5 steps to help your business assess HR data
More and more HR departments are eagerly joining the ‘big data’ party (1) but according to analyst Josh Bersin (2), more than 50% of companies are still assessing the value of the data they have. Certainly a new challenge seems to have emerged for businesses: What’s the most effective way to use our data?
5 steps to better assessing your data
Getting started can be daunting, so here are five steps you can take to help you assess how your HR data is going to contribute to your company’s strategic business discussions:
1. Understand your data sources — The more we work with clients to cull and compile data, the more we see them emphasising this notion of “putting trust in the data.” Traditionally, many businesses have relied on data that’s originated from outside their organisation, such as market or industry benchmarking data or survey data. Recently, companies are asking themselves questions like: Where does the data come from? What does it include? What doesn’t it include? Our experience has revealed that the more trust HR leaders have in their data, and the more familiar they are with its value and limitations, the easier it is for them to figure out how to use it effectively to contribute to business success.
2. Forge a relationship with the CFO — Ernst & Young (EY) has extensively researched the relationship between Finance and HR – and reports that for companies “to perform effectively and grow over the long term, close collaboration between finance and HR is becoming increasingly important.” They suggest making the relationship a priority so the two functions remain aligned and can jointly contribute to strategic business decisions. This article from the Economist Intelligence Unit and ADP shares how CFOs are helping their businesses view their workforce as an engine of innovation, rather than a cost to be managed.
3. Ask the right questions — It doesn’t matter how much data you have if you’re not sure what business strategy it supports. So, maybe the first question you need to ask your business partners is what business issue/challenge/question are you trying to solve with workforce data? If you first determine the business questions that need to be answered, you can use existing data or build the data model you need to address them.
4. Put workforce data into perspective — Data is one element in the decision-making process and should complement other resources being used to support any business case. For example, payroll data that provides insights about employee fraud could be reviewed in conjunction with feedback from business leaders about time capture challenges – and can then together help drive an improved business outcome which results in cost savings.
5. Keep the “Human” in Human Resources — At the end of the day, HR decisions are still about people and there are certain factors that can’t be quantified. Data analytics can be a useful guide and valuable contributor to business decisions, but it pays to remember the distinction between data-informed decisions and the myth that analytics will tell you what to do. There’s a human element that must be retained and exercised even when using tools, such as benchmarks and predictive analytics.
HR data can be of real value when making critical business decisions – especially if you know how to identify, gather and use the insights.
Written by: Connect@ADP Team