HR data can drive business decisions

Business can make better use of data and analytics to drive fast, fact-based decisions on its investment in people.

Stephen Hickey says organisations need to establish a rhythm to make better use of talent data.

There is unprecedented excitement about big data, with organisations striving harder to use data and predictive analytics to make better business decisions.

Finance, sales, marketing and supply chain functions increasingly rely on data and analytics to enhance their effectiveness, but what about human resources?

A Harvard Business Review study last year found 51 per cent of HR functions surveyed rarely or reactively used data to make critical decisions. Driving value through talent analytics will be an imperative for HR and help business leaders in an increasingly competitive marketplace.

How can organisations make better use of data and analytics to drive fast, fact-based decisions on their investment in people?

First, HR functions must start with business issues. Business leaders tend to focus on large issues and place prominence on the extent to which people affect them. Leaders don’t tend to take a functional view of talent that fits neatly with the organisation structure of HR; they want answers to talent issues that cut across traditionally siloed talent processes.

HR functions need to get on top of issues including: what are the potential talent risks affecting high-impact strategic and operational roles? What makes a successful salesperson or customer service representative in my organisation? Where should we be hiring the best talent from?

Second, ask the right questions of the data your organisation is already capturing. Most organisations capture enormous volumes of data on their people but do little strategic value-adding with it.

Data can be drawn from assessments undertaken in recruitment, employee engagement surveys, leadership feedback tools and salary benchmarking. One could argue that a business doesn’t need more data on its people until it starts making better use of the data it already has.

Organisations should be having conversations about known performance predictors, gener­ated by integrating existing data.

This could include results of performance validation studies into the consistent capabilities of high performers, and how this will help inform recruitment and selection practices.

Additionally, employee engagement data, performance and leadership feedback data can be combined to build the profile of leaders generating the highest discretionary effort and productivity from their people. These insights will improve the overall quality of future leadership investments in recruitment and development.

Third, empower frontline leaders with access to data and analytics on their teams to accelerate decision-making. HR no longer needs to be the gatekeeper of insights into a leader’s people. Increasingly, talent analytics such as employee engagement data will be reported in real time, and this information needs to be placed directly in the hands of those with the job of driving productivity and performance. HR should be doing less data administration and more coaching and consulting with leaders on talent issues.

Fourth, organisations need to establish a rhythm to make better use of talent data in everyday business operations. HR needs to review data on an ongoing and sustainable basis; data collection is not an annual one-time event based on compensation cycles or talent reviews. HR must bring insights to the business before the business comes looking for them.

The question to ask is whether your HR team is leveraging all the opportunity that big data presents.

Stephen Hickey is a partner and head of talent at Aon Hewitt.