Payroll is one of the biggest business costs, and yet despite an increasingly competitive marketplace, few organisations truly understand what drives the performance of their workforce.

A recent survey by HRReview found that 79% of HR professionals agreed that their organisations believed effective talent management was critical to the bottom line. However, over 50% thought their organisation should be doing more to invest in talent. This is typical of a reality in which the needs and desires of businesses are far removed from the reality of delivery.

Is data really the answer?

Data is being heralded as the new fuel for business initiatives. It has the potential both to reduce costs and improve returns by providing faster, better insights and the basis for fact based decision making. A recent report from Gartner estimates that the market for big data and analytics will generate $3.7 trillion by late 2015. Human resource professionals have an important role to play in shaping this era of the data led organisation.

Some of the best examples of data collection and analysis come from the world of sport and football. Prozone software now provides real-time player tracking and movements for over 300 clubs worldwide. German Football Club TSG Hoffenheim has gone a step further. Through a partnership with SAP, they collect and process around 7 million data points from a simple 10 minute team training session in order to suggest small tweaks players can make to improve their game.

This is an extreme version of talent management, but investing in processes and technology for collecting, cleaning and analysing data is going to be increasingly important for organisations. It is estimated that 60% of office-based employees will regularly work remotely from home by 2022. Collating and organising the right people data will be essential in creating a transparent and effective workforce which is ever more mobile and communication led.

However, getting insights from people data is not as easy a journey as many vendors, journalists and enthusiasts would have us think.

The people challenge

As I highlighted in a recent article for the Journal of Organization Design, people data is extremely messy by its very nature. Organisations evolve continuously under pressure from multiple forces:

• Corporate activities such as mergers, divestments
• Changing systems: new applications, new systems, new databases
• Changing markets: new products & services, new activities, new teams
• Changing people: skills, names, responsibilities, grades, salary, job titles (slow moving data)
• Multiple data types e.g. Qualitative vs quantitative data from employee engagement surveys
• New requirements for analysis and reporting

The result is a mess of data locked away in disparate systems and spreadsheets, full of gaps, duplicates and inaccuracies. Poor data means unclear analytics, and an absence of true actionable insights. No wonder most people don’t really know what is driving organisational performance.

Reducing the cost of being curious

If 2014 was about data for HR, 2015 will be about the ability to operationalise data processes – be that data collection, cleansing or reporting. The goal? To coin a phrase from one of our clients, “to reduce the cost of being curious”. To start answering business questions before they are even asked.

So, how do you unlock the value of your HR data, not just as a one off, but on an ongoing basis?

1. Don’t wait for the perfect system or perfect time – it will never come. Messy data is often used as an excuse, don’t let it be! After all, you have to start somewhere.
2. Visualise the data as quickly as possible. Visualising data is much more engaging than a row of tables, surfacing anomalies more quickly and facilitating an active, valuable conversation around the data and what it represents.
3. Collaborate with your finance team. HR and finance share a lot of the same data so by sitting down together you can cross check and benchmark across the business.
4. Put data back into the hand of the business. Engage those who hold the data. Give them ownership and responsibility for their data, and regular feedback so they can see their progress.
5. Connect HR inputs to business outputs. HR owns lots of inputs (recruitment, training, engagement, reward) and it has to connect them to business outcomes. Demonstrate the value your data, and more importantly your actions can add.