Successful and innovative organizations have been using data to drive decisions for decades. We’ve seen marketing, finance, and sales functions transform themselves from being intuition-based to using data to revolutionize how they work.
HR is the laggard and absolutely must do more to keep up.
You’ve heard this before, right? Repeat that to a random sample of executives at large organizations and you’ll get reactions ranging from knowing head nods to table pounding. On the Gartner Hype Cycle curve, it feels like data-driven HR has hit the “peak of inflated expectations,” which means we’re headed to the “trough of disillusionment.”
I would like for us to quickly accelerate through that trough, by starting to get ahead of setting reasonable expectations for how much data can truly impact decision making in HR. As an HR analytics practitioner, I am firmly planted in my belief that analyzing people data can not only elevate HR, but make the working world better. That said, we’re going to need to be patient.
How HR Executives Impact People Analytics
People analytics and its use in HR departments across the country is accelerating. But it’s causing consternation among seasoned HR professionals. Trevor Teason, who leads recruiting analytics at Capital One, takes us inside the latest thinking.
Data isn’t in our DNA in HR. We’re going to get there, but for the present, we must respect that this is going to be a process. For the time being, we need to push ourselves to be data-informed rather than data-driven. We need to leverage the quantitative data in HR systems within the context of the qualitative data we carry around in our heads.
Data kept in rows and columns inside of a relational database is not the only data that exists. Stories, impressions, and conversations are another form of data and, in HR in particular, we must take these things in sum total. Over time, we will codify the qualitative data we have floating around in our collective consciousness into hard data collected by a system.
Truly data-driven business functions didn’t simply begin making decisions based solely on data overnight. They spent long periods of time stewing in data, understanding fundamental relationships, and capturing more useful data. Leaders in these functions have well developed instincts about the natural level of metrics and bags full of experiences to tell them what movement in key metrics are likely to mean.
For example, leaders in credit card companies have an ingrained understanding of what a comfortable level of defaults is. They can likely rattle off that level segmented by credit ratings. Can we each do the same for, say, attrition rates in our organizations? What’s the expected turnover rate for exempts vs non-exempts at your company? At what level is it out of line?
The next level is understanding how seemingly unrelated metrics influence each other. When attrition at our organization rises, what happens to time to fill? Maybe it goes up if the attrition in our organization is reflective of workers flowing out of our industry or geography. It could just as conceivably go down as attrition in our company reflects a trend of workers rotating quickly around a small set of organizations. Data-driven functions understand these second order impacts.
The point here is that there is a commitment required of us as leaders in HR to stay the course. It will take time and patience to build the muscles and data assets necessary to build a truly data-driven HR function. For now, most organizations must content themselves with being data-informed. Data should absolutely be present in the decision-making process, but it should be thought of as one data point to be weighed against many others.
Hiring HR Data Scientists
HR analytics is here, and the timing couldn’t be better. A recent study by IBM and Burning Glass found that demand for data science and analytics workers is soaring – with no slowdown in sight. The study found that an analytics manager position takes an average of 53 days to fill! That’s among the highest among qualified positions.
A critical element of this process is consistent commitment. Leaders need to wrestle with data on a weekly if not daily basis. There won’t always be satisfying answers, but trying to understand why attrition is trending up or offer acceptance is going down builds necessary mental muscle. Similarly, capturing more of the right data in the right way is paramount. Unlike marketing, we can’t A/B test strategies on our employees so the onus on quality data capture increases dramatically.
HR, more than any other business function, has the opportunity to leave an impact not just on their organization but the broader working world. Creating great experiences for employees, while simultaneously making our organizations more competitive, is possible when we integrate data into our decision making. To get there, we need to accept and embrace the process.
Andrew W. Mitchell, Managing Editor
Contributed by Trevor Teason, who leads recruiting analytics at Capital One. Trevor helps organizations leverage their people data to optimize their workforce and deliver a better employee experience.