In the era of big data, most HR departments could be considered something of a gold mine.
From timesheets and recruitment info to contracts and performance data, there’s an endless stream of valuable employee information buried deep in your business – and bringing it all together is the key to unlocking HR’s strategic potential.
For many years ‘strategic’ has been HR’s desired direction of travel, and data holds the key in enabling the function to play it’s part in shaping business strategy and driving growth.
People data once helped simply to show what is happening in your organisation – such as staff turnover and absence rates. But today’s tools can be leveraged to illustrate why it is happening – therefore allowing you to predict what might happen in the future, and make better business decisions as a result.
Many businesses, for example, have adopted predictive analytics to forecast when staff are likely to leave – combining variables such as levels of pay, performance data, job function and location to profile employees and flag up those most at risk. And, when they are considered invaluable to the business, then taking steps to keep them – avoiding the costs of recruitment and training, and improving the bottom line as a result.
A reality check
Despite the clear advantages of people analytics, many HR departments just don’t have the accurate data to work with, as they are still operating with a mix of disparate systems, spreadsheets and paper-based forms.
You might have one system for payroll, one for recruitment, one for training, a timesheet system, another for leave and so it goes on. More often than not, these systems offer no integration or communication with one another – resulting in conflicting information, data inaccuracy and, crucially, no holistic view of your workforce. Without this holistic view, data can only be considered in isolation. Data that, when combined, could open the doors to a much deeper understanding of your company’s people.
Clearly, this is frustrating for both HR teams and leadership, as even the most rudimentary information is unavailable – such as an accurate headcount report. Only through a heavily manual process of data gathering and spreadsheet jockeying is such a report possible, but it is out of date almost as soon as it is ready.
Siloed HR information not only limits your ability to make strategic decisions, but it also causes data inaccuracy, a variance between systems and repetitive, laborious processes to keep everything up to date. As well as irritating your workforce, this hinders the production of these most basic of reports.
Historically, organisations have worked around this by developing their entire reporting strategy in line with the data, measurements and metrics most readily available. They would simply identify which operational reports could be pulled from the existing systems, and build a strategy from the bottom up.
In fragmented data landscapes, there’s often a considerable gap between the information available and the information really required to provide valuable business insight. As a result, it becomes the norm to report metrics of limited usefulness – and you continue to report them purely because that’s all you have.
If this sounds familiar, you’re far from alone.
Recent research by Forbes found that only 4% of companies have yet unlocked the capability to perform predictive analytics about their workforce – and just 14% of organisations have done any kind of significant statistical analysis at all.
The remainder of HR departments is, according to the research, still busy “trying to get out from under the burden of ad-hoc reports”.
It’s a common issue precipitated by a lack of unified HR data.
Finding a path to a single source of data
Moving from a disparate data landscape to a single master employee database provides the platform you need to transform your HR operations and drive the department’s strategic value.
It’s the first step towards ‘intelligent HR’ and the generation of genuinely valuable insights – such as being able to identify the best locations to find new talent, what type of candidate tends to stay longest, or how great the correlation is between pay and performance.
Of course, unifying your data also means a reduction in HR admin. And while migrating data into one, single ‘master HR database’ may seem a painful prospect in the short term, once complete, you’ll be able to devolve responsibility for record maintenance to the wider workforce through self-service functionality.
Better for you, better for your employees. But how do you go about building this master database?
Step 1 – Identify your best data sources: The starting point is to identify all the core sources of valuable employee data in existence across your organisation. These might include timesheets, employee contracts, recruitment data, training records, competency frameworks, expenses claims and more.
Step 2 – Start with your most accurate sources: Next you’ll need to assess which of your information sources are the most complete, reliable and accurate – and for most organisations, that will typically be payroll data. So this is normally the best place to start. Payroll data tends to be the most accurate, not least because employees are quick to address errors if their pay packet doesn’t appear on time.
Step 3 – Migrate key data into a comprehensive database: Next you need to map out all the fields you want in your master database and pull in the data from your most reliable sources. It’s important to set standards and rules to ensure data integrity, especially when dealing with conflict, duplicate data.
Step 4 – Get everyone on board to move to a single system of record: It would be pointless going to all this manual effort without having an integrated HR system to maintain your master HR database going forwards. But you’ll need to get anyone who holds HR data to use the same system to maintain this single version of the truth dynamically, rather than manually.
If your HR department is still living with disparate employee data sets, strung out across multiple systems and spreadsheets, you’re limiting the potential of both your department and the information it holds.
Consolidating your data sources can be daunting, but the creation of a single employee master database is a critical step in moving your HR team forwards – laying the essential foundations for you to create more value for your business.