It can feel like preparing for a trip up Mount Everest.
Along with gaining buy-in from people at all levels, turning your HR function into a well-oiled fact-based decision-making machine will require you to attain both some new hard and soft skills.
And yet, research supports that championing a data-driven HR culture is well worth the effort. In recent years it has become common knowledge that proactively using data to make fact-based decisions is key: “Our experience has found that data-driven, analytical HR departments are more likely to play a strategic role in their organizations, and the survey data supports this,” states a recent Boston Consulting Group report on HR excellence.
Here are four steps that you can take as an HR leader to guide teams towards a data-driven culture and turbocharge your HR impact:
Step 1: Ask questions — a lot of questions
Before you launch into the process of datafication, you need to revisit your organization’s main business priorities, and how talent supports those priorities. To identify those, you need to ask yourself and your colleagues some key questions. Grab a pen and paper and ask:
- Who is the customer?
- What problem do we solve for them?
- Who is the competition?
Once you have defined the main business goals, you need to apply your unique value as a provider of human resource expertise, and then ask this question:
- How does our talent impact those business goals?
To take this one step further and add a datafication element, ask:
- What do we need to measure, track and predict to focus on improving business outcomes?
Take recruiting concerns, for example. Let’s say your organization is having a hard time recruiting the right talent to remain competitive. You can demonstrate to the CEO and your hiring managers that — by using data to understand the bottlenecks in the hiring process, which recruiting sources are the best, and which candidates succeed — you can help your company stay ahead of the competition for talent.
At the end of the day, you are in a much better position to gain support for a data-driven HR culture if you find a business problem, engage the people who care about it, work with them to understand, and develop a solution for monitoring and measuring results.
Step 2: Demand action, not perfection
Once you have gained buy-in from leadership and relevant team members, and understand what kind of questions you need to answer with data, the key is to get moving.
Many of my past 10 years in the analytics space were spent working with companies who were rolling out dashboarding projects. A common approach was for IT to sit down with the business and gather all its requirements and then spend six months delivering exactly what the business requested. In nearly all those cases, the business users were completely unhappy with what they got. Despite all the care and effort, these projects were seen as a failure.
The reason for the failure was two-fold: First, after waiting six months, people’s expectations and requirements had evolved. Once the individuals who use the information had access to it, they realized they had many more, new or different questions which the solution could not answer.
Companies who instead delivered early and often, and were able to adjust the results based on feedback, experienced greater success and adoption — even if the data was not 100% perfect.
Rather than focus on waiting for data accuracy and completeness, it is important support a program that will deliver early and often and works with the decision makers to evolve the solution and data on an on-going basis.
Step 3: Consider diverse information needs
It is important to avoid a one-size-fits-all approach to data access. For example, if you are in a leadership role, you need the capability to answer new and comprehensive questions and consider key actions. But your HR generalists and line of business managers will need quick access to key data points.
I once worked with a retail vendor who wanted to provide analytics to their store managers and staff so they can see how much they sold of a certain product and compare that to some internal goals. At the time I was new to and — possibly — overly passionate about analytics. I believed that if the experience was easy and compelling, the organization would want all their users to access the full analytics tool. But that retailer pointed out that — while they may have very analytic savvy staff — their primary job was to be on the floor selling products and not exploring the analytics.
Just like a retail team, your HR generalists need to be empowered with information, but not so overloaded with data that it interferes with their day-to-day interactions with the lines of business. Any extraneous data is just an interesting distraction.
Step 4: Evaluate your data
Moving towards more fact-based decisions is not just about having the data, but also having the skills to evaluate it.
As Mark Battersby (a professor of critical thinking and scientific reasoning at Capilano University) writes in Is that a Fact?, a guide to thinking critically about scientific and statistical information: “[An organization] who can’t evaluate statistical and scientific claims is like someone lost in the forest amidst a natural abundance of food but lacking the knowledge to distinguish edible plants from the poisonous ones.”
For you, as an HR leader, this is about your team understanding the basics of data analysis. While you don’t need to become experts in logistic regression, it can be useful to know key concepts, such as the difference between causation and correlation: just because two things are happening at the same time, it doesn’t mean one causes the other.
You should also consider making data literacy training a key component of development programs for you, your HR business partners, as well as line managers.
To get started, here is a collection of the best articles, papers and other resources to help with HR analysis vetted by our in-house people analytics expert, Ian Cook — it includes everything from math videos to metrics definitions.
From Operational to Strategic
HR is traditionally viewed as being an operational discipline. It’s this kind of perception that has led some to call for the splitting of HR into two functions (one that focuses on the day-to-day administrative function, and another that focuses on more strategic tasks).
By championing a data-driven culture, you can elevate HR’s business value as a strategic player. If you ask the right questions and focus on action, a data-driven culture can be within your reach.
With a solid team focused on a single goal, reaching the peak of that mountain can be an attainable — and not impossible — goal.