HR operates in an increasingly data-driven world, with opportunities in recruitment, retention and beyond. But to realise the true potential, many leaders must upgrade their resources.
Data-driven HR relies on capturing, analysing, and using data to improve an organisation’s decisions on everything from recruitment to employee engagement, compensation and skills development. Done correctly, HR data can deliver faster recruitment, reduced staff turnover and improved levels of employee competency and engagement.
Today’s HR organisations have a massive amount of data at their fingertips. However, they don’t necessarily have the skills or resources to use it, says Ben Eubanks, chief research officer with human capital management analysts Lighthouse Research and Advisory. “There are very few data analysts in HR,” he says. “But by focusing on a narrow set of traditional HR metrics you’re limiting yourself to a pencil sketch, when you could be looking at full HD.”
Many HR teams have upgraded virtual recruitment during the Covid-19 pandemic, replacing interviews with data-based recruitment assessment tools. Applicant Tracking Systems (ATS) automatically collect, sort, scan and rank online job applications, and can provide HR teams with access to data like applicant demographics, source of applications and time-to-hire.
This means HR organisations can determine which channels bring the best results and allocate budgets more effectively. One such user is IT services firm Logicalis Group, which is rolling out the Workday HR platform globally, replacing several smaller ATS products used in different geographies.
Accessing global HR data is hugely beneficial in a post-Covid world, says Justin Kearney, the company’s group senior vice-president for HR. “We’ve learned during the pandemic that many roles can be completed remotely, so that allows us to open up recruitment to cross-border applicants and remotely assess applications,” he says. “Having access to better HR data in recruitment means we can target different geographies where we know skills are more readily available.”
HR data gives global auditing company Bureau Veritas a strong competitive edge in both recruitment and retention, says Trent Cotton, the company’s vice-president of talent acquisition and retention. Cotton’s team faces a range of challenges in recruiting qualified inspectors, including growing competition and an ageing talent pool, with many of the company’s inspectors recruited after retiring from other firms.
Cotton highlights first year turnover rate as an important piece of data. “If we can identify the quick quitters that data can be combined with ATS data, so we can see where those people came from and understand if it’s the hire source that’s a problem or whether there’s a manager issue we need to address. Ultimately, it helps us retain people better and hire better.”
As HR teams build data skills there’s potential to use more sophisticated data tools to gain greater insights, notes Eubanks. “We know most HR departments use something like an ATS, but true data-driven HR means pulling in data from other systems to understand the complete employee journey,” he says.
UK retailer Next Online is working with Arctic Shores to provide data-driven recruitment insights from a neuroscience-based assessment that captures 12,000 data points about applicants and distils them into scores for 35 different personality traits.
This data is mapped against a role description and used to rank candidates. When combined with ATS data it gives a fairer, more accurate recruitment process.
At the start of the project, Next’s HR team couldn’t understand why so few women were identified as preferred candidates for technical roles using their existing recruitment data. “Once we used our assessment to score candidates and mapped that data against the traits the job actually required, the number of women identified for one role jumped from 0 to 20 out of 120,” says Robert Newry, CEO of Arctic Shores.
Eubanks thinks the real potential of data-driven recruitment isn’t just tracking current HR activities; it’s anticipating future requirements and business challenges that will drive HR strategy in future. “We need to get to a place where we can use HR data to improve our ability to predict future business needs and make better strategic decisions,” he says.
At Logicalis, employee listening technology from Peakon is used to continuously measure employee engagement. The Peakon data is combined with ATS data to provide insights into likely staff attrition. “We can predict by location, team and function and that data feeds into recruitment plans,” says Kearney. “It’s a bit like the Minority Report of HR, but I think it has the potential to be a game changer.”
At Bureau Veritas, Cotton is using Google Data Sheets to pull data from various HR applications and to share real-time dashboards with colleagues. This is a low-cost way to put key HR data in front of colleagues and helps raise the department’s profile, says Cotton. “It can show things like future likely expenditure, turnover and so on. That data is really meaningful to my colleagues,” he says. “I think sharing data across the business is pivotal in creating transparency.”
First, though, organisations must address the lack of data analysis skills in many HR departments - an area where the profession hasn’t traditionally excelled. Eubanks advises that HR leaders take a “build, borrow, buy” approach to developing data skills. “It may be that you have a team member with a natural bent for data and you can upskill that person, or you might find someone in operations or finance who can devote some time to working with HR data,” he says. “If that fails, recruit someone with appropriate data analysis skills.”
According to LinkedIn, there has been a 242% increase on the network of HR professionals with data analysis skills. Logicalis says it is actively looking for HR data specialists in more mature markets.
Cotton says incorporating more data and data skills is a top priority for his team. “I love numbers, but a lot of my colleagues are statistics-averse. We are going to have to be more number-informed, because it blows my mind how much information HR has and they don’t do anything with it.”