The HR and business data disconnect—and what to do about it
In HR, as in practically every realm of business, there are a lot of interesting discussions happening about how to use analytics and big data to improve decision making and business outcomes. Yes, the possibilities are exciting but they are often limited by business realities. After all, unless the entire business or organization has bought into the promise of analytics and new solutions, it’s very difficult for HR to make any headway. And even if your organization is using a data-driven approach, leadership might not see the value of bringing HR data into the fold.
The truth is, however, that HR can add significant strategic value to the business when it is tracking and measuring the right data. The challenge is figuring out what data needs to be tracked and how to measure it, based on current business goals and drivers.
Thinking differently about HR data
As an HR consulting firm, we’ve seen that many HR professionals and departments have a lot of basic data about hiring, employees, turnover and the like (for example, data about where employees came from to help determine where to focus advertising dollars). And while the data may be helpful for the HR department, it’s of little value to the wider organization if it doesn’t help address any key business challenges.
If you or your HR team is looking for ways to add sustainable value to the business, then you need to start by understanding how to align HR metrics, create meaningful dashboards and analyze information that compliments the broader business strategy. In other words, figure out what the business is trying to accomplish and then asking questions to determine where HR fits into the strategic picture. For example, ask yourself:
- What are the people-related obstacles for each key strategic initiative this year?
- If the current business strategy isn’t working, are there personnel considerations that need to be addressed?
- If the current business strategy is working, how much better does the company want to be doing, and how might personnel-related issues be holding it back?
In business, everything comes back to people on some level. So once you understand the key strategic challenges, you can start tracking relevant people-related metrics, and figuring out the benchmarks they should be analyzed against. Benchmarks are especially important because without them your analysis is happening in a vacuum. For instance, leadership may have the perception that turnover is high, when in fact it’s relatively low for the market or industry. Or back to the example about knowing where successful employees came from. It’s one thing to know that 30% of employees came from a particular job board, but what may be more helpful is knowing the key competencies that are shared amongst the hires that position them for success in current and future positions. If you’re not sure where to start or what may be most important for your business to track, based on business goals or other drivers, an HR consulting firm can help you sort through the options.
The keys to success: staying focused and connecting the dots
Whether your HR department is sitting on a gold mine of existing data or is just beginning to collect and analyze, a good way to get HR involved in wider strategic initiatives is to start with a narrow focus that allows you to easily collect and analyze data. Once you learn the ropes and prove the value of HR participation, you can make a case for wider participation and continue to expand your capabilities.
For example, many high tech and software companies are currently competing fiercely for engineers and software developers. If the success of an upcoming strategic initiative could be in jeopardy because of anticipated hiring hurdles, at the very least HR could start tracking the time it’s taking to fill similar positions, the timeframe for identifying candidates and bringing them in house, and the average cost per hire. Knowing these details would help the leadership team with forecasting, and hiring processes could be adjusted according to your business goals emerging trends.
It’s a journey
The ability to track and use data is easier said than done. The hurdles can include data silos, skeptical stakeholders, a lack of the right skill sets, and more. The important thing is to take incremental steps toward improved data capture and analysis, starting with a tightly focused initiative or two in a key strategic area. vcfo can help, if you get stuck or just need an extra hand to get started. We not only provide human resources consulting, but vcfo also offers technology consulting. We can make educated recommendations for what data will be most valuable for you to track and set up the solution to ensure you’re getting the right information at the right time.
Cindy Gunderson is a Senior Human Resources Consultant for vcfo’s HR consulting practice, which provides HR outsourcing solutions and interim HR consulting. vcfo provides multiple services such as training, human resources compliance, M&A due diligence and of course connecting the dots between people initiatives and business goals.
For more information or to contact Cindy, please email her at firstname.lastname@example.org.