The ability to build an analytics culture within your HR function is extremely important if your goal is make decisions based on quality data. According to CareerBuilder, the cost of a bad hire is more than $50,000. So what is the solution to avoiding bad hires? Data – and this will never be accurate without the presence of a good data culture.
The problem with building a culture is that it is only something that can be experienced, qualitatively. At present, HR organizations that are not data driven rely on instinct or “gut” feeling to make decisions. Do you have the correct mix of talent to meet your objectives? Do you understand the cost of a bad hire for your organisation? Data driven HR looks forward, capturing as much data as possible to answer these and other important questions.
Unfortunately, most organizations sit somewhere in the middle, looking to become more data orientated, but with no idea of a proper way to implement a culture. A recent report on people analytics shows that the return on workforce investment is declining and a high performer turnover trend continues. These can no longer be ignored as the correct use of data can show HR teams where their true value lies.
In order to create a data-driven organisation, the best analytic habits need to be in place. It's hugely important that you can be confident that your organization is using the correct tools. This can be split into two main areas, reporting and analytics. Modern tools should provide both reporting and analytics.
Here are four core pillars of a data-driven HR organization, which are quick and easy to build with the right tools, executive support and skills training:
Reporting – The ability to extract data correctly from source systems and integrate this together into a database is critical for reporting. Once you have this single view of your people, align your HR metrics with strategic business goals, attract, engage, reward and retain top talent, accurately forecast future staffing needs and improve your corporate culture by capturing the correct data in the platform most relevant to you. Your team needs to have instant, access to unified HR data and metrics – from individuals as well as other departments.
Analytics – Having mastered reporting, it’s now time to move onto analytics, which gives you more visibility into your people and business. Data models in combination with forecasting allow you to integrate historical information to improve your analysis. Traditional reporting, such as spreadsheets, can be replaced by a set of interactive tools that allow business users to see how different business strategies actually play-out, proactively.
Questions – Set up regular briefings between HR and the teams that need insight which can only come from data. Primarily focus on answers to previous business questions and discussion of new problems to give your team a purpose. This also exposes decision-makers to analytics. Once they are comfortable with analytics, give them the keys to the tool so they can drive forward, using data to answer questions on their own time.
Communications – Verbally encouraging data-driven decision-making, coupled with practical examples, will start to trigger a culture change driven by you. Once decision makers start to use data, or demand data, and show its purpose, your HR organization will begin to take notice. The best leaders encourage change with a combination of behaviour and words. Colleagues will soon follow since they seek success.
If you are like most HR professionals, you got started because you are interested in people, not statistics. Not surprisingly, few have any kind of analytics or statistical background. So it’s vital that HR leaders identify the skills and capabilities required to create an analytics culture.
If your people analytics initiative is going to be transformational, then it needs the full backing of the executive team, not just within HR. This transformation is likely to happen in small steps, so these need to be celebrated, reviewed and the process improved. To find out more, take a look at our recent whitepaper, “The Adoption of HR Analytics in Organizations."