4 Keys to becoming a data driven HR leader

You have plenty of trended data on employee performance. You have a cutting-edge dashboard and seamless reporting capabilities. This makes you data-driven, right?

Not quite.

Optimizing your decision-making requires more than retrospective analyses. It takes shifting from knowing how long employees have worked for the company to forecasting the likelihood that they will stay and identifying the criteria that most influence their retention. It takes building the capability to identify and quantify hidden patterns in the data that yield prescriptive recommendations.

To be data-driven, HR leaders need predictive, forward-looking insights from both their internal and external partners. They also need rigorous analyses that transform descriptive data to account for different factors. They need the right analytics.

This is especially true if HR leaders want to find themselves among the ranks of strategic decision-makers. With the right analytics, leaders can ensure that HR decision-making not only aligns with big-picture organizational goals, but also drives those goals.

Here are four ways that HR leaders can look beyond descriptive data to create a culture that is actually data-driven.

1. You need to link HR initiatives to business outcomes.

Knowing that 60% of employees have improved their internal customer satisfaction scores since last year does not tell you what drove the improvement or whether a certain performance initiative was effective and worth the investment.

Descriptive data alone do not equip HR leaders to draw hard-and-fast conclusions or establish the best course of action.

Worse, descriptive data can sometimes mislead HR leaders. Unaccounted-for variables — especially coupled with the inherent biases of decision-makers — can conceal the stories behind the numbers. As a result, leaders can easily deduce incorrect drivers for issues or apply faulty interventions to deal with them.

For example, an HR department that implements analytics-based hiring for midlevel managers might not see substantial improvements in team performance within the first six months of the initiative. However, these HR leaders could discover with rigorous statistical analyses and forecasting that the intervention is positioned to not only increase employee performance but also fortify employee-manager relationships.

2. You need to be hypothesis-driven.

Many well-intentioned HR leaders determine which metrics and analyses matter by simply referencing the standard reports that come with their licensed reporting platform.

This narrow focus dramatically limits the usefulness of HR data. Rather than running the standard analyses at their fingertips, HR leaders should step back and ask themselves, “What are the major questions I need to answer? What pressing problems do I need to address?” The answers to such questions should determine which analyses HR leaders run.

Put another way, HR leaders need to be hypothesis-driven. They need to pinpoint their problems first, generate hypotheses about the potential causes of those problems and then run the appropriate analyses. This strategic investment up front will pay dividends in the long run, as leaders find themselves with powerful predictive insights that solve specific business problems and promote business goals.

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