In our experience, most HR decisions are made, at best, with the gut and, at worst, with emotion.
Using HR data, on the other hand, means that better objective decisions are possible, decisions that make employees happier and increase their productivity, as well as increase your business’ profitability.
It’s a bit ironic, because most businesses use data for better decision-making elsewhere, such as in their marketing, sales and operations but few use data when it comes to people, their only true asset.
Why hasn’t HR traditionally been good at using data?
There’s not a lack of data. There’s data on a whole raft of stuff: absenteeism, staff turnover, people productivity, and the like, whilst many businesses now carry out staff engagement surveys or, what’s termed, pulse surveys.
Despite having access to a wealth of data, in my experience, too many business owners or their HR people spend the majority of their time on HR admin tasks or compliance issues. Plus, there’s the issue that HR is traditionally seen as very people-orientated, and not so much about numbers and data.
Even when data is being used, it’s often not being used in a smart way. A lot of HR data analysis comes in the form of stand-alone measures – and not about understanding the root causes or reasons behind the KPI. Only by measuring and then understanding the root cause can something be done about it – whether that’s to reduced absenteeism or staff turnover, or to improve people productivity.
How do I make HR data-driven?
Truly intelligent or data-driven HR focuses HR data and analytics on the goal of adding value and driving performance across the organization – all the time, not just every now and then or on specific projects.
You become HR data-driven when you use data to:
- make better HR decisions
- better understand and evaluate the business impact of your HR practices
- improve the leadership’s decision making in people-related matters
- make your operations more efficient and effective
- improve the overall wellbeing and effectiveness of the company’s employees.
Yes, having a data-driven approach can achieve all of this. And when you do all of this, it starts to have a huge impact on a company’s ability to achieve its business goals. It’s that’s what makes HR data so valuable.
But what data and data model should you use and why?
There’s a saying, “if you can’t measure it, you can’t manage it”. And that’s the thing, very few businesses measure their people – and, more specifically, the impact that their people practices have on their business goals.
What if you had the analytics on the effect of your HR practices on staff attraction, retention and development, and, in turn, the impact on your performance? And, as a result, you could make better decisions to overcome the people issues holding you back from achieving your objectives.
The key, for us, is to understand the causation between your HR practices, people engagement and business results. Because, if you then improve your HR practices it improves your employees’ engagement and happiness; in turn, this leads to higher performance and increased profitability. There’s a causal effect.
How do I start?
Start by measuring your HR practices – or in other words your employee experience. What is an employee experience?
The employee experience is defined as the cumulative assessment of an employee’s interaction with your company and its people,” says Julian Lute, senior strategic advisor at Great Place To Work.
The quality and fitness of your HR practices define your employee’s experience.
What this means is that you need to measure your employee experience through assessing the quality of every HR touchpoint your employees have with your business, from job candidacy through to on-boarding, performance management and training, through to exit.
At Wright People HR, we built a nice piece of software from which to do this.
How do I use data to make better HR decisions?
A lot of HR data capture models focus solely on employee engagement. However, this is not even half the story, it’s only a third. The other two-thirds? You must look at – and measure – the causes of that engagement, your HR practices – or your employee experience.
Equally, you must identify – and measure – the impact of that engagement on achieving your goals. Only then are you able to examine and analyse the causation to make smart HR decisions. And our data-led model does exactly that.
If you’re not hitting your business goals, you can identify what changes and improvements are needed to your employee experience – to improve your engagement levels and, in turn, performance. The same is the case, if you’re already hitting your goals but want to boost performance for your business. People are the main cause of your performance, so you need to be clear on what you need to do to deliver a better experience to increase engagement and productivity and, thus, lift performance.
Sounds good in theory, but can you give me an example?
Take Google’s approach to people management, as a quick example. Google gives staff free meals, generous paid holiday allowances, access to ‘nap pods’ for snoozing during the day, and space to grow their own fruit and vegetables at work. Why? It’s not because Google’s leadership team feel all warm and fuzzy about their staff. These policies and decisions were based on what the data told Google would increase employee satisfaction. And the value to the company? While staff turnover is consistently high in the tech world, Google hangs on to employees.
We’re not Google. What about normal, small and medium businesses?
Our own data-led model has been specially developed for small and medium businesses.
A typical scenario example with many companies with which we work is that costly high staff turnover is having a detrimental impact on productivity.
When we analyse the staff engagement factors here, those businesses generally score low in “Recognition”(praising and valuing staff), “Development” (growing and stretching their team) and “Accountability” (offering feedback on performance and how to improve).
Fixing these issues in the employee experience, will improve people’s engagement and performance,
Should HR be more about data than people?
We’re certainly not saying that HR should only be about data. People will continue to be a central driver of success, even in this age of increasing automation, robotics and artificial intelligence. What we are saying is the role of HR is changing and, as our ability to gather and analyse ever-increasing amounts of data grows, so too do the opportunities for business owners and / or their HR professionals to add more value to the organisation by using data. This is what makes HR data such an important asset.