HR and Data: The Winning Strategy for Modern Businesses

July 4, 2023

Business Intelligence

Big data is ingrained in almost every industry and aspect of business, where it’s the principal driver guiding decisions, like understanding customers better or improving supply chains. However, one often overlooked area is Human Resources (HR). Including data and evidence in HR decisions can offer similar gains as other less people-oriented areas of your company.

Recognising the value of evidence-based HR offers demonstrated advantages. According to research by the Corporate Executive Board (CEB), companies that use data in their HR strategies see a massive 35% boost in keeping their talented employees and a 31% increase in productivity. Using data in HR can help companies spot trends, predict how their workforce will behave, and make the right calls at the right time.

Take Google’s Project Oxygen, for example. They used data analysis to deduce what makes a successful manager. The result? Better managers, top-notch team performance, and fewer employees were leaving the company.

Building a Data-Driven HR Culture

Creating a culture where data drives HR requires a strategic shift focused on three key areas: people, data, and mindset.

People:

Training HR teams to understand and interpret data is critical. They should be able to spot patterns and turn insights into action. Working with data experts can help, but it’s also essential for HR teams to get hands-on with the data. You can achieve this through specific training programs and collaborations across different groups.

Data:

Gathering, managing, and using the correct data is vital. Companies need to have a solid system for handling data. Since HR data often comes from different sources, it can take time to bring it all together. But, integrating HR data with other business data can provide a complete picture of what’s going on with the workforce.

Mindset:

Building a culture where facts outweigh gut feelings is central. HR teams should be encouraged to question assumptions, challenge the status quo, and base their decisions on concrete evidence. You may face resistance to the change, but continuous support from leadership can drive the change.

Tips for implementation

• Prioritise learning: Arrange data literacy training for HR teams. You can partner with educational institutions or online learning platforms for this.
• Improve data systems: Invest in a combined HR data management system and ensure it’s compatible with other business intelligence systems.
• Teamwork: Encourage HR and data teams to work together. Joint projects and regular communication can help to bridge the gap between these two areas.
• Lead by example: Leaders should champion data-driven decision-making and show its effectiveness.
• Share success stories: Celebrate when evidence-based HR initiatives work. This will help convince others of this approach’s value and encourage a data-driven mindset.

Why It Matters

Companies using data in their HR practices can significantly improve their talent retention and productivity. It creates an environment of continuous learning and development. Using data to guide decisions creates transparency and consistency, building employee trust.

Using data in HR isn’t just about HR – it can shape broader business decisions. For example, merging HR data with financial or customer data can provide valuable insights into how talent impacts your bottom line or how HR initiatives affect customer satisfaction.

A great example is how Microsoft’s HR team used data analytics during the COVID-19 pandemic. They used data to understand the impact of remote working on productivity and well-being. Using this knowledge, they could develop flexible working policies and well-being initiatives that worked for their employees.

Creating a data-driven HR culture is more important than ever in the increasingly competitive business environment. While it might seem daunting, the rewards are well worth it. By turning HR teams into strategic partners that use data, businesses can set themselves apart from the competition in an era where data is everything.