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Why HR needs to start being more data fluent

In today’s world, data is being collected on everything that we do. From surfing the internet to monitoring organisational performance via business software, we live in a world of mass data collection. And while our IT, finance and marketing colleagues are all reaping the benefits of this information to add more business value, only 41% of HR professionals have admitted to feeling comfortable with having conversations about data, and just 23% have admitted to feeling competent at analysing HR data.

The age of data is here! And just as reading and writing have been the core literacy skill requirements for most jobs over the past few decades, the day is fast approaching where data literacy will be up there too.

Ok, so that day isn’t here yet – but it’s approaching faster than we think. And don’t worry; it does not mean that everyone needs to be a data scientist. Data literate means understanding, analysing and interpreting data to identify trends and patterns that could affect your organisation.

What does that mean for HR? According to Deloitte Insights, 71% of organisations consider HR analytics a high priority. Similarly, Insight222’s People Analytics 2021 Trends Report found that 90% of CHRO’s expect their HRBP’s to utilise people data and analytics in their daily work.

In short, HR needs to start evolving in this digital age before we get left behind.

The benefits of a data-driven HR

Upskilling HR to ensure that data is collected and analysed systemically can be invaluable when implementing and measuring the success of specific initiatives. Here are a few ways in which HR can use data to add more business value and upskill not only their department but the business as a whole:

More evidence-based decisions and reliable predictions 

While recent research has highlighted that 61% of HR leaders use a data-centric approach to decision-making, 40% have declared that they still base their decisions on gut feelings.

This article is not to deter you from listening to your gut, as it’s widely known that your intuition is a great way to determine whether you should follow an action or not. The key takeaway is that your gut is not always correct. This puts you at risk of making devastating decisions and predictions, as that one wrong decision can have a catastrophic impact on your people and organisation.

By taking advantage of all the data available, analysing it and interpreting it to produce reliable insights and predictions, you will be on your way to making more informed decisions that contribute to the organisation’s business and innovation goals.

An HR function that drives business performance

People data can give us a deeper insight into metrics such as employees’ performance, well-being and commitment. But HR analytics does not stop at HR data. By integrating HR data with other business and organisational data, you can build a picture of how the whole organisation is performing. This can help you make better decisions about where to invest your resources and how to improve overall performance.

For instance, if you see higher employee engagement in departments with lower turnover rates, you might investigate what those departments are doing differently. Or, if you see that sales are higher in regions where average employee satisfaction is high, you might want to figure out what’s driving that correlation.

An organisation where employees stay

With the post-COVID changes in workplace preferences and associated “great resignation” and reshuffle, more than ever, we need to be proficient in understanding what is prompting our employees to jump ship.

Let’s take a look at how we can use data to help us improve employee retention:

  1. Employee surveys are a great way to collect data on employee engagement. By analysing the results, you can identify areas where employees are feeling disengaged and work on addressing these issues.
  2. Staff absenteeism patterns can also be a valuable source of data. If there are spikes in absenteeism, it could indicate that employees are unhappy with something in the workplace. HR can use this data to investigate the cause of absenteeism and address the issue.
  3. Key figures such as turnover rates and resignation rates: If these rates are high, it could indicate that employees are unhappy with their current situation. This data can then be used to identify the root cause of the problem and implement initiatives to improve the situation.
  4. Finally, leaver interviews. These can be invaluable in identifying why employees are leaving the organisation and implementing initiatives to improve retention rates.

A culture of diversity & inclusion

There are a lot of talks these days about the importance of diversity and inclusion in the workplace. And rightly so – organisations with a more diverse and inclusive workforce perform better financially and operationally.

But achieving diversity and inclusion is not easy. It requires a concerted effort from everyone in the organisation from the top down… and starts with HR.

The only problem is that the chances of achieving diversity and inclusion are slim if HR isn’t using data effectively.

So, how can a data-fluent HR function improve diversity and inclusion in the workplace?

  1. Ensure equal treatment and pay throughout the organisation

Equal treatment and pay are fundamental principles of diversity and inclusion. And it’s something that can only be achieved if HR is using data effectively.

By tracking the correct measurement values, you can ensure that everyone in the organisation is treated fairly, regardless of gender, race, or any other demographic difference.

This data can then be used to inform decisions about things like promotions, pay rises, and bonuses. As a result, you’re more likely to create a level playing field that gives everyone an equal chance to succeed.

  1. Track the progress of your diversity and inclusion initiatives

Data can also be used to track the progress of your diversity and inclusion initiatives. This is important because it allows you to see whether or not your efforts are making a difference.

Do you see an increase in the number of applications from under-represented groups? Are more people from under-represented groups being hired and promoted?

By tracking these metrics, you can get a clear picture of whether or not your efforts have the desired effect. And if they’re not, you can change your strategy accordingly.

  1. Identify unconscious bias

Unconscious bias is a real problem in the workplace. And it’s often why people from underrepresented groups are overlooked for jobs or promotions.

But, the good news is that data can help you identify unconscious bias in your organisation. By tracking things like who is being hired and promoted, you can spot patterns of discrimination that would otherwise be difficult to see.

Once you’ve identified unconscious bias, you can then take steps to address it. This might involve changing the way job descriptions are written or the way candidates are assessed during the recruitment and promotions process.

You don’t need to be a data scientist to be data literate.

You don’t need to be a data analyst, data scientist or whizz at excel and SQL (Structured Query Language) to be data literate. There is much value in asking the right questions about your data and interpreting it. Yes, you can take a course to help improve your data literacy, but all you need is the right HR system to help you gather and analyse the data with a click of your fingers (or the press of a button).

So what should you look for in your HR software?

First and foremost, it should be able to gather all your HR data in one place and integrate it with other systems. It should also be able to analyse all that data for you to identify trends and patterns and make better evidence-based decisions without having to know complicated statistical formulas. This way, you’ll have a complete picture of your workforce and be able to make better decisions based on data.

If your current HR software doesn’t have these features, then it’s time for a change. The right HR software can help you be more data fluent without learning complex analytics tools or programming languages. So don’t wait any longer, and start looking for the right HR solution today. Your data will thank you for it.

Contact us today to learn more about how we can help you become more data literate.

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