This article was written by Stuart Hearn. Co-Founder and Director of HR specialists PlusHR.
Data is increasingly becoming an important issue for many of today’s forward-thinking organisations. Not only is the scale and speed at which data is being generated rapidly rising, so is the variety of data points.
Companies are clearly facing an avalanche of data as technology continues to rapidly evolve. Every minute of every day across the globe, 204million emails are sent, two million Google searches made and 100,000 tweets are posted - and that’s just the tip of the iceberg.
This trend has understandably resulted in progressive HR professionals reassessing their current processes to ensure they are effectively harnessing the full potential of data not only for the benefit of employees, but also the company they work for as a whole.
Simply collecting data alone however, is not enough as it only becomes valuable when it provides actionable insight. HR teams are fast-becoming switched on to collating employee data that not only enables them to further relate to people issues and predict future staff needs, but inform strategic decisions and help develop valuable insights into the future direction of their business.
Determining data and what to collect
It is essential that HR functions have the correct fundamentals in place on which they can build upon before changing their approach to collecting, interpreting and evaluating their data. This can be achieved by: ensuring their HR strategy is aligned with the overall business strategy and KPIs, identifying the current information gaps and combining previously siloed information to provide greater insight and value.
The wealth of data that is generated and collated by HR is endless and can be typically broken down into the following:
- Human Resource Information Systems (HRIS) – standard HR or employee details such as age, gender, job, function.
- Reward data – base salary, bonus/commission earned.
- Performance and talent data – performance and potential rating, objectives set and achieved, behavioural and competency measurement.
HR data has traditionally been collected for administrative rather than evaluation purposes to fulfil the requirement to complete a task or process; with the advent of big data, this singular approach is no longer enough.
Using technology HR professionals can now ‘mine’ employee and business data to help them understand what high performance looks like, who their high-performing employees are and finally, which managers consistently manage high performing teams.
Further data analysis and insight
Going forward, HR professionals’ analytical skills and capabilities need to change so that they can use and analyse data in order to provide strategic organisational insights. While these skills may not exist immediately within the HR function, they are likely to be available elsewhere within the company. Therefore in the immediate future HR should look to deploy diverse, cross-discipline teams to build on existing big data capabilities.
HR teams may simply choose to collect HRIS, reward and performance and talent data. However, it shouldn’t stop here, this data can be consolidated and combined with some of the following:
- Finance and sales – covering areas including sales, profits and revenue achievements.
- Employee survey – has the potential to qualitatively illustrate which managers have the most engaged and motivated teams.
- Customer survey – can demonstrate which teams deliver the highest customer service and the employees that manage them.
- Email insight – contains the information required to ascertain how the best performers connect across companies, ie. high performers network with the most influential people.
It is at the point that HR starts to build and link a complete picture of individual and organisational performance that can enable an understanding of what consistently drives high performance within an organisation.
Data interpretation – what to do with the data
This wealth of data will not only enable HR to understand who, but importantly, how the best performers continue to exceed expectations. Recent industry studies have shown that organisations with a comprehensive approach to people management perform better than those without, which is indicated by higher profits per employee, higher profit margins and higher productivity.
Obtaining this level of detail enables organisations to make sure their best performers:
- Are recognised and rewarded.
- Supported in their career ambitions.
- Developed further to maximise their full potential.
- Given stretching targets and objectives to work towards.
In addition, this data will enable employers to effectively recruit against a ‘known’ profile of a high performing employee and make sure their discretionary reward expenditure is efficiently utilised.
Big data, combined with simple analytics can further enable businesses to build up a picture of their employee base and clearly establish what ‘great’ looks like, a vision they can continue to work towards for years to come.
For those who do not believe the power of an integrated approach to analysing and using HR data, a report from McKinsey in 2011, found some companies are starting to discover new ways of using HR analytics to create value.
The Bon-Ton chain of more than 280 department stores in the United States, for example, leveraged its HRIS and business data to identify attributes that made cosmetics sales reps successful. Now, it screens potential reps using a test of cognitive ability, situational judgment, initiative taking and other relevant traits. Those who score in the top half tend to sell 10 percent more product than the others and tend to enjoy their work more.
A word of caution….
The ever-increasing message from CEOs on the need for HR to be ‘evidence-based’ in their decision-making is impossible to ignore. Data and its analysis plays an important part in fulfilling this need. However, HR teams should not forget to equip themselves with the necessary skills to help them understand and interpret the data.
About Jamie Lawrence
Jamie Lawrence is editor of global online HR publication and community HRZone.com. He is committed to driving forward the HR agenda and making sure that HR directors have the knowledge and insight necessary to make HR felt across the whole organisation. He regularly speaks to audiences of 250+ and has interviewed key HR industry names, including Daniel H. Pink. He has worked previously as a small business journalist and a copywriter and has published non-fiction that reached #2 on the NYT Children's Bestseller List. In his spare time Jamie likes writing fiction, films, fitness and eating out.