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 unanimous adoption or those that have are even doing it well.
Brandon Hall Group research shows that only 31% 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?”
The biggest challenge that many organizations face when trying to become more data-driven in their decision-making is not committing enough resources toward their goal. This is a dangerous path to take. Any data that isn’t completely reliable and valid will cause any 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 one in five 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.
Beyond any reasonable doubt, the future of business lies in being more data-driven. In recent Brandon Hall Group research, four out of five organizations believe the role of data in making decisions at their organization is going to 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% — as close to a sure thing as you can predict in the business world.
Knowing that, any organization thinking about becoming more data-driven should focus more on when (ASAP) than if. The benefits of being more objective have far-reaching effects on the workforce, from improved diversity, equity and inclusion, better adaptability, higher levels of innovation, better risk awareness and more. Virtually every type and size company will benefit from a more analytically-driven decision model.
To move from being reliant on experience and instinct to become 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?
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% 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 was 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 all at once is a tall order. Instead, it is best to 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 are succession planning, LD, and recruiting and onboarding — all very nature future-focused. This is not to say that all aspects of HR 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 interest if your organization does not hire 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.