How Big Data Can Shape HR Decisions

What is Big Data?

In short, Big Data is a vast trove of information generated by multiple sources in many formats. Storing, searching, and analyzing this data presents challenges, especially when you factor in legacy systems and arcane tools. But once you overcome these challenges, Big Data presents huge opportunities to revolutionize crucial business decisions and influence strategy and outcomes. Here’s how HR can lead with data (a credit to this article by Michael Carty from Personnel Today).

1. Use HR data to solve urgent business problems. First, define the business problems that data can solve. From compensation benchmarks to contingent workforce outsourcing, which data points can clarify your decision making? For example,

If: You’re losing clients or investing more than you’d like in recruiting and training because of employee attrition

Then: Identify the indicators of flight risk among top performers.

If: You’re recruiting, but not sure how to identify potential top performers

Then: Identify common traits among your top performers, and contrast them with those of average or low performers.

If: You’re trying to decide whether to hire a contingent workforce

Then: Define your contingent rates and your permanent workforce’s hourly rates, and use your budget to inform your ideal workforce mix.

Next, define standardized data collection and retention methods. You’ll be able to crunch the numbers to solve cross-functional business problems, even if data is collected within different departments in your organization.

Finally, present this information in a user-friendly, accessible format. After you’ve defined key metrics, create dashboards to put the most relevant information at the fingertips of HR leaders who need it. According to a recent survey from the Human Capital Institute, 43 percent of companies still rely on spreadsheets and other manual reporting systems to capture, analyze and report HR data. You can innovate by investing in the people, processes, and tools necessary to analyze and report on data to get the most out of it.

2. Learn the language of data. Modern HR departments require people who can deal with complex data analysis and statistical modeling. Companies can enable employees by offering training to current employees, hiring new employees with advanced data skills, or outsourcing data-related functions. However you approach human capital management, sophisticated data is a key component you should plan to incorporate. Note that you, as an HR professional, do not need to perform advanced statistical analysis yourself; you just need to understand how to use those findings to support your story.
3. Balance data with humanity. Leverage your HR consulting prowess to tell stories (or reveal stories that are in the data). It’s called “human resources” for a reason. Numbers mean nothing without the insight to explain “why.” It’s also important to turn a critical eye toward the numbers. Numbers and analyses can be wrong, or can point you down incorrect paths. Ask critical questions to most experienced people in your department, such as “what does a software developer cost?” or “what are typical hourly rates for product design contractors?” Human experience coupled with rigorous data analytics is the powerful balance you’re looking for.
4. Story-tell, don’t “story-sell.” Remain impartial and consider all the data when looking for conclusions. It can be tempting to cherry-pick data to fit a certain narrative. Try to check your biases at the door. Data will transform your stories from “I think” to “I know” and help you drive business-critical decision making.
5. Get into a CEO mindset. HR is increasingly given a seat at the table on executive teams and strategic planning groups; in nearly 80% of companies, the top HR leader reports to the CEO. However, only 38% are viewed as key in the company’s strategic planning. Big Data and predictive analytics can help HR leaders move their story from people-focused to impact-focused. Tell the business story, not the HR story. For example, instead of discussing talent management with your leadership team, talk about resource allocation and risk management. Ditch HR-speak phrasing like “increasing internal mobility” and “decreasing attrition.” Instead, show how the data relates to your talent supply chain, and how employees growth opportunities and reduced turnover increases HR ROI.
6. Be compelling. As a final tip, always remember that when you’re telling stories or sharing data, the format needs to compel your audience. While preparing ask, “Why does my audience care? What’s in it for them?” Data backs up a story, but it’s up to you to sculpt a powerful narrative. Don’t overwhelm with a million charts and graphs. Visual components help, but photos and graphics can be just as powerful as complex graphs. If you try to convey every detail of data analysis, you’ll quickly lose the audience.

By following these tips, you’ll start or amplify the process of solving business challenges with data. Data can truly help you advocate HR efforts, by demonstrating their direct impact business objectives.