There is a craze in business around big data, and for good reason. Big data helps companies make decisions in ways they have never been able to before. So how does big data fit into HR? The answer for most companies – it probably doesn’t.
If you are a small or mid-size business, it’s hard to have the kind of complex data systems or analytics abilities needed to do big data. No biggie!
So now what? If you can’t do big data, then what are you supposed to do?
Simple. Just do data.
Many companies don’t use data to make HR decisions and they are missing out! Using data to inform your decisions will set you apart and will help firm up the soft side of HR.
Here is what you do.
1. Commit to using data to make decisions.
This is key. Don’t use data as an add-on to a presentation supporting a decision you already made. That’s doing it wrong. Bring data into the discussion in the beginning and use it as a guide to make the right call. It will pay dividends for your HR department and your company.
2. Master the basics of analyzing data.
Your HR team members don’t need to be master statisticians to use data in a powerful way. There are a few key things you can do with raw data in Excel or Google Sheets that will give you the insights and information to make the right call. Start with learning how to calculate percentiles. If you know the 25th, 50th, and 75th percentile of a set of data, you will be ahead of the curve.
Learn how to track data over time and display trends with a line graph. If you want to demonstrate that your major HR initiative is making an impact, you need to have baseline data to compare your results to so you can show change over time. That means you need to be collecting data on an ongoing basis, which leads to the next point.
3. Collect good data on a continuous basis.
Data scientists call it GIGO – garbage in, garbage out. If your data collection habits are garbage, then your dataset will be garbage, and your “data-based decisions” will be garbage. Don’t fall into the trap of thinking that using data only happens when it comes time to make a decision! Using data means collecting data continuously. If you have a dataset missing a lot of info, it won’t help you.
Now what makes good data? Well, there is a lot that can go into this depending on what you choose to measure and how you track it. In HR, you are usually either recording numbers or categories for a certain item. Make sure you decide in advance what format you want the data collected in so that it can be used in analysis later on.
If you are gathering data using numbers, ensure everyone recording data uses the same scale. It won’t be very helpful if one person records performance scores for employees as a 1-5 rating on a performance review and another person records it as a percentage of annual performance goals met. Those numbers are not on the same scale and cannot be easily compared in the future.
When you use categories, start by defining them up front. If you want to track educational experience of employees, it would be good to have set categories like (a) high school degree, (b) bachelor’s degree, and (c) graduate degree. This prevents the problem of having data like “started college, but didn’t finish,” and “HS diploma,” and “graduated high school 2004,” when all of those fit into the “high school degree” category. Setting categories in the beginning will help give you good clean data to work with when you need it.
4. Start small and do it right.
Data is more “if you’re going to do it, do it right” and less “go big or go home.” Don’t track everything under the sun. Start with a few areas that your team is most interested in. Keep the list at three areas or fewer so you can put a sharp focus on getting good data.
Once you have honed in on a few areas to track, stop and ask the most important data question: What decision will I make with this data?
If you don’t immediately know the answer, then it probably isn’t worth the hassle of starting to track it. Data is used to make decisions. If you are not going to make decisions with the data, then it might just be a useless curiosity.
5. Link HR data to business outcomes.
This is how HR data gets a seat at the executive table. Using data to make decisions within the HR department is great. Using HR data to make decisions for the company is powerful. Linking HR data to business KPIs takes more work and expertise than making a graph and putting it in a slide deck. This is where some data analytics will come in to play. If you aren’t comfortable doing statistics on your own, bring in an expert to guide you through the process. It will pay off in some pretty powerful ways.
Imagine if your HR team could show a statistically significant correlation between employee engagement and productivity, or demonstrate that leaders’ 360 review scores are a predictor of employee retention. It’s this type of information that changes a key HR initiative from a gamble into a wise business investment.
This is how you transform HR into a data-driven business unit that gets results.
Whether your HR team is deep into big data, or you’re just looking to start using data to make decisions, call The H.S. Group to help take your HR analytics to the next level!