The value of being a more objective, data-driven HR organization has been extolled for years. Everything from sports to social media and politics has become more analytics-driven in the last decade. But that does not mean universal adoption or that those doing it are doing it well.
Current State
Brandon Hall Group research shows that only 31 percent of organizations — less than a third — strongly agree that the insights generated from their data analysis transformed the way they do business. Clearly, something is holding many organizations back from becoming more data-driven and for many companies, the question is, “Where do we even start?”
Complications
The biggest challenge many organizations face in trying to become more data-driven in their decision-making is failing to commit adequate resources toward their goal. This is a dangerous path to take. Any data that isn’t completely reliable and valid will cause decisions made from that data to be fundamentally flawed. This will lead to distrust and the entire effort is set back. The initial phase of collecting, curating, cleaning and analyzing data for insights must have the proper technology, people and processes surrounding it.
Unsurprisingly, Brandon Hall Group research shows that only about 1 in 5 organizations are completely comfortable with decisions made using data in their organization. This directly reflects the nearly same percentage of companies using data to make breakthrough business decisions.
Consequences
The future of business lies in being more data-driven. In recent Brandon Hall Group research, four out of five organizations believed the role of data in making decisions at their organization will increase. In fact, when looking at organizations that will either keep the same number of data-driven decisions or will increase, it is an overwhelming 96 percent — as close to a sure thing as you can predict in the business world.
Critical Questions
To move from being reliant on experience and instinct to becoming a more data-driven organization, it’s necessary to address these questions:
- What tools and technologies are available to help collect, scrub and distribute data to relevant stakeholders throughout the organization?
- What metrics are used to determine whether the decisions made using data are objectively better than the non-data-driven decisions made previously?
- Who or what group is responsible for moving the organizational culture toward being more data-driven?
- Why is making more data-driven decisions so critical to your organization now and in the foreseeable future?
Brandon Hall Group POV
When it comes to data analysis, there must be enough time, budget and people dedicated to the project
Brandon Hall Group research shows that only 38 percent of organizations believe they have enough time and resources to create the right insights from their data and analysis projects to drive business results. That must be the top priority for any organization seeking to become more data-driven. There simply cannot be a cultural change if the data is not trusted at your organization; everything flows from that trust.
Once the data is believed on sight, real insights can be gained and the decisions that are made from that data will be objective and based on all known information. The result may not be what is expected but the process is correct and over time, an organization that makes data-driven decisions will see its vision carried out despite the occasional external anomaly that causes unforeseen issues.
Focus Efforts on Making Future-Planning Decisions More Evidence-Based
Trying to make an entire HR organization more data-driven at once is a tall order. Instead, concentrate your first steps on areas that are primarily focused on the future and are more strategic, to become more evidence-based.
As seen from Brandon Hall Group’s research, the top three most important HR areas to focus data collection and analysis efforts on are succession planning, LD and recruiting and onboarding — all very future-focused. This is not to say that other aspects of the business could not benefit from taking a more objective, data-based approach but the areas that will have the most impact are those that affect not only the current workforce but the entire organization for some time to come.
Only Perform Analysis on Actionable Areas
Many organizations just starting on the path to becoming more data-driven make the mistake of trying to gather data for every question and decision. This is counterproductive because there are some areas where data cannot help. For instance, knowing that there are only a small number of engineers in the immediate area is not of any value if your organization does not employ engineers. Likewise, knowing that employees tend to perform slower during the holidays is only useful information if you can change schedules, adjust sales expectations or something similar; you certainly cannot change the dates of holidays. Finally, some decisions can and should be made from experience or instinct, especially if they must be made in a very short amount of time or are of little consequence. Expending the time and resources gathering data for every single decision is simply unrealistic. Concentrate your efforts on actionable areas and monitor the results for even more useful data.
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