Article after article talks about how data is king. Companies build apps, release them for free, and grow and update their technology based on the data they collect. Companies use tons of data to make marketing decisions on who might be more likely to buy their product. Yet when it comes to a company making an employee resource decision, they would probably be better off flipping a coin. Many companies make employee/culture decisions based on gut or emotion which would be blasphemy for any other departmental decision.
Of course, there are some companies that have/are moving in this direction. For example, Google is well known for their work in People Operations for many years now (link). The issue is many newer or smaller companies are just not putting in the investment early on. This can impact them in the long run.
Data-Based Decision Making
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We firmly believe that making decisions based on emotions alone is more likely to cost you in the end. Yet many HR departments make decisions based on little to no data or analyses. When a company makes HR decisions, many times they will look at cost and then decide with HR and Senior leadership approvals. This may be done for anything related to new benefits/rates, policies, compensation plans, you name it. Making decisions without data and feedback from your customers is like working in the dark.
A company should use focus groups or surveysand other data points to help with making its decisions related to its employees. After collecting and using feedback in their decision making process, they should also be willing to provide updates and adjustments if the decisions are still not well received. How often have you seen your company roll out a new policy that is well researched, transparent, and explained? Even if you have, have you seen them tweak the policy based on feedback if some parts are not perfect? Probably not! Now think about if you have seen them do this for the product they sell externally? The answer there is more likely yes! Why is there a difference?
Example Data and Gaps
Below are some examples of HR Data that companies tend to either not collect, report, and analyze or do not do them well. We may also write some additional blog posts that discuss these different data sets and how they can be improved and link to them here in the future.
New Hire Survey:
Onboarding is a crucial part of of the Employee lifecycle. It is important to collect information from the employee early on to make sure that they are on the right track and that there are no issues early on that could end up causing the employee to leave or making them not be successful. It is important to ask questions about how their onboarding process is going, if they are receiving feedback and check ins from their manager, are there resources for them to learn about the company and what they need for their role, and are they building connections with other employees.
Turnover:
Some turnover may be regrettable or not regrettable (which is important information to collect). You should also be doing an exit interview for everyone who leaves to understand why. It is important to truly collect an honest response for this. It is also crucial that you have all of your reasons listed and defined in your HRIS system. It is not helpful to see that 80% of your Voluntary terms over the past year have a reason code of “Other”. You can not make any actionable changes with that type of data. At that point it would be better off if you did not collect the data to begin with.
Engagement:
Engagement survey data is like a company checkup. You can see how your employees are feeling about a variety of topics. It is crucial that you use this data to help drive future decisions and explain how the feedback your employees provided was used in future decisions. This will make it more likely for them to provide more transparent and detailed feedback in the future because they know that the survey is actually have
Diversity Data:
Diversity data is demographic data about your employees that is crucial throughout the entire employee lifecycle. These data fields can be anything ranging from gender, race/ethnicity, sexual orientation, military service, disability and more. If you request this information from your candidates and then continue to collect this information for employees, you can see how your entire HR process impacts different subsets of your population. Are certain populations more/less likely to be promoted? Terminated? Be a People Manager? All of these data points might help you find areas that you might need to improve and grow.
Skills Gap
One reason for HR not realizing the importance of their data, is because they do not have someone whose responsibility is to point it out. Every HR department should have someone responsible for managing the company’s HR data. If you ask the CHRO who that is on their team, I am not sure if they would have a clear answer.
Many HR departments are still “Service” driven. They hire HR Generalist after HR Generalist who is there to help with Employee relations issues and put out fires. While they might see the importance of the data they are collecting in their day-to-day work, they probably don’t have the time to focus or worry about the larger impact that all of this data they are collecting. Someone needs to be able to guide and drive that ownership from a companywide standpoint.
That is why it is so important to have an HR Analyst or HR Data Administrator who is responsible for this resource. The sooner a company has this person the better. Many times a company will hire this person after they reach 1000+ employees and they are then stuck cleaning up years worth of dirty or missing data. If someone is hired early on in your company’s growing phase the easier it will be to lay the right foundation. Your company is releasing important HR data every day. If you are not ready to record it, you are missing out on important historical data that could help drive future decisions.
Ethics
We started this article by talking about how companies are focused on being data-driven. One consequence that is now getting more attention is data privacy. With this discussion about companies being better about their internal employee data, there also needs to be limits and specific ethical standards that are followed.
Sometimes you have 3rd party vendors who build this directly into their tools. For example, some Engagement/Employee survey companies require a minimum number of responses to see survey data for specific demographic breakdowns. This helps limit retaliation (both consciously or subconsciously) by protecting the employee who may have given negative feedback. Employee trust is paramount. If you break that trust it is almost impossible to get it back. Protecting your employees data should always be top of mind when developing your HR data policies.
There is also always a chance of going “to far” when collecting employee data. Some companies have been in the news for using more extreme and data-intrusive tools to collect information. A company should think long and hard about if this type of data is worth the blowback that it might cause. There is more than enough data that a company can collect using non-intrusive methods that provide a big impact without causing the employees or public to question if their privacy is being violated.
What Is Next?
All of this blog post was just describing a starting point. The first steps that a HR department should take to start being data driven. All of this data is useless without proper reporting and analytics. There would be a lot of time wasted if you maticulously collected and organized all of your HR data and then did not use it (or worse, use it improperly). We will share other posts about reporting and analytics, but it is important to keep them in mind and have goals for them when determining what data you collect. It might also help to know what is most important for you and use that as a starting point for focusing on your data collection.
All opinions above are those of the writer and not of their employer(s). These blog posts should be used for educational purposes only. This post is not sponsored or endorsed by any company. For more information please read our Terms.