Todayâs HR leaders are relying on analytics to drive forward HR strategyâbut there are some hurdles to cross along the way.
By Marta Chmielowicz
Human resources has always been a people-focusedÂ functionâbut now it is a numbers-based profession asÂ well. In fact, LinkedInâs Global Recruiting Trends reportÂ indicates that 64 percent of todayâs organizations useÂ data at least occasionally and 79 percent are somewhat likely toÂ take advantage of it in the next two years.
The concept of leveraging analytics to drive more informedÂ decisions isnât new, but HR leaders are now faced with anÂ unprecedented volume of data and the technology to analyzeÂ it quickly and efficiently. Rather than allowing data to sitÂ underutilized in Excel sheets, organizations are increasinglyÂ relying on analytics to better understand the business impactÂ of employee initiatives, improve people-related decision-making,Â measure employee productivity, and more. And dataâsÂ functionality goes further than thatâsophisticated companiesÂ are even using it to power intelligent technologies like artificialÂ intelligence.
According to LinkedInâs report, the most common uses of data inÂ HR are twofold: to understand a problem or to execute a growthÂ strategy. Top uses in the realm of talent acquisition include:
- Increasing retention (56 percent)
- Evaluating the skills gap (50 percent)
- Building better offer letters (50 percent)
- Understanding candidate needs (46 percent)
- Workforce planning (41 percent)
- Predicting candidate success (39 percent)
- Assessing talent supply and demand (38 percent)
- Comparing talent metrics to competitors (31 percent)
- Forecasting hiring demands (29 percent)
For example, HR professionals looking to understand theÂ cause of high turnover can begin by consulting compensationÂ history, promotion history, employee satisfaction surveys,Â and performance reviews to get to the root of the issue andÂ then comparing those metrics with those of key competitors.Â Triangulating these metrics across the employee lifecycle canÂ help organizations predict when employees will leave and betterÂ understand how to make them happy during their tenure with theÂ organization. All of this can have a huge impact on a companyâsÂ ability to execute on its strategy and meet business goalsâandÂ thatâs what makes data so valuable.
However, quality issues can get in the way of a positive outcome.Â LinkedInâs research reports that the greatest barriers to using dataÂ are:
- poor data quality (42 percent);
- difficulty finding the right metrics (20 percent);
- high expenses (18 percent);
- inability to use data effectively (14 percent); and
- other (6 percent).
So while people analytics have huge potential to transform HRÂ from an operational to a strategic function, leaders are facingÂ some fundamental hurdles when attempting to gather and use itÂ effectively.
The Society of HR Management (SHRM) recommends two bestÂ practices to overcome these hurdles:
1. Monitor the quality of the data. Analytics are only helpful if theÂ metrics they draw from are high quality, quick, and accessible. HRÂ leaders should make sure that their systems collect data using theÂ âCAREâ framework:
- ConsistentâThe data must be measured steadily over time.
- AccurateâInformation should be recorded precisely.
- ReliableâThe metrics must dependably assess the correctÂ behavior.
- EfficientâThe cost of collecting the data must be minimal.
2. Look at data holistically. While metrics reveal important factsÂ about employee performance, they should not be looked at in aÂ vacuum. Instead, HR leaders should look at the data holistically,Â taking into consideration the ways that different types of metricsÂ illustrate various angles of the underlying issue HR is trying toÂ solve. Pure HR measurements do not provide much value to anÂ organizationâthey need to be evaluated as a whole in order toÂ tell the real story.
To do this effectively, HR leaders need to:
- Understand the business strategy.
- Identify the critical human capital problems that are holding theÂ organizations back.
- Tie the business strategy to the HR strategy in order toÂ demonstrate ROI.
- Determine the measurements that will help address the issues atÂ hand.
- Work across the organization to develop and gather meaningfulÂ data.
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