Why HR Data is the Key to Strategic Business Decisions
HR analytics are critical in making the business better. Discover why HR data is the key to strategic business decision.
There will always be challenges that face HR executives and practitioners. Historically, many issues arose from lack of HR data. It used to be embarrassing. HR practitioners used to wince when they needed to justify expenses. HR analytics are now better than ever, but organizations need to properly access them, align their information with decision-making, and act accordingly.
The competitive urgency to use HR analytics isn’t new, however, in the past two years there has been an increased understanding that workforce intelligence is not just about making HR better, it’s about making the business better.
Specifically, this initiative is not just about understanding data-driven HR and the usual metrics, but specifically how HR can connect what it’s doing to business outcomes. HR should not only align with the business but drive the business by making better decisions about the workforce.
It’s about knowing and applying an in-depth understanding of organizational dynamics, based on data.
Incremental progress is being made and increasingly more companies are looking to connect their talent and business data as a single source of data truth. Only then can HR make data-driven business decisions and develop a workforce plan that optimizes talent investments while effectively monitoring recruiting, development, engagement, productivity, accountability, retention and many other workplace initiatives.
Still fighting the same challenges—and then some
A few years ago, I wrote an article titled “5 Great Challenges Ahead For HR And Leaders,” and what I said then couldn’t be truer today.
Yes, the economy improved last year; thousands of new jobs were created, company profits were bursting at their seams, the Fed increased interest rates, and there was more money to continue to drive the economy. Investment in people, training, technology should have revved up some real innovation. But did it? Did your organization take the opportunity to innovate in talent management and workforce planning strategies?
This year will likely still be challenging for leaders and HR pros with continued employee frustration over a lack of development opportunities and more. Can you believe we’re still here?
And then there’s all this data. Big Data can seem part ether, part mega-entity. As someone told me, it’s like a fog machine was left on and filled the conference room as we all sat there, stunned. The word ‘unstructured’ can strike fear in the hearts of even the most seasoned talent managers.
But it’s not a fog of data, it’s our own fog. We need to approach epic change in an epic way and be very clear about it. To really leverage human capital now, we need to turn to the data that is constantly forming, streaming, reforming. Passive and active candidates, onboarding, training, engagement, retention, attrition, performance, recognition: it can all be predicted with Big Data.
Adding HR data into the mix
The key is that we are not just gazing into a crystal ball, we’re looking with clarity, knowing that: the more information, the more time, the more data points, the more accuracy. It’s modeling and forecasting to make better business decisions on areas such as:
Turnover. This is about predicting the risk for the most turnover — in which functions, which units, which locations, and what positions, and modeling the scenarios in advance to reduce the losses.
Churn/Retention. Identify where the highest risk of churn is going to be, and who is at risk for it. Determine what resources should be turned to them in terms of retention activities and/or training.
Risk. Build realistic profiles of which candidates are at risk for leaving prematurely and when. Create models of which candidates are likely to experience a drop in their performance.
Talent. Forecast who, among new hires, are going to be the high achievers and high performers, and decide if they should be shifted into fast-track programs.
Futurecasting. Model the various changes that an organization may experience, from global to political, and what the impact of talent hiring, retention and engagement could be.
We need technology that can be used through mobile devices, and interconnected via the cloud so it’s consistent across the board, is intelligent enough to keep learning, and agile enough to refocus. And that’s exactly what predictive analytics offers: the ability to take the past and make sense of it in terms of common factors and key relationships, and to use that information not just to model and predict the future, but to make sound and insightful recommendations.
It may seem like a glaring paradox, but in data lies the future of human resources and talent management. So yes, we do need to change the culture — to one that relies on data. And then we can begin to see clearly.
A single source of truth
HR can and should drive their organization’s workforce strategy from a unified platform of meaningful data and analytics. This single source of business truth will provide critical guidance for all your talent management decisions, reinforcing the relationships among finance, operations, and all business units in your organization, and deliver the desired business results.
Yes, there are obstacles you will need to overcome.
According to one report asking companies to reveal the different people analytics adoption issues their respective organization faced, the top obstacles cited were: Data quality and availability issues, management understanding and perspective, and lack of the proper knowledge or staff.
So where do you start? You need the right people analytics partner and HR analytics solution in place that can help you overcome your obstacles, help you get to that single source of HR data truth, drive business outcomes, and improve your workforce planning — one that helps create a culture of collaborative productivity.
Although we are still facing some age-old HR challenges, it’s what’s new that is the ultimate focus and goal. There are new demands, generational changes to the workforce, tools and technologies, and a grand ability to use people analytics to drive, change and improve business. Now that’s not your grandma’s HR department. Take it all in and knock everyone’s socks off.
Ready to share powerful insights? Don’t forget to download your Five Steps to Getting Started with Workforce Analytics white paper right here.