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How can HR use big data to inform people strategy?

The fact the recent HR Tech Europe Spring conference in London focused not on technology but on data tells you just how important the issue is becoming for organisations.

Why now? Because the volume of data, the velocity (speed at which it is created) and variety (of data points) are growing exponentially and the speed of technology adoption is accelerating significantly.

There are 1.8 zettabytes of data being produced a year – that's 1.8 trillion gigabytes – and this is doubling every two years. And we have 30% adoption of mobile in just five years.

Technology analyst John Sumser says the "scale and speed" at which data is being created requires HR to re-examine how it operates and, in particular, how HR teams make decisions.

For HR teams, data provides a big opportunity. By understanding broader business requirements and asking the right questions, HR teams can start to collect data that can show the impact of people policies and investment on the business.

And by analysing data over time HR will be able to predict future people needs and design and develop the right interventions before there is a problem.

Fortunately for the HR function, it has been collecting people data for many years so it is well placed to use this data to make better business decisions.

But simply owning that data doesn't mean it has value. Used badly, data can hide business critical information.

For example, aggregated people data – say absence rates – provides a company wide figure but within that there could be pockets of extreme high and low absence that would provide something concrete to act on.

In fact, digging deeper into data can reveal the most surprising – and potentially contrary – insights. Recent research from Leadership IQ has discovered that in 42% of organisations, low performers are actually more engaged than high performers. It seems counter-intuitive to say that your least productive performers are the most engaged – and it is.

Any business would hope their most productive performers were the most engaged.

It was only by putting together these two data sets – appraisal data and engagement data – that the research identified these new and startling insights.

The research goes against the perceived wisdom that high engagement correlates with better business performance. It also tells us that we need to be open to insights the data can provide.

If we are not, then the data becomes a threat. Can we reasonably base our decisions on instinct and experience alone only for the evidence to tell us something completely different?

No. HR teams must use data to provide evidence.

But first HR teams must get their house in order by taking the following steps:

  • Make sure the HR strategy is fully aligned with the business strategy. Only then can you start to understand where the people agenda fits in.
  • Look at the data you currently collect and see what insights it provides to support the business strategy.
  • Identify the gaps in your data, stop collecting data that is not useable and start collecting the data you need to help solve current and future business challenges.
  • Bring siloed information together to provide greater insight and value.

That may sound simple but it will take a confident HR director to say that some of the data they have been collecting historically has little impact on the business.

Director of the Centre for HR Excellence at Henley Business School, Nick Holley, says HR is quite possibly sitting on employee data that is not necessarily the data required to answer today's key business questions. He says HR teams will need to have self-confidence to admit that data collected in the past was not useful.

With an aligned HR strategy and clarity on the people data that exists, HR teams can start to find answers to pressing business questions and start to relate these to people issues.

By asking the right questions of the business the HR team can start to identify the data it will require to help answer them.

The upshot is that HR teams will need the skills and capabilities to collect, analyse data and share meaningful insights from it to help the business develop.

Those skills might not be available within the HR team but they are likely to exist somewhere in the business. So in looking to build big data capabilities, HR teams should consider who else in the business could help them.

Big data provides an opportunity to start small – working on individual projects – and build up. This in turn will enable organisations to build up data reporting capabilities.

These small steps now will lead to a significant impact on the business in the future.

Jeremy Langley (pictured) marketing and business development director, Lumesse