Building a Data-Driven HR Function That Delivers Results

According to Gartner, organizations that harness the power of big data and analytics are expected to see a 15% increase in productivity. Meanwhile, 78% of CHROs say their organizations rely on talent data to make decisions.

Despite a growing recognition of the importance of data-driven HR, HR teams still struggle to translate data into actionable insights that drive meaningful business outcomes. 

That’s not really that surprising. After all, most HR pros didn’t go into the field because they were enamored with numbers and data. They went into the field because they cared about people.

Now, we're going through a big shift toward data-driven HR as new tools have emerged to allow for real-time, deep-dive data that can drive analysis and improve decision-making.

The shift, though, is fundamentally changing how organizations understand, manage, and optimize their most valuable asset: their people.

What does data-driven HR mean?

Data-driven HR involves using data to make HR-related decisions. These decisions encompass the entire employee life cycle, from talent acquisition and hiring to retention strategies, compensation and benefits, and beyond.

Data-driven HR takes decision-making beyond personal opinions and gut feelings, applying advanced analytics to identify patterns, predict trends, and drive strategies that improve both the employee experience and ROI.

This involves everything from the basics (like reporting on headcount and turnover metrics) to the use of sophisticated predictive analytics that can be used to predict which employees are most likely to leave.

What’s required to achieve maximum impact from this data-driven transformation, though, is relying not on isolated metrics, but on interconnected and strategically aligned data inputs that reveal a more comprehensive story of workforce dynamics, engagement drivers, and business impact.

Let's explore these.

Key HR metrics and KPIs to track

Building a data-driven HR function starts with identifying the right metrics to track. The most impactful people organizations focus on metrics that directly connect people outcomes to business results:

• Core workforce metrics include headcount, turnover rates, time-to-fill rates, and employee tenure. These give you a baseline understanding of workforce health and the effectiveness of talent acquisition efforts.

• Employee engagement and retention indicators include employee satisfaction scores, engagement survey results, voluntary turnover rates by department, and retention rates for high performers. Job security has become the top reason for staying in a job (39%), followed by work-life balance (34%), and relationships with colleagues (33%).

• Performance and productivity metrics are tied to both individual and team performance ratings, goal achievement rates, training completion rates, and productivity metrics aligned with business strategies and objectives.

• Diversity, equity, and inclusion (DEI) metrics help you monitor the demographic makeup of your workforce, pay equity ratios, promotion rates by group, and inclusion survey scores.

The key lies in selecting metrics that not only provide insight into HR processes but also demonstrate clear connections to organizational goals and outcomes.

Your new technology stack: Dashboards and people analytics platforms

Modern data-driven HR functions rely on integrated technology solutions that can collect, analyze, and visualize workforce data effectively. The best technology stack typically includes a number of important elements that provide a detailed view of people's impact:

Data integration platforms are the foundation of the technology stack. They connect various HR systems, and other systems across the enterprise that might include payroll platforms, performance management tools, and even financial systems to create a unified view of people and organizational data—and to help identify the correlations between people and business outcomes.

Analytics and visualization tools help to convey overwhelming numbers and charts into easy-to-digest information, accessible even to those with minimal analytics skills. These tools include interactive dashboards, trend analysis, and predictive modeling. The biggest value of HR analytics and data visualization tools is how they help HR teams move beyond basic reporting to sophisticated analysis that can predict future workforce needs and risks. Plus, they support quickly communicating key metrics with stakeholders.

Self-service analytics capabilities democratize data access. No longer must managers wait for IT departments or data analysts to produce reports. With today's data being easy to access from anywhere, you'll save time and money. This can extend the reach and impact of your key metrics to help you make more informed decisions.

Mobile and cloud-based solutions allow data to be accessible from anywhere at any time. This supports remote or hybrid work and also drives better real-time decision-making across distributed teams.

Technology stacks aren’t meant to replace your existing systems. Instead, you'll want to use them as part of your current process to get more flexibility to meet the varied needs of your organization. 

Again, it’s not technology alone that can drive better data-driven decisions. You should also focus on building a data-driven culture, especially within your people team.

Developing a data-driven culture in HR

Building and supporting a strong data-driven culture is a process, not an event. 

It requires ongoing attention to the needs of employees in terms of education, upskilling, and reskilling, and communication to build understanding. Doing this ensures that evidence-based decision-making is embraced at all levels. 

Here's how:

• Leadership commitment is key to driving a data-driven culture. When your C-suite and HR leaders consistently reference data in strategic discussions and key decisions, analytical thinking is boosted across the organization.

• Ongoing skills development and training ensure HR team members have the current capabilities needed to work effectively with data. Today’s technology requires ongoing attention to both technical and critical thinking skills. Employees need these to identify the data needed to answer questions, interpret data correctly, and ask the right questions to help you meet your business objectives.

• Data governance and ethics establish clear guidelines for how workforce data should be collected, stored, and used. This reunites privacy considerations, ensuring data quality and helping you address potential biases in how you collect or analyze data.

• Change management efforts support the transition from intuition-based to evidence-based decision-making. Make sure your stakeholders understand the value of your data-driven approaches and give your staff the support, resources, and coaching they need to adopt new ways of working.

• Collaborative processes break down silos between HR and other business functions, ensuring workforce insights inform broader organizational strategy and vice versa. Data analysis doesn’t occur in a vacuum or silos. Cross-functional analysis and discussion can be a powerful way to build and sustain a data-driven culture.

Creating and nurturing a data-driven culture in HR requires ongoing attention and support, along with training, development, and upskilling/reskilling to ensure employee readiness.

How analytics support HR transformation

Visier’s customers have achieved success in various ways and frequently share their success stories, real-world insights, and achievements. Here are some of the ways in which they won to inspire your next move:

• A global retailer transformed sales growth by linking employee productivity to sales performance data. Using real-time insights, predictive modeling, and AI-driven analytics, the company was able to optimize staffing, improve sales conversion rates, and reduce turnover.

• An auto club group was experiencing business disruption due to high turnover. Without the predictive visibility required to anticipate and prevent talent-related disruptions that could impact service delivery and operational performance, they needed a solution that could provide the data and insights necessary to protect key business functions from talent risks. They then turned to Visier.

• A technology organization used people analytics to identify specific turnover patterns, discovering that their highest-performing software developers in Krakow, Poland, were leaving at concerning rates. Taking a deeper look at the data helped them identify root causes. They were then able to implement targeted interventions, reducing undesired attrition from 9% to 7.5%.

• Another organization used workforce analytics to transform its talent acquisition process: “What traditionally required extensive consulting efforts over the years is now achievable within moments through Visier.”

• Another client noted that Visier’s granularity of analysis allowed them to “dig down as deep as we want to in an organization to really understand the pockets of where something's happening, not just the big picture.” They used this in-depth analysis to identify areas where retention strategies needed to be refined and strengthened.

• One enterprise customer shared: “With Visier, we've reduced turnover and improved hiring quality. But the biggest impact is that it gives our HR team license to drive strategic conversations with business leaders.”

These are just a few examples of how Visier clients got their desired results through a proactive and strategic use of data to drive HR-related decisions.

Getting started: Training, pilot programs, and executive buy-in

When building a data-driven HR function, it’s important to balance quick wins (like implementing automated turnover reporting by department or tracking monthly employee engagement scores) with long-term capability building, like predictive analytics that could help you find areas at risk of turnover. Making this shift requires these strategic efforts:

Enlist and ensure executive sponsorship

Senior leaders drive change. Getting their support in showing how data-driven HR initiatives align with business objectives to achieve real results can send a strong message to all staff members. Your HR team can then partner with the C-suite to present specific examples of how workforce analytics will address organizational challenges/opportunities.

Start with your high-impact use cases

Demonstrating success can support data-driven decision making and its potential for major impact (like reducing voluntary turnover in critical roles or improving hiring success rates). Focused initiatives and their results build confidence in these data-driven approaches.

Invest in foundational capabilities

These should include the development of a strong data infrastructure, analytical tools, and skills development. A proactive approach can help yield results. As McKinsey points out, although almost all companies have invested in AI, only 1% believe they’re at their maturity in using these tools.

Implement pilot programs

Pilot programs can demonstrate quick wins that capture the attention of managers and staff and help you identify new use case opportunities. When they're successful, you're ready to roll these programs out organization-wide.

Create feedback loops

Data democratization requires ongoing conversations, feedback, and sharing best practices/challenges. You can use these inputs to improve data collection, analysis, and applications based on both user experience and business impact.

Build change management support

Whenever you identify a new opportunity, prioritize helping stakeholders understand and adopt new data-driven approaches to HR decision-making.

Frequently asked questions

What is data-driven HR? 

Data-driven HR refers to using workforce analytics and metrics as a base for your human resources decisions, from hiring and performance management to retention strategies and organizational design. It replaces intuition-based decision-making with evidence-based approaches that improve both employee experience and business outcomes.

How do you foster an analytical HR culture? 

Creating an analytical culture requires leadership commitment, skills development, clear data governance, and change management support. It involves democratizing data access, celebrating evidence-based decision-making, and providing the tools and training needed for HR professionals to work effectively with workforce data.

Which tools help HR become more data-driven? 

HR teams today use platforms that combine data integration, analytics, and visualization capabilities. Offering self-service, on-demand access to key workforce insights boosts their use. As skill and comfort levels increase, advanced tools like predictive analytics and machine learning drive decision-making as data governance and security standards remain top priority.