Stuck in first gear: how can HR make more of people data?

HR stuck in first gear with people analytics
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People analytics has been the ‘next big thing’ for HR for well over twenty years, but the profession is still struggling to make the most of the people data it collects. Is a crisis of confidence holding the profession back? And what does HR need to do to make people analytics ‘business as usual’ and truly deliver value?

With ever increasing amounts of data potentially available to the HR profession, people analytics offers an exciting opportunity to improve decision making and even enhance business performance. However, progress is slow, and rather than feel excited about the opportunity, the task can seem overwhelming for many people professionals.

Slowly though, things are changing. And 2018 has undoubtedly been a big year for people data. Gender pay gap reporting was a massive wake-up call for many who had previously not invested in people analytics or taken any significant steps to report on data and practices to either an internal or external audience.

GDPR also made many HR teams stop and take stock of how they store, use and report people data.

Data quality and trust are key. Without them, people data is unlikely to be picked up by business colleagues.

Interest in workforce data from both inside and outside of organisations is definitely growing, and we can only expect this momentum to continue now that the interest of government, investors and potential employees has been firmly roused.

As a profession, we need to be ready for this. But people analytics and reporting shouldn’t be treated as an ‘ask’ of the profession or something that we respond to, based on demand.

It’s an agenda we should be driving, to enable far more effective decision making and to grow the reputation of HR as a business-critical function.

A crisis of confidence?

Unsurprisingly, tech firms are leading the way by investing in capability and fostering strong ‘people analytics cultures’ where conversations about data are the norm, and people and reporting is expected and actively encouraged in decision making.

Where this is happening, business performance is often higher too as shown in our latest research. The CIPD’s recent global study of people analytics, in association with Workday, also found that when it comes to achieving high quality outcomes from people analytics, confidence – or lack of it – is a critical factor.

Confidence and capability can only come through practice and regular interaction with data.

The global study found that in the UK only 21% of HR professionals said they were confident conducting more advanced analytics, whilst in South-East Asia, the number was much higher at 46%.

Confidence isn’t just having an impact at the advanced level – almost a quarter (24%) of HR professionals in the UK aren’t confident calculating basic figures, such as mean and median, from their data. This is a real risk in organisations that are increasingly data driven.

A key issue is that people analytics has long been seen as a niche HR practice, and all too often the task of the only HR professional in the office who once said that they don’t mind using Excel.

Many HR functions haven’t been developed with data and analytics at a strategic level in mind, but information for that level, and interest in data from that level of the business, is vital to change current practice.

Embedding analytics into routine HR

Confidence and capability can only come through practice and regular interaction with data.

Simply dipping a toe in the water once or twice year in order to fulfil a requirement such as gender pay gap reporting will do little to boost people professionals understanding and ability when it comes to data capture, analysis and reporting.

Rather than a ‘bolt-on’, people analytics needs to be a regular activity for people professionals. We need to see a greater mix of push and pull activity where HR is responding to company queries, whilst also proactively providing data to support decision making and strategic objectives.

Reputation is everything

Using people data for HR issues is one thing, but tackling business issues is where people analytics can really add value. Our study showed that only 53% of non-HR professionals globally are using the people data accessible to them to make decisions.

Data quality and trust are key. Without them, people data is unlikely to be picked up by business colleagues. However, because people analytics has had an unsteady start in many organisations, trust can be low.

This is having a real impact on non-HR views of the function and its ability to create meaningful data.

HR is in an exciting position to take charge of the people analytics phenomenon and invest now to build its capability and skills.

Our research shows that HR is currently not perceived to be data savvy by its key stakeholders. Just 36% of finance professionals believe HR has demonstrable statistical skills, and only 37% see HR as people data experts.

While there is clearly some work to be done to build trust in people data, the first step is to simply start making people analytics a part of everyday practice.

Once this is achieved, confidence and quality won’t be far behind and organisations can quite quickly realise the benefits of having a more analytical, evidence-based approach to their people practices.

How to take your people analytics to the next level

By taking a few simple steps HR can build confidence in itself, and develop its reputation as an evidence-based and outcomes-driven profession.

Focusing on the following five areas can bring quick wins, and help to deliver long-term success:

1. Normalise it

Make people analytics a regular activity, think about the metrics that matter most to the business and start exploring them. Find ways to build analytics into daily decision making by encouraging its use and showcasing good-practice examples.

2. Share it

Measurement has no value if it’s not analysed, reported and shared across the business and potentially beyond.

We’ve seen from gender pay gap reporting the power that external reporting can have, and we expect more people data to be requested by regulators and key stakeholders. Companies should embrace the impetus of external reporting and use it as a way to promote and normalise people analytics in their organisation.

3. Invest in it

Too often it’s a case of ‘the cobbler’s children’ when it comes to HR investing in its own skills, and there needs to be greater investment in analytics skills and supporting technology.

This can include buying in talent from data-driven functions like marketing, to share knowledge and build HR capability.

4. Outsource it

It may take time to build skills, or you may have largely sufficient in-house skills but need support for more advanced analytics. HR doesn’t have to do it all, there may be opportunities to outsource some of the more advanced analytics to an external provider, or even to other analytical departments within the business.

5. Talk about it

Create a common language so people data can be easily communicated and understood across functions and throughout the different levels of the business.

Encouraging non-HR leaders to share the impact and outcomes of using people data can help build momentum and demonstrate value.

People analytics holds a lot of promise, not just for HR but for organisations struggling to understand what makes their workforce tick.

HR is in an exciting position to take charge of the people analytics phenomenon and invest now to build its capability and skills. Then when the business inevitably comes calling, HR will be ready.

 

About Edward Houghton

Edward Houghton Image

Edward Houghton is the CIPD's Research Advisor for Human Capital Metrics and Standards.  Since joining the institute in 2013 he has been responsible for leading the organisation's human capital research work stream exploring various aspects of human capital management, theory and practice; including the measurement and evaluation of the skills and knowledge of the workforce. He has a particular interest in the role of human capital in driving economic productivity, innovation and corporate social responsibility. Recent publications have included “A duty to care? Evidence of the importance of organisational culture to effective governance and leadership” for the Financial Reporting Council’s Culture Coalition, and “A new approach to line manager mental well-being training in banks” an independent evaluation of the Bank Workers Charity and Mind partnership to deliver mental health awareness training in the UK financial services sector.

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