Why are HR data and insights so important to a business?
HR data is being used to turn human behaviour into a more quantifiable science. In the same way that Facebook, Instagram, Snapchat etc. offer new opportunities for businesses to understand how human beings think and act as consumers, new HR tools and applications present new opportunities – through the data and analytics they provide – for HR and business professionals trying to better understand how the people in their organisations think and act as employees. And that is obviously really useful if you’re trying to develop an HR strategy.
When thinking about HR data analytics and how best to create value from it I tend to break it down into three components of a process. The What? The Why? and The Action!
The What being the MI reporting (the facts), The Why being the analytics of why the facts are as they are, and The Action being what you’re going to do about it. For example; an increase in turnover is The What, the reasons for it are The Why, the plan to address the issues is The Action.
All of this is fairly obvious, and this process is hardly rocket science, but it’s surprising how many organisations are still stuck on simply collecting data around The What. If you look at the time most HR functions are spending on this, while the balance of time should be being spent on The Why and The Action most of it is still devoted to the What; simply gathering the facts. But that creates little value on its own.
One way out of this dilemma is to forget all the facts you have today and start again. HR Professionals should start by simply working out, say, five pressing people issues in their organisation. Then gather the facts (data) in relation to them, but then devote the majority of their effort on establishing why the facts are as they are and what could be done to improve on the situation; where do we have the best/worst retention levels and why? What are engagement levels like in this underperforming area of the business and why etc.
That’s a good start but what technology is also making increasingly possible is the idea of ‘predictive’ people analytics. Getting ahead of a problem or opportunity before it has actually occurred. For example, using new survey and analytics tools it’s now possible to build an engagement profile for people most likely to leave the organisation, identify high potential employees with that profile, and then (hypothetically) act on their concerns before they actually resign. This is so valuable, and it’s increasingly possible to organisations who invest wisely in a good HRIS platform, good tools, and their MI analytics function.