Data-Driven HR Teams Boost Business Outcomes
Author: Victoria Kelleher, HR & Compliance Center Lead Survey Specialist
Date: March 19, 2024
Data can be a valuable tool for employers to survey the landscape at their organizations. Through people analytics, business leaders can identify the markers of key workforce issues and make informed decisions to drive forward a company’s success.
However, some companies are more effective than others when it comes to collecting and analyzing people data. Employers need to identify the obstacles they face and develop a plan to improve their people analytics process if they intend to capitalize on its full potential.
Obstacles in People Analytics
The effective use of people analytics requires organizations to efficiently collect, store, and analyze data. Employers face obstacles that challenge their progress at all of these stages. A recent HR & Compliance Center survey sampled 313 HR representatives from organizations with more than 250 employees to explore the landscape of people analytics. It found that representatives from companies that are not very effective at using people analytics report various obstacles, including a lack of the appropriate resources needed to collect data, difficulties keeping data consistent within organizations, problems with data integrity, and a lack of data literacy within HR teams.
These barriers can have far-reaching consequences. The same survey found that organizations with a higher degree of effectiveness in people analytics were far more likely to report recent improvements in key performance indicators like employee engagement, key talent turnover, and Net Promoter Scores (see Chart 1). Companies that have not mitigated these barriers enough to improve their efficacy with people analytics miss out on the associated boosts in these outcomes and, in turn, are more likely to report these outcomes worsening.
Chart 1: Level of People Analytics Effectiveness and Business Outcomes
The Markers of Excellence
Obstacles to the effective collection and use of people data can be tackled with leading practices that support organized data storage and application. XpertHR’s latest data revealed a number of distinguishing practices between organizations that use people analytics effectively and those that do not. The survey found that organizations which are highly effective at using people analytics are more likely to have:
- Established data governance policies;
- A centralized platform to keep people data consistent across the organization;
- At least some HR staff with data analysis skills, and;
- At least one dedicated data analyst role on the HR team.
The likelihood of reporting improvements in key performance indicators was directly correlated to the degree of data skills on the HR team. For example, the highest likelihood of improvement in employee engagement, key talent turnover, and NPS was seen in organizations that had multiple dedicated data analyst roles on the HR staff (see Chart 2).
Chart 2: Dedicated Data Analyst Roles and Business Outcomes
Takeaway
There is a clear relationship between people analytics practices and business outcomes, with the most effective organizations reaping the benefits of a well-implemented people analytics strategy. These organizations share some commonalities in their people analytics practices, with measures in place to mitigate the impact of some common obstacles. Organizations that are struggling to reach the level of effectiveness they aspire to in people analytics may be able to benefit from adopting some of these practices. In particular, they should:
- Establish defined data governance practices;
- Adopt a centralized platform to store people data, and;
- Boost HR teams with data skills through upskilling or the establishment of dedicated data roles.