In the first article in this series, we looked at whether HRDs were effectively ‘flying blind’ – not using the instrumentation that HR analytics provides to effectively tell them where they are going (or at least plot a credible course for their organisation).
HR has huge amounts of people data at its fingertips, yet many organisations have been slow to use it to drive real value and gain better insights into their workforce.
According to the CIPD’s latest HR Outlook report, only 37% of HR leaders were satisfied with their analytics, and just 14% of non-HR leaders were happy with the data they were receiving from HR.
Meanwhile, Deloitte’s 2015 Global Human Capital Trends report revealed that three in four organisations believed that using people analytics was important, yet just 8% considered their business to be strong in this area.
Using workforce data in the right way can be instrumental in becoming a high-performing company, but without the right tools in place, organisations are effectively flying blind, rather than relying on the instruments that HR analytics can provide to tell them where they need to go.
Here are some steps you can take to leverage your data to better understand your workforce and add value to your organisation.
1. Have one single version of the truth
It’s essential to have one, single source of workforce data across all HR processes to ensure consistency and accuracy. Organisations come unstuck if they have different versions of data in different places.
“If an organisation’s payroll information is separate from their HR system information, they may be paying people who don’t work there,” comments Adam Hale, CEO of Fairsail. “Get one single version of the truth of workforce information, which is your master set; until you have that, it will be impossible to rely on it and really painful to bring it all together.”
You must therefore ensure your people data is integrated to other systems, such as payroll and benefits, so that you get a more comprehensive view of your workforce
2. Ask the right questions
You first need to ask yourself what problem you want to solve, to ensure you are collecting real evidence that will be of value to the business. Questions you could ask are: Who are our highest performing teams? What is our average cost of hire? What is our current attrition rate? Once you have solved those, you can start to move onto more predictive questions, such as: Which people are we likely to lose?
HR analytics is no easy task, so you may need to think about changing your hiring strategy.
Andrew Marritt, founder of OrganizationView, says it’s about trying to understand the business question, rather than the HR implications of it.
“If you have a problem with employee turnover, the question is ‘why have you got a problem with turnover’? After asking the question, focus on the data you need to understand that question; that data will come from different sources, but being able to focus on the question first is the most important.”
Alternative questions may also be hiding deep down in the data that aren’t immediately obvious, so ensure you drill down to unearth other answers to questions you may not have originally asked. It’s not always the obvious data that tells the real story, so don’t jump to conclusions or make assumptions.
3. Highlight the value of workforce data to your executive team
Leadership teams are used to relying on financial or customer information to make data-driven decisions, but it isn’t always the case when it comes to people information. In the CIPD’s HR Outlook report, just 49% of business leaders felt the data shared by HR was of strategic value, suggesting that HR still has some work to do to help executives understand the value of workforce data.
“Part of this is expectation setting,” suggests Hale. “Get the people information to the executive team; get them used to using it in the same way they use their customer and financial information.”
You also need to demonstrate to business leaders that investing in HR analytics is a business priority. The authors of the Deloitte report said: “When analytics connects directly to business issues, the argument for investment becomes more powerful to the organisation as a whole. Start with a well-known problem—be it turnover, sales productivity, or customer service quality—and start studying the people factors that drive outcomes.”
4. Mix up the HR function
HR analytics is no easy task, so you may need to think about changing your hiring strategy to bring on board those with people analytics skills, who are more numerate and systems-driven, and can study workforce behaviours.
It also helps to think like a marketer or pull on marketing expertise within your organisation.
Leadership teams are used to relying on financial or customer information to make data-driven decisions, but it isn’t always the case when it comes to people information.
“The marketing department deals primarily with qualitative data; they are able to assess and understand the behaviours, sentiment and feelings of individuals,” says Edward Houghton, research adviser - Human Capital and Metrics, at the CIPD. “So essentially, you take this methodology and use the same kind of data analysis to understand the concepts that are coming through, to appreciate how employees are feeling and behaving around certain ideas.”
5. Empower staff to own their own data
By giving your employees easy-to-use tools they can access anywhere, anytime, you actually empower them to leverage their own data and help them to be more productive. This is something that Microsoft is doing with its workforce:
It’s important to combine people information with other data sources in the organisation.
“If you give employees value by providing access to their productivity metrics, they’ll find they’re vested and energised to improve those metrics,” says Kathleen Hogan, EVP, Human Resources at Microsoft. “You’re essentially offering employees insight on the most productive aspect of their days. We’re putting the power of data in the hands of our people—literally information at their fingertips to help employees understand how they spend their time and who they spend it with, so they can make meaningful improvements.”
6. Overlay people data with other data
It’s important to combine people information with other data sources in the organisation, such as sales or customer services.
“In retail, they look to engagement scores and leadership capabilities, and can map leadership capability and engagement with customer feedback, to identify a direct correlation between the impact of the individual and their ability to sell something, and the final sale itself,” explains Houghton.
The insights derived from using your data in the right way, to make meaningful decisions, could be game-changing. By following the points above, and taking advantage of the HR technology out there, you will have the tools to seek out answers to the problems you need to solve. It’s therefore vital that organisations become accustomed to ‘flying’ with the instruments that will enable them to truly understand their workforce.
To learn the importance of data in decision-making, download HRZone and Fairsail's whitepaper 'Flying without instruments Is your organisation using data effectively?'