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The Business Case for Data-Driven HR

Nadeem R Khan

By Nadeem Khan - Managing Director, Optimizhr.

The challenge today for HR is to create a business case for Data-Driven HR that ensures a buy-in from the variety of stakeholders within an organisation. This article summarises some of my key insights after attending the People Analytics World 2018 conference held in London this April. Europe's leading conference on HR Analytics, Workforce Planning and Employee Insight hosted some of the leading practitioners and academics in the field of People Analytics: Bernard Marr, Peter Cheese, David Green, Max Bloomberg and Laurie Bassi to name but a few.

The core theme revolved around the vast amount of big data available now at the fingertips of organisations to gather and analyse, and how this has disrupted the current role of HR. Today, everything we do creates a digital data footprint, from our mobiles to credit cards. When people talk about big data, they refer to the collection of a variety data points, as well as the ability to gather insights from this data and use those insights to our advantage, particularly in a business context. What is needed today is for part of the HR function to mature into a People Analytics team that can support organisations in making more robust, analytical and data-driven approaches to improve organisational performance. The challenge for HR is to take the leap fowards and make the business case for Data-Driven HR. I have set out below a way forward for HR teams to be able to take this leap.

I. Strategy:

First and foremost, it is important for HR to have a clear understanding of the overall organisational strategy. HR needs to not only map out a clear link to its data strategy, but also demonstrate how HR will contribute to achieving the objectives set out in the business strategy through People Analytics. Hence, HR needs to outline its own data strategy with clear objectives and the data required to achieve these aims. People Analytics only works when it supplements the business strategy; this was observed by the majority of practitioners at the conference, most notably P&G, Swarovski and Nestlé, who shared their insights around how they link the people strategy to their organisational strategies. Therefore, A key component of an HR data strategy is its lineage to the wider business strategy. Furthermore, it is important for HR to be clear on what direction the organisation is travelling and follow suit.

II. Focus:

Big data is everywhere. It is important to think through the type of data that you require to fulfil HR objectives. To make good use of the collected data, ensure you decide its purpose. Data can be used for a variety of reasons; primarily however, it is used to make better decisions. In HR’s case, it can be appropriate for data-driven recruiting, retaining or developing talent or leadership decisions. Having a clear focus enables you to collect and analyse data fast without wasting a lot of resources. Collecting and analysing data involves costs; to keep these costs low, you must decide the focus and collect only the data that is required. Bernard Marr, Max Bloomberg and Peter Cheese all encourage HR to collect minimum data that ensures a tight focus, and this aspect also relieves compliance issues for the greater good.

III. Buy-in:

Finally, an important piece involves ensuring that this data-driven initiative is owned by the whole organisation. It is sometimes hard to break the status quo of a prevailing intuitive culture and introduce a data-driven culture. Nevertheless, it is HR’s responsibility to develop a plan of action outlining how a data-driven approach can enable the business to answer key talent questions. This should be inculcated in a succinct document aligned with the business strategy, a one-pager that highlights the immediacy of action. This document should highlight HR data-strategic objectives and how this adds value to the organisational objectives. Successful practitioners highlighted the importance of presenting such a document with a simplistic PowerPoint to pave the way, get people on board the idea and develop a solid business case for a data-driven HR.

Overall, having a strong data strategy with a focus on core objectives will allow HR teams to filter the noise that big data brings along. Success will be augmented when the HR data strategy is linked with the overall organisational strategy. Nevertheless, success is guaranteed when both the senior management team and cross-functional departments buy into the benefits of a data-driven HR system. Thus, ultimately creating a shared vision and promoting a data-driven culture across the whole organisation.

Any opinions, findings, and conclusions or recommendations expressed in this article are those of the author(s) and do not necessarily reflect the views of Tucana.