The Importance of Big Data & Data-Driven Insights in HR
It’s no secret that big data is big news both in HR and elsewhere in the business. Just as companies can better market to their customers, thanks to insights gleaned from consumer data, HR departments can make better workforce and business decisions based on their own data. Unfortunately, there are still many companies that either aren’t collecting and storing the right human resources data or simply aren’t utilising the data they do have.
Today, powerful HR management systems and innovative software mean companies have access to more HR data than ever before. It’s now possible to track and store data on almost anything, from basic employee profiles to training and performance. This means that HR teams can get more insights than ever from their HR data and analytics.
Basic KPI’s and metrics such as turnover rate is just the tip of the iceberg. Instead, more in-depth metrics like training efficiency and productivity index provide much more value to HR departments, especially when used in combination with other insights from across the business.
Benefits of Utilising Big Data in HR Department
Plan for the Future
While no one likes to dwell in the past, it has been said before that our history holds the key to our future success, and the same can be said for HR. The more data you have from past and current performances, the better you can plan for the future and optimise for success.
Make Informed Decisions
The more data you have and actually use, the more context and insight you have to make better decisions. Sometimes one metric doesn’t tell the whole story! it’s actually possible to make worse decisions based on incomplete data than decisions based on no data at all. By gathering as much data as you can, you can begin to get a better idea of areas that are working and areas that aren’t. This can help to make the right improvements.
Improve Employee Experience
Your workforce is your driving force, so keeping them happy should be your priority. Many companies are now looking beyond viewing employees as just workers and are instead using HR data analysis and insights to improve the employee experience. After all, today’s employees are often choosing you as much as you’re choosing them. The more data you have, especially on employee performance and even employee wellbeing or happiness, the better you can make your employee experience.
Improve Business Performance
By comparing more of your HR data to your business data, you can get a much better idea of the direct and indirect impact that HR activities are having on the business. The more data you have, the easier it is to spot correlation as well as causation between HR and your other business functions. For example, how do your customer satisfaction KPI’s measure up against your employee wellbeing metrics – is there a link between the two?
More Efficient and Effective
Data is grounded in fact. It’s tangible and measurable whether quantitative or qualitative, which means its much more accurate and reliable than simple observation or opinion. It also means the more you have, the more accurate you’ll be. Plus, data means you can begin to automate tasks and gain powerful insights that would otherwise take days, months or even years working in any other way, making it much more efficient too.
Using Data-Driven Insights in HR
The importance of data and its role in HR decision making can’t be understated. The benefits are almost endless and can be gained at every stage of the employee experience, from sourcing talent to saying goodbye. We’ve highlighted just a few of these areas and the role data could play in each if utilised properly.
Recruitment
Big data can provide even more information on potential candidates long before they officially enter your system. By taking advantage of social networking and the powerful sources now provided with some of the best HRMS softwares, you can supplement basic employee information with more in-depth insights to help you find the best fit for your company.
You can also look at performance data of new hires in the days, weeks, months and even years following to see which ones worked out the best and which ones didn’t quite make it. This can help inform your future hiring decisions, from identifying where your most successful candidates were sourced to what kind of person they are.
Training and Development
Data on the current skills in the workforce along with current business performance can help identify skills gaps that training could fill. Also, data on the attendance and success of your training courses can help you identify the most successful best practices for learning and training.
Performance and Compensation
Big data can help to create a true pay-for-performance culture that assigns bonuses based accurately on performance. There’s no need to rely on qualitative performance reviews with results based on opinion. Instead, look at the data to provide insights on an employee’s daily workload, the content of the work and their task achievements to inform managers and HR teams of actual performance to assign compensation accordingly. You can even automatically calculate salaries accurately according to pay-for-performance standards.
It comes down to Results
Ultimate, data and the insights it inspires is so important simply because it works. Decisions based on big data analytics are much more likely to be the most successful ones for your business. Companies like the tech giant, Google, use their sea of data to make more informed decisions and often have awe-inspiring turnover rates, workforce ROI and much more. These types of companies attract the best talent from all over the world and often find themselves in the enviable position of having this talent compete for them rather than the other way round. Unsurprisingly, Google has been voted best company to work for eight out of the past eleven years.
Ready to start collecting your own big data and utilising it to transform your HR activities? Contact us today about using SuccessFactors to unlock the power of your HR data.