developments need to have a direct and beneficial impact on the day-to-day work of employees. While companies tend to focus first on the customer, with a view to improving their top line, boosting the effectiveness of your employees and partners can do more for both the top and bottom line. 

Driving a direct improvement to your employees’ workflows will also help to combat the culture shock that comes with a new, data-driven approach. New developments that genuinely help workers day-to-day will go a long way towards getting them engaged. 

#2 Pushing for a basic level of data literacy in all team members

Another consideration for getting your whole team behind the push towards data driven working, is giving them the skills and training they need to thrive. Developing data literacy in all roles across the HR team promotes inclusivity and gets everyone invested in the journey.

The UK National Data Strategy defines basic data literacy as having, “some knowledge of data uses, some ability to assess the quality of data and its application and the skills to conduct basic analysis.” At this level, employees are empowered to work confidently with data and spot the significance of new insights.

#3 Whatever you do, the results must be actionable

Even if you’ve got the whole team united towards data-driven working, for any developments to make an impact, the business must be able to make decisions or take some form of action from them. 

This means that key business stakeholders must also be engaged from the off. Their involvement can ensure that the data science solutions being developed give end users the ability to act on the insights being presented and, if necessary, improve business processes. 
      
For one example, using data science to more accurately predict employee churn is of no use unless managers can actively use that information - if they are given the power to act on the insight and take measures to keep that employee on board in whatever way the situation calls for.

#4 Stress the (financial) need for data science initiatives

Of course there is a technological requirement too. Artificial intelligence will be a routine tool for most British businesses within the next five years. Already, most companies of scale are investigating how they can use AI to improve insights and productivity. 

But of the 91% of large UK businesses currently testing AI, only 38% are using the technology in everyday working. It’s evident that a gap has emerged between companies trialling, and succeeding in implementing, data science.

Yet the AI arms race continues. Firms look to move from simple AI automations to powerful machine learning projects that improve business predictions and decision making, and those that are caught in the gap risk being left behind by better equipped competitors. 

For businesses not already investing, the key to receiving corporate support is being able to quantify business problems and business cases in actual financial numbers. Cliches like, “it’ll improve our retention”, or “it will reduce our customer churn” are not enough. Instead, focus on the business cases that can be quantified in actual financial terms. For example, a report by Oxford Economics found that the costs of replacing an employee ran to more than £30,000, and that was several years ago.

#5 Analytical organisations need analytical leaders

Ultimately, the best way to be more data driven isn’t to push your employees but pull them with you as you drive from the front. This is a timeless leadership lesson and it applies to data-driven working as much as anything else. 

Senior leadership who embrace analytics and lead their company’s culture toward fact-based decision making will see their projects succeed where others fail. For HR departments looking to make a change, this is one demographic you need to have in your corner if your AI trials are to get off the ground. 

To do this, HR teams can’t let technical staff get isolated from business decision makers and should use data translators to break down the wall between developments and the business benefits they provide. Data translators are a rapidly emerging role in larger businesses that specialise in this function. 

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