Turning Insight Into Action: How to Use Data in HR Processes
Article provided by Culture Shift
July 22 2021 - Using data to make better decisions is common practice within business spheres. Companies look at their performance metrics, analytics, finances - anything that can give them more insight into how they’re doing and what they can improve.
But what about HR? It can be common practice for executives to focus on efficiency metrics or how much ROI is being captured, but when you question the number of HR departments utilising data to improve their impact, the number is surprisingly low.
Using data helps HR to make better decisions. Whether it regards questions on recruitment practices, company policy, culture or employee wellbeing, there’s always something to track that can provide actionable insights.
- Why data is crucial for HR
- How to use data in HR
- Ensuring equality through data
- Going past bureaucracy
Why data is crucial for HR
HR is privy to massive amounts of usable data. Productivity data, absenteeism numbers, career progression, recruitment data, employee engagement and satisfaction rates… the list goes on. Not only are HR teams across the country beginning to understand the power of data, but also how to get hold of and organise data more efficiently than ever before.
But why is this data crucial? Because, collating it and then using it to provide actionable insight regarding decision-making creates value for a business. Leaders can be more comfortable that the right action is being taken, and the optimisation of processes benefits employees, who are happier and more satisfied with their experience at work.
Through using data, companies can:
- Create predictions on when employees will require raises, promotions or even when they will decide to leave
- Understand and plan to address diversity gaps in their talent pool
- Identify how to improve employee engagement and satisfaction over time
Now is the time of ‘intelligent HR’ that is data-driven and uses analytics to capture the goal of adding value and driving optimisation across all facets of a business.
As the ability to collate and inspect data increases, so does the opportunities for growth afforded to HR departments.
How to use data in HR
The makeup of your business should determine how you collate and interpret data. For example, you may have an entire employee population that work in similar environments, with equal sized teams, or your employee base may be split between offices, stores or factories. This will all impact the best ways to gather and interpret data.
A simple assumption is that HR departments should look to identify ratios and trends regarding key metrics such as:
- Employee satisfaction per quarter
- Employee turnover
What organisations deem worthy to track is up to them, but the focus should be on metrics that support strategic goals, that contribute to change initiatives or directly address the specifics of a well-known and reported problem.
The focus should also be on how data tracking and analysing can be used to improve the working conditions of those in minority groups, such as women, disabled employees or those of a minority ethnic group.
Use data as the first point of inquiry when drilling down into problems. For example, an organisation may have a widely diverse employee base, but could be vastly underrepresented by leaders from minority ethnic backgrounds at a management level . In this instance, providing training to middle management staff to support a move into a senior role, over external hiring could be an effective solution to a problem that was identified by data analysis.
This approach can help determine what seem like problems at first sight, but are actually only symptoms of issues that lie under the surface. The outcomes may call for you to reprioritise the annual budget, a conversation that would need to be taken to senior leaders, and would be strengthened if shared alongside insightful data.
Ensuring equality through data
Ensuring equality is a continuous project for HR departments. The number of businesses addressing their equality data is rising. For example, in 2018, only 5% of businesses calculated their ethnicity pay gap. In 2020, this had risen to 23%, which is an encouraging sign of businesses beginning to tackle racial inequality.
People have the potential of being affected by up to 200 types of cognitive bias in their decision-making processes. These biases make up a lot of what impacts equality within a business. So how can data help?
Data can lead to fairer decision-making by eliminating subjective readings of situations, such as performance or employee satisfaction. When combined with analytics platforms, there’s even the potential to identify and remove some of those implicit biases everyone experiences.
While there’s no way of fully eliminating these biases, through data use, the chance of them occurring reduces alongside the potential harm they may invoke.
What HR departments need to remember is technology and data use won’t fully guarantee improved decision-making, especially when it comes to inequality within the workplace. However, a simple lack of a guarantee shouldn’t hold teams back from leveraging the very obvious benefits that come with tech.
Organisations should keep up-to-date with new technologies and how data can be used and interpreted, as there’s a constantly evolving marketplace of solutions and ideas out there waiting to be used.
Going past bureaucracy
Bureaucracy can provide clarity and a systematic approach to business that removes the opportunity for two employees to face differing treatment. However, too much of it and companies can risk creating unnecessary complexity and barriers. This is a common problem for both large and growing companies who have big infrastructures that unintentionally remove the humanity from HR.
The bureaucracy of HR might be seen in an overload of questionnaires, or general inefficiencies in how issues are managed, with a distinct lack of productive conversation that could help to streamline and resolve problems.
Data use can contribute to this, when HR teams get too bogged down in the numbers and a sole focus on what the numbers are telling you to do HR departments need to commit to ensuring data is coupled with a qualitative understanding of the situation being shown in the data. Together this should define the application uses of HR data and result in more effective action.
Data analytics isn’t a replacement for human judgement, rather it’s a supplement. Data increases visibility over a subject and lessens the presence of bias, but this doesn’t mean human-driven decisions should be done away with.
The question should be; How can humans and data best work together? A good example of this is called 'human-in-the-loop' decision making, where data provides options and recommendations, then humans can choose to question, verify or accept those options. Maintaining the human element of decision making is important in decisions that impact people, and it’s important to remember that there are real employees behind the numbers.
Whether it’s ensuring equality in race, age or gender, or developing performance, capturing fairness and visibility is always the right step. Data use helps organisations to define what fairness means to them, incorporate it into policy and better collaborate with the groups that need the most help.
With the right platform, you can gain actionable insights to improve your HR processes by identifying patterns of behaviour through real-time reporting. With real-time data and in-depth metrics, you can get a deeper understanding of what’s happening in your organisation by filtering, segmenting and comparing data.