Why HR data literacy skills drive better decision-making

HR tech adoption is advancing rapidly, with leaders turning to it to drive improved business outcomes, among other aims.

Incredibly, 42 percent of respondents in a Josh Bersin Co. survey rated their HR technology implementations as either failed or not fully successful two years after onboarding. This highlights how crucial it is for HR leaders to focus on identifying the right technology products and adopting them effectively rather than rushing to deployment.

However, it’s also vital that your teams be able to derive key insights from the wealth of HR data the tech will make accessible. Those insights can be hugely valuable in formulating an actionable, people-driven business strategy.

What is HR data literacy?

Data literacy skills not only unlock the true value of your people data but also build the credibility of your HR team. When HR professionals can back their claims up with incontrovertible data, it makes it easier to achieve buy-in for your people programs—and secure an appropriate budget.

Gartner has found that the top three hurdles for HR technology leaders are ensuring ongoing adoption of HR technology (57 percent) among key stakeholders, justifying HR technology investments (46 percent), and developing and maintaining a strategic roadmap for HR technology transformation (43 percent). You can reduce all of these challenges with greater data literacy.

Who uses HR data across the company?

Tech literacy and adoption that fuels the success of your business can start with HR, and your HR team will typically be at the forefront of the digital transformation.

However, people data can also be a valuable resource for many other teams in your organization, helping people make better decisions backed up by tangible information and insights. Here’s how they can use HR data sets:

Finance teams

A close relationship between your CFO and CPO makes budgeting for your people programs a much faster process. As part of this, finance professionals can make use of people analytics across their workflow, such as by:

• Using detailed compensation and average salary data to inform workforce planning and more appropriate salary bands
• Drawing on people data to understand where to open new sites based on contractor insights and the possibility of converting local workers into full-time employees
• Distilling KPIs such as average tenure, attrition, and retention to help reduce recruitment costs
• Reading employee engagement and satisfaction metrics to inform recruitment spending, and DE&I data to support compliance efforts

Working closely with your finance team can also help you choose the right human resource information system (HRIS) or human capital management (HCM) system for your organization. Finance professionals can help ensure it provides the required functionality and tools and identify whether moving from various point solutions to an all-in-one platform is financially beneficial.

Learning and development teams

People in your learning and development teams—or with an L&D responsibility as part of their role—can also use people data to effectively track your workforce’s skill sets and identify gaps according to changing business needs.

By monitoring the current state of play, you can target professional education programs that address the gaps and advance your people’s skill sets to where they need to be. This is particularly helpful when looking ahead as your people move through or away from the business.

Workforce planning teams

Workforce planning is a complex business, and without the right data, it becomes all but impossible. Teams involved in workforce planning rely on people data focused on skills gaps, recruitment needs per team per site, tracking headcount, growth rate, attrition, and absenteeism.

Understanding people analytics can give professionals a clearer picture of retention rates, turnover trends, and the key relationships between and within teams. It can also give you a solid foundation on which to build a workforce planning strategy.

HR data strategy can also help identify which roles you can outsource and which people have underused skill sets. Those professionals may prove suitable for retraining or reskilling to fill emerging positions, saving on external recruiting costs.

Compliance and legal teams

For complex multi-national companies, ensuring compliance with local labor laws is crucial. People metrics can help legal teams comply with DE&I regulations, PTO rules, confidentiality laws, and many other critical pieces of employment legislation. In return, legal teams can help with your HR data governance.

Diversity, equity, inclusion, and belonging teams

Although effective DEI&B isn’t about box-checking, real insights into the state of play at your organization can be uncovered by people data like:

• Gender pay gaps
• Candidate demographics
• Retention and turnover across employee groups
• eNPS
• Advancement and promotion rates per group
• Pay equity
• ERG participation

All of these DEI&B metrics can reveal what’s going on under the surface as your teams drive better diversity and representation in your organization.

How can you use HR data to create a people-driven business strategy?

With your people data compiled and shared throughout your organization, it’s time to use your company’s newfound HR data literacy.

1. Analyze your HR data, draw your insights, and identify conclusions. L&D staff might track which training programs correlate with the highest-performing team members, or DEI&B professionals might identify specific teams with a more significant gender pay gap.
2. Benchmark your data. Comparing your results with industry standards can help finance teams. For example, be sure they’re spending an appropriate amount on people programs or helping compliance teams stay on the front foot.
3. Create tangible strategic goals. With the evidence in hand, identify ways of tracking your improvements in the data. For example, workforce planning professionals may wish to see skills gaps close and teams become better equipped for future challenges.

Finally: Track, report, and demonstrate your impact

Once your teams have pulled the relevant data from your HRIS and compiled their insights, it’s important to present those findings to the top stakeholders in your organization.

Doing so is an excellent way of securing buy-in for essential people programs and maintaining momentum, which you can demonstrate via month-on-month (MoM), quarter-on-quarter (QoQ), or year-on-year (YoY) updates.

Live dashboards and real-time updates to the data may also be useful for exceptionally engaged stakeholders who wish to keep closer track of developments.

Data literacy unlocks the power of HR tech

As businesses around the world race to onboard new technology to reduce churn and improve margins, it’s important that data literacy isn’t lost in the rush.

Encouraging data-driven HR decision-making is key to leveraging your resources to the greatest effect. By analyzing your data points, sharing access around the organization, and taking action on the insights you uncover, you can build a stronger business for the future.