We’re nearly halfway through 2021 – when did that happen?
With organisations rebounding from the wake of COVID-19, they’re embarking on a journey of engaged workers, productivity, growth and success. But where to start?
Where should you turn to to ensure your 2021 HR policies are in line with the market, your organisation’s strategic vision and the cultural nuances of your business?
Information is the answer (or more specifically, your ability to harness HR data). Quality intel will enable you to upgrade your HR policies, and should act as the unequivocal informant of all insightful HR and business leadership decisions.
To get you off on the right foot, we’ve provided the three major considerations for HR data management so you can gain a competitive advantage in 2021.
Early adopting HR leaders are already across these initiatives. Maybe it’s time you were too?
1. Your Data Sources: Get it right, from the get-go
The data points available to HR business leaders, both inside and outside an organisation, are seemingly infinite. Success will be found by tapping into the metrics that are most critical for performance improvement in your organisation.
Don’t worry about anyone else; just focus on the information that will help your business performance improve.
Here are examples of key internal sources and metrics for you to harness HR data:
- Employee surveys
- Attendance records
- Revenue per employee
- Offer acceptance rate
- Voluntary turnover rate
- Involuntary turnover rate
- Salary and promotion history
- Employee work history
- Demographic data
- Personality/temperament data
- Training cost per employee
- Flight risk
- Time to fill
- Recruitment process
- Employee databases
- Exit interviews.
Here are some examples of external data sources to consider:
- Market status on availability of key skills
- Market compensation strategies
- Competitive employer brand performance
- Unemployment rate
- Underemployment rate
- Industry uptake of contingent workers and its effect on the business
- Economic data
- Social media profiles
- Recruitment and hiring data from LinkedIn
- Job boards published data
- Global perspective on industry trends, hiring, skills availability.
The key to gaining value so you can optimally take advantage of HR data management is by aligning the data with the organisation’s strategic goals. It’s critical to select the sources and types of data that are right for your business.
For example, a tech company may want to improve collaboration across departments, so they can increase the number of innovative ideas built into their software. HR can initiate supporting solutions like shared workspaces, company events and collaborative tools to help achieve this goal.
To determine how successful these initiatives are, HR metrics and analytics can be used to examine correlations between the HR initiatives and the company’s strategic goals.
Once the data is gathered, HR analysts feed it into pre-determined models, algorithms and tools to gain valuable insights. These tools offer dashboards, visualisations and reports so the company can see if there are positive business outcomes from the HR initiatives. As a bonus, we’ve provided examples of these tools at the end of this post.
2. Taking advantage of HR data through a robust process
An ongoing process should be put in place to ensure continuous improvement of the capture, review, analysis and application of your organisation’s HR insights.
Here, we’ve outlined a basic quality process you can use as a starting point. Keep in mind, the process must be applied to all segments of the data you unearth, every time you undertake a data initiative. Executed with diligence and attention-to-detail, this process will become second nature for your HR team.
Our recommended starting process, so you can ultimately use HR data, involves the following steps:
Here’s the checklist:
- Benchmark analysis
- Data manipulation
- Extract and apply insights
- Create an action plan based on analysis (continuously test new ideas)
- Execute on plan
- Streamline process
3. Get a handle on predictive analytics
Analytics enables companies to measure the effect of their people policies.
By applying complex statistical analytics, HR can predict the future of the workforce. This enables managers to measure the financial impact of human resource practices.
Predictive HR analytics is a technology that learns from existing people data and uses it to forecast future behaviour of teams, individuals, HR policies and processes. This means that predictions can be very specific.
Predictive HR metrics and analytics use techniques to create a formula, or algorithm, that best mimics the historical outcomes gleaned from HR data collection (or data mining). This algorithm then uses current data to predict outcomes in the future.
By applying predictive analysis to HR intel, HR business leaders are in prime position to become a strategic business partner, as they rely on proven, data-based predictive insights.
Practical applications of predictive analytics include:
- Forecasting the effect of people policies on wellbeing and happiness
- Estimating the bottom-line performance of HR policies
- Determining the likelihood of – and preventing – employee turnover
- Hiring success: for example, the questions interviewees get asked in Google’s hiring process are all fully automated, computer-generated and fine-tuned to find the best candidate
- Predicting revenue using engagement scores: understanding drivers of engagement and developing HR policies in line with these
- The effect of toxic employees in the workplace, including productivity loss and the likelihood of good employees quitting because of toxic people.
“Predictive analytics is increasingly important to talent acquisition, as sophisticated analytics teams begin to prioritise recruiting workflows, conduct workforce planning, evaluate different recruiting sources, assess quality of hire, and use pre-hire assessments. Companies that are not prioritising analytics do so at their own risk”. Deloitte Human Capital Trends report
BONUS: key tools used to HARNESS HR data
There are a number of industry-leading tools for your organisation to get the most from your HR data.
And finally, the power and pitfalls of HR data COLLECTION
Firstly, let’s take a quick look at the benefits of HR metrics and analytics.
HR has the potential to shift from being an operational partner to a strategic centre of excellence. Organisations now realise that success is built on people, and HR analytics can lead the way from intangible theory-based decisions to real ROI impact, through data-informed decision-making. Here are some of the benefits of HR analytics when they’re successfully applied:
- Better hiring practices
- Improved retention of the right talent
- Task automation
- Process improvement
- Improved employee experience
- More productive workforce
- Improved workforce planning through informed talent development.
And on the downside?
The road to actionable HR intel is not always easy – there’s going to be challenges along the way to achieving the holy grail of HR insight. And so, it’s important to stick to your guns so you can reap the many rewards that will be at your disposal. Below are some of the pitfalls your organisation may encounter:
- Finding people with the right skill set to gather, manage and report on the data
- Data cleansing
- Data quality
- Having access to too much data
- Not knowing what data is most important
- Data privacy and compliance
- Proving its worth to executive leadership
- Tying actions and insight to ROI
- Identifying the best HR technologies to keep track of the data.
Knowing how to use the relevant data is vital, as is preparing for the future data needs of your business.
Constantly updating your systems and staying ahead of the trends will allow you to keep accessing invaluable data that can be harnessed for organisational success.
Falling behind in the competitive world of analytics is like trying to ride a bike without pedals. Without the right tools, you’ll struggle to add value to your business.
Are you interested in getting started in HR analytics?
As one of the world’s top suppliers of contingent worker management solutions, CXC is perfectly positioned to optimise all elements of your contingent workforce strategy. With operations in more than 50 countries across 5 continents, and with decades of experience, we can assist with every aspect of your program.