Building a healthy data culture for effective people analytics

It goes without saying that data is the lifeblood of analytics. Yet many organizations still struggle to aggregate data from disparate sources and maintain the quality of that data. This article looks at the mindset change that’s needed to embed a positive data culture in your HR team and build an effective people analytics capability.

A century ago, oil was the world’s most valuable resource. Now, data is the new currency for every business[1]. And for HR, with the number of organizations that use people analytics having more than quadrupled in the last few years[2], data has taken on a new significance.

Despite this, use of data and analytics in HR hasn’t developed as quickly as it might[3]. What’s needed, we think, is a change of mindset. It may take some time but, by taking a more data-driven approach, HR has an opportunity to make a more strategic contribution to business outcomes. People analytics provides a starting point for that journey.

Bringing discipline and rigor to your data management

Building a positive data culture is vital to helping HR people feel more comfortable working with analytics. While HR may need to bring in people with specialist skills to do some of the heavy lifting, there are four areas where it can begin to develop discipline and rigor around how it manages people and organizational data.

• Single version of the truth. Processing data in silos creates different interpretations that undermine the quality of insight. Instead, you need to aggregate data from all sources according to the same rules, format, and definitions.
• Data architecture. Collecting data from multiple sources should be systematized and ultimately automated. To ensure a good range of data from across the business, HR needs to foster cross-functional collaboration (see below).
• Robust results. To produce accurate reports that have strategic value and can influence decision-making, you must have regularly updated information in a common format with fewer errors.
• Frequent updates. Keeping your data up to date is a discipline that will help shape behavior and strengthen your data culture. Ideally, you want updates to be in real time, as this will build HR’s reputation for having its finger on the pulse of the organization.

Forming data partnerships: collaboration with Finance, Operations, and IT

To have broader business impact, HR needs to collaborate across the organization to gather data and standardize its collection. Your data culture should encourage this collaboration and emphasize diligence in aggregating and processing data.

In addition to the data from your HRIS, you’ll need to integrate financial, operational, and IT data into your analysis. Because if you want to influence organizational strategy, you need data from several sources, not just HR.

Benchmark insights into people analytics maturity

Earlier this year, we surveyed 300 HR practitioners in the UK and US on six components of people analytics excellence and compiled the findings into industry benchmarks using a maturity scale. The graphic below shows how the industry rates for capability in data management:

According to our benchmark findings, by the time your organization reaches the maturity mid-point, you’ll need to have at least above average data quality to get any further. You can get so far with inconsistent data, but eventually it will hold you back and erode trust.

Our findings also show that achieving a single version of the truth is persistently challenging for all businesses. Even more mature organizations struggle to maintain the integration and flow of data needed to produce high quality insights.

Going beyond discipline and becoming a trusted advisor

Building a data culture in HR will solve many of the challenges that arise with producing accurate analysis and insight. People analytics gives a glimpse of a new role for HR as a valued contributor to corporate performance.

Cross-functional collaboration and sharing of data will be crucial to achieving that goal. And by bringing in specialists from outside HR, you can alleviate any unnecessary pressure the team may be under, which will help drive confident behavior. Without a robust data culture, it may be difficult to reach an outstanding level of capability in people analytics. But more than that, beyond the discipline and rigor, there comes a point when you’ll need to do more with data and analytics if HR is going to become the trusted, strategic partner that the business craves.

[1] The Economist (2017) The world’s most valuable resource is no longer oil, but data, 6 May https://www.economist.com/leaders/2017/05/06/the-worlds-most-valuable-resource-is-no-longer-oil-but-data

[2] Deloitte (2017) High-Impact People Analytics https://joshbersin.com/2017/12/people-analytics-here-with-a-vengeance/

[3] myHRfuture (2019) Why is people analytics so important for HR? 2 October https://www.myhrfuture.com/blog/2019/10/1/why-is-people-analytics-so-important-for-hr

Read next…

The next article in this series of 6 looks at how to take your people analytics processes from good to outstanding. Processes are the glue that binds your people analytics practice together, and instils the confidence and trust needed to run a highly effective team. In this next article, we look at how you take your people analytics from good to outstanding by perfecting your processes.