HR data is a considerable performance driver and can play a key role in companies’ transformation. However, harnessing its full potential requires a data-driven HR strategy. How do you establish it? Here are five tips for implementing an effective data-driven strategy in your company.
1. Define a framework
Implementing a data-driven HR strategy requires a certain amount of preparation, to avoid jumping headlong in the wrong direction. The first step is to define a framework to specify the main orientations.
→ Take stock of the situation
First and foremost, it is important to list and determine what HR data the company already has, as this will serve as the basis for the implementation of the data-driven HR strategy. The team in charge of the project must therefore identify the type of data available and where it is stored. This inventory serves above all to raise various essential questions: Is the data in the right place? What kind of additional data do we need? How do we interconnect it? These questions help to define the framework and guide the process.
→ Align the choice of HR data with the company’s strategy
The HR data selected to feed the data-driven approach must reflect the company’s priorities and overall strategy. The most commonly used HR indicators include data relating to the workforce (gender ratios, population pyramid, turnover, etc.), performance indicators, salary comparisons, data relating to training or skills. The company’s line of business often determines its strategic issues – and consequently which HR indicators are to be used.
2. Cascade the strategy throughout the company
One of the keys to an effective data-driven HR strategy is communication. Implementing a data-driven HR strategy should not be seen as an additional project on top of the others already underway, but rather as a company-wide cultural change. It is about instilling a true data culture within the company. But such a transformation requires ongoing management, particularly to keep the workforce fully informed about the process. The idea is to make employees aware of the challenges of the data-driven HR strategy, by explaining, reassuring and helping them overcome their possible preconceived notions and biases. Better informed teams are also more likely to commit to the process.
3. Structure the data and interconnect it using a digital solution
All HR data – whether on training, skills, employees, jobs or anything else – must be consolidated and stored in databases, where it is cleaned and sorted. To extract the most out of it, this data must then be analyzed by digital solutions that make “make it talk”.
If your company already has interfaces or software containing HR data, you can use APIs to connect it all (even from different software) and to bring it together in the same solution, where you can mine it effectively.
4. Secure the data
HR data is sensitive because it concerns employees as a group and as individuals. It is therefore important to handle this data with care and to guarantee its security and confidentiality. Indeed, there are laws governing its use, including the EU General Data Protection Regulation (GDPR) introduced in 2018.
The issue of access is also paramount: HR data may only be accessed by those who are authorized and entitled to do so. APIs are particularly relevant in this respect, as they generally apply advanced authentication systems.
5. Make the most of HR data
To fully leverage the potential of data and make the data-driven strategy a real foundation for HR actions, the HR function must take a proactive approach.
→ Developing new skills for the HR function
For best data-driven results, HR teams must be able to read data and interpret it. It is therefore essential for the HR function to develop new skills: data interpretation, analytical skills, knowledge of data protection legislation, etc. To do this, the HR function can rely on data analysis experts to support and train them.
→ Implement a “test and learn” approach
A data-driven culture is established progressively. To ensure that it is built and consolidated over time, it is advisable to implement a “test and learn” approach, to correct flaws where necessary so that the practices become as relevant as possible to the organization’s challenges.
Illustration credits: https://www.istockphoto.com/fr/portfolio/marcovector