How Data is Evolving Human Resources

The field of People Science is transforming the way that HR is practiced in progressive companies, and changing the perception and expectations of HR along the way, by showing how the responsibilities of HR can be quantified, improved and most importantly, correlated with business results.  Any competent Chief People Officer will have their own set of key metrics to monitor as well as preferred methods and platforms for integrating data into all aspects of their function.  Here we’ll take a look at three examples—recruiting, compensation and company culture.

Recruiting. Strong recruiting leaders led the way with use of analytics to drive success, for a couple of reasons.  First, the nature of recruiting is measurable in several obvious ways (from traditional measures like time-to-fill and cost-her-hire to more sophisticated data such as candidate pipeline progress, interview scores, and experience/performance correlations).

Second, business leaders will frequently recognize the value of a strong recruiting function, and fund it accordingly, earlier than they will put significant budgets on other strategic HR initiatives such as organizational planning or leadership development.

When it comes down to it, you can view recruiting as really a pure application of good data—if a company sets a goal of increasing certain hires by x amount, they can measure past performance, apply those metrics, and simply set the necessary resources against it almost by formula. The challenge is first just creating a system and process that collects this data reliably, but once you achieve that the rest should follow.

Compensation: This is the big game for HR professionals obsessed with data. The data itself is plentiful through comp surveys and data providers, and thoughtful experienced application of data can provide many also-quantifiable results for a company’s HR team, such as increasing retention and job satisfaction, rewarding performance, fairness of pay and commitment to diversity, hiring effectiveness, and more. The people scientists in most small-to-midsize organizations reside within the compensation team, but their expertise benefits the company and its employees in many ways beyond just compensation itself.

Culture. Most people will intuitively see this as the last quantifiable thing about a company—something important but also intangible, a set of qualities that can be surmised through a casual and unstructured conversation (often referred to as the “airport test” or “elevator test”). In fact, through tools like company surveys, manager assessments and exit interviews, coupled with basic psychology and a real commitment to authentic and values-driven culture, you can replace cultural bias with real facts, and develop a strong set of metrics that will drive your culture and your business results.

Smart use of data can impact every area of Human Resources, and enables HR leaders to represent themselves and their work in a quantifiable and results-focused way, just as marketing, operations, finance and other business executives do.   A strong data analyst is one of the best hires a VPHR can add to their team, but it’s also important to hire HR professionals that understand and embrace using data to measure and advance their work—that’s how the strongest people leaders are now building their teams.