How to Build a Data-Driven HR Team

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Monday, May 10, 2021

Looking for new ways to approach HR and get the best results for your people and the business? Consider a data-driven strategy.

Article 4 Minutes
How to Build a Data-Driven HR Team

Data has an essential role to play in the performance and success of countless organizations in the 21st century. It's predicted that, by 2022, annual revenue from the global big data and analytics market will reach US$274.3 billion.

One particular area where many employers have a lot to gain from the effective collection and analysis of data is HR. Optimizing your people analytics can lead to benefits including:

  • A stronger employee experience
  • Higher levels of diversity and inclusivity in the workforce
  • More effective talent acquisition and retention
  • Better results from training and development
  • Improved workforce planning

If you feel that your HR team could be doing more to leverage the power of data, here are some key steps you should be taking:

Understanding people analytics

To make the most of HR data and analytics, it's useful to understand some of the forms it can take and how different approaches work.

Descriptive analytics

The basic starting point for most employers, this encompasses the collection and analysis of essential workforce data like rates of absenteeism and attendance, staff turnover and retention. This is crucial to understand trends and challenges in your HR function.

Predictive analytics

Armed with your descriptive data, you can move on to making predictions about future events and developments, which will help you to plan for these scenarios more effectively.

Prescriptive analytics

Based on the insights gained from your descriptive and predictive data, prescriptive analytics can suggest actions that will help you increase the likelihood of achieving the most positive outcomes.

Know your goals and metrics

Much like any other business project, your efforts to put data at the heart of your HR operation should be focused on clear goals. It's also vital to make sure you have the right metrics and measurement processes in place to check your progress towards those objectives.

When setting your targets and benchmarks for success, make sure they're in line with the broader aims and priorities of the business as a whole. This helps to ensure that any changes and investments you make are genuinely relevant and beneficial.

If the organization is planning to expand into new markets, for example, measuring and developing the skills required to succeed in that mission should be a key focus of your data strategy.

Know your sources

You might have decided what you need to know about your workforce and HR function in general, but have you clearly identified the data sources and systems that will help you gain those insights?

Key areas to examine could include:

  • Team-level data on attendance and absenteeism
  • Payroll data such as compensation and benefits
  • Recruitment details like average time to hire and quality of hire
  • Performance management and appraisal results

You might also want to look into ways to get more targeted insights and specific data, such as running internal surveys.

Plan data storage and management

Collecting the data you need is just one part of a bigger journey. You also need to think about how you’ll store, process and manage that information, being sure to stay in compliance with dedicated laws like the EU's General Data Protection Regulation and the California Consumer Privacy Act.

It's important to make sure you have the necessary capacity and technical expertise to securely store all the information you need.

Cloud storage solutions can be efficient, reliable and scalable, but require a level of ongoing investment that will depend on executive-level backing.

Compare analytics solutions

If you choose to bring in third-party software and solutions to support people analytics, it's wise to do a thorough inspection of all available options so you can find one that's well-suited to your unique needs and goals.

Dedicated workforce data and management platforms are available from a range of providers, including software giants such as:

  • Oracle
  • Microsoft
  • IBM
  • SAP

When comparing the different solutions available to you, look for specific features and benefits that will help you optimize your analytics. It can also be useful to ask for a free trial or demonstration of the software before committing to a purchase.

Focus your reporting and evaluation

After data collection and analytics comes reporting, where you present your findings and connect them to your overriding goals or the problem you're working to solve.

It's important at this point to take a clear and focused approach, especially if you're a large company with a lot of HR data to manage and interpret. Giving yourself and your team very specific objectives will help to ensure that you concentrate on the most relevant details and deliver actionable results.

The same principle applies when it comes to evaluating your approach to people analytics and data management. By constantly revisiting, questioning and revising your strategy, you can ensure it's always fit for purpose and the business is seeing the benefits.

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