People & Leadership

People analytics: 5 steps to develop data-driven HR and People teams

Apart from a simple headcount report, fewer than 50% of HR leaders can deliver same-day metrics. Here’s how you build data capability.

Are you a numbers person?

Apart from a simple headcount report, fewer than 50% of HR and People leaders today can deliver same-day metrics such as top and bottom performers, skills gaps and attrition levels.

In fact, only 34% of companies are currently using data and analytics for making people decisions, according to our research.

Yet, analysing and turning data into actionable insights is a key requirement that organisations are increasingly expecting HR and People leaders to bring to the table.

It’s why we’re seeing the emergence of roles such as People analysts and People Scientists.

Progressive People Companies are realising that if they want to be the best, they must have the best.

And if they want to attract and keep the best, they must understand and use the data they have on their people in a better way.

The role of People Scientists

Ultimately, organisations today can no longer just post available positions on a job board and wait for the applications to roll in.

Low unemployment and a culture of mobility, particularly among millennials, have given people choices and it’s harder than ever to attract top talent.

As a result, we’re seeing HR – or ‘People’ – teams shifting away from being largely an admin function in a business, towards concentrating on building great experiences for their workforce.

This is something that’s important to a staggering 92% of employees.

But how do companies know how to build great experiences at work? Where on earth do they begin in uncovering their high-potential employees they need to retain in the business?

This is where new roles such as People Scientists come in.

Companies don’t make decisions on supply chains, their finances or distribution based on intuition. So why should they do the same when it comes to their workforce?

So, what can HR leaders do now to start creating and developing a data-driven HR team?

1. Identify the tools you have

Before you start investing in training your existing team or hiring new people, understand the ways your business and team currently collect data.

What data do you collect and what needs to be done with it?

What systems and software do you use to collect data?

Who within the HR team is responsible for handling and managing the data?

This will give you the current picture of your data gathering abilities as a department. You can then identify your needs-based gaps and develop the right skillsets from there.

2. Understand the comfort levels with people analytics

HR professionals can be broadly categorised into one of three groups with respect to their current analytical capability, according to the co-authors of The power of People: Learn how successful organizations use workforce analytics to improve business performance:

  • Analytically savvy: Formally trained in analytics techniques and adept at working with data and interpreting analysis.
  • Analytically willing: Open-minded about analytics and are ready, able, and willing to learn, though they lack formal training.
  • Analytically resistant: Sceptical and dismissive of the value of a data-based approach, preferring instead to rely on intuition.

Once you understand the different levels of analytical comfort and capability that exist within your HR team, you can establish how best to develop and build expertise with each of your HR professionals.

3. Generate a company-wide data-driven culture

For employees outside of analytics and engineering, data literacy is one of the hardest skills to get to grips with.

Speaking to The Innovation Enterprise, David Gainsboro, People data analyst at Dropbox, says increasing data literacy needs to be both a bottom-up and a top-down effort.

He says: “By top-down, I mean that leadership needs to be fully educated and needs to push for all business decisions to be made with the support of data, to both validate and challenge gut instincts.

“By bottom-up, I mean that the analytics teams need to offer training and access to data to those individuals who are already excited about data.”

4. Look both internally and externally for data lovers

You might already have people with strong data analysis skills within the company, but they may be deployed elsewhere in the business. Economics and behavior insights are all grounded in statistics and theories.

In HR, these numbers come alive. Each one’s a person, and you can see the fascinating real-world application of theories and data in practice.

People Science is the ‘real world’ application of data science. This should be HR’s message to any economics and finance graduates: “Come and see the fascinating application of data in the workplace, and the difference it can make to workforces, companies and people.”

5. Train everyone in HR on basic people analytics

A smart move is to have everyone in your HR and People team develop a basic understanding of analytics and show them how it can benefit your company’s business if used effectively.

Over time, this will drive employees within the HR team to consider analytics when implementing a new process or system.

This reinforces that data analytics is an important goal for the company and a vital part of the HR function.

Any new hires coming into HR should be assessed during interview for data analysis skills.

In fact, data-savviness should be a key requirement for all new recruits if you want to build a company-wide data-driven culture.

Don’t wait until you have the perfect data

A lot of companies say they would focus more on being data-driven if their ‘data was in good shape’. You will never have the perfect systems or totally clean data, so start today with what you have.

Get off the starting blocks and create a process. You can add to it and improve it over time. Show progress, and it will start to build momentum.

As HR and People leaders begin to scale and build their teams to meet the demands of the business, they’ll increasingly need data insights on the fly to present to business leaders to help drive decision making.

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