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Companies not using HR data for business decisions, says study

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Only one in three companies use recruitment and employee data to drive business decisions, despite evidence it helps firms outperform rivals 58% of the time, a global study has found.

More than 90% of companies collect employee performance data, but only 51% use it to improve talent acquisition efforts, and 32% do not examine employee data in any way.

The report, Counting Success: How metrics & measurement correlate with business success, surveyed 380 HR managers and directors at more than 300 companies. It was carried out by Alexander Mann Solutions and the HRO Today Institute between May and September this year.

The most commonly collected data looks at employee performance appraisal ratings (73% of respondents), new hire retention (55%) and customer satisfaction (50%).

Companies least regularly collect data on the speed at which new hires are promoted (13%), the time taken to bring recruits to full performance (12%) and profit generated per employee (24%).

“For one of our retail clients we saw a £2 improvement in average spend per transaction using predictive analytics. With 40,000 to 50,000 transactions a month per store, the link to the bottom line can be significant,” said Jerry Collier, global director at Alexander Mann Solutions.

Companies that fail to measure data effectively cited several barriers. They include inadequate IT systems capable of collating, analysing and ensuring the consistency of data across geographies and business divisions; limited resources in the HR function; and a lack of accountability and discipline in execution.

“Our research demonstrates that even companies that may have a culture of disciplined data analysis do not necessarily have the boardroom backing to integrate that practice into their talent acquisition and management processes,” Collier added.

“However, those that do are reaping the benefits and winning market share in their industry sectors.”