The advantage of creating a data-driven culture in your HR department
Unlock the benefit of making decisions based on data rather than intuition.
Elmen Lamprecht and Jaen Beelders of Cogo People and Analytics say it has become clear that the data revolution is changing organisations and industries in deep and irreversible ways.
Data has now become the world’s most precious commodity and the most critical factor in business decision-making. Many organisations have turned to data analytics to better understand their customers, employees and business operations, and this trend is still rising.
However, despite having access to an exponential growing volume of data, organisations often struggle to use it to its full potential, primarily due to an absence of a strong data culture. The all-pervasive reality of data analytics in modern organisations means that a healthy data culture is becoming increasingly important.
Building a data-driven culture within HR should be considered a critical and immediate objective, laying the foundation for further analytics advancements. A data culture is one where decisions are based on data rather than intuition and the value of data is recognised and respected in business decision-making. Developing a data culture in HR can be daunting due to skills gaps and psychological resistance, but the impact on the organisation as a whole is more than worth it.
We recommend HR leaders look at the following when developing a data culture within their organisation:
- Data-driven culture starts at the (very) top, at director and C-suite level. Organisations with strong data cultures tend to have executives who set an expectation that decisions must be founded on data – that this is expected for all business decisions without exceptions. Executives and senior management need to be considered the data culture catalysts and should place a significant amount of respect on data capturing and analysis by acknowledging the value of the employees working at the coalface of data capturing.
- Include master data management as a departmental key performance area. Promoting a data culture within an organisation involves changing people’s behaviour when they work with data. One of the most effective tools an organisation can use to promote change is to incentivise the desired behaviour. Include “master data management” as part of departmental managers’ KPIs. This will measure the effectiveness and accuracy of data processes in business operations. In HR, these processes include accuracy and comprehensiveness of new data created in every process, from creating new candidates during the recruitment process to creating new employees in the onboarding and payroll process, to enhancing employee data during training, engagement and labour relations processes.
- Drive buy-in through campaigns highlighting the value, risk and opportunities with data. Educate employees on what is possible with data and systems and make it an exciting prospect. Data might be seen as a boring part of business, but your HR team must be excited about the possibilities presented by using data optimally. Announce rewards for most innovative use and findings from data.
- Empower every HR employee with the skills to confidently analyse their own data (even if at the most basic level). Although your organisation might have specialist data analysts, do not expect them to work with data on a daily basis without the assistance of HR. Building a data culture requires everyone to feel comfortable around data analysis and using data in their daily responsibilities. Hosting quarterly training boot camps to emphasise the innovative use of data will go a long way in making your HR Team comfortable with the use of data. However, we suggest providing specialised training on-demand and just-in-time. Many organisations have wasted resources on “big bang” training efforts, only for employees to forget what they’ve learned if they don’t put it to use right away.
- HR reporting should be a collaborative effort and not siloed within departments. To fully benefit from a collaborative data journey, the various HR departments should identify cross-functional metrics that break down interdepartmental barriers. Additionally, a cross-functional body can be created that convenes quarterly and discusses the metrics being reported by every department and how they fit into the overall HR metrics. Lastly, the various HR functions should develop their own advanced people analytics that measure their impact on the overall HR strategy and institutional strategy.
- The last factor is a more technical point that HR needs to drive in close collaboration with the ICT department. By far the most common constraint we find is that people in different HR departments struggle to obtain even the most basic data. Starved of information, HR professionals don’t do a great deal of analysis, and it’s nearly impossible for a data culture to take root, let alone flourish. Therefore, HR needs to fix basic data-access issues quickly. Work with ICT to integrate HR systems, ensure that HR data is never stored only on laptops and work diligently to provide access to HR data to everyone who requires it.