The hard truth about people analytics: Data isn’t the answer

That data thing? You might be doing it wrong. 

In the world of HR, one of the longstanding challenges has been adopting and utilizing data in a meaningful, high-impact manner.

So many of us in our HR careers have been told that the answer to this challenge is to measure things. When we do, then we’re told to measure more things or to measure them more often. 

“You already measure turnover? Well, here are five other metrics you should start measuring right away…” 

That’s no different than saying you can bake your favorite brownies if you just keep stirring them. Stir them faster. Stir them with different mixing spoons. Stir them in a different bowl. 

Wrong! They’re going to bake only when you put them in the oven. 

To bring this metaphor back to HR data, we’ll only have an impact when we use the data to create insights, get leadership buy-in, and tell a compelling story. 

The point of people analytics and HR data usage isn’t to collect. It’s to advise.

If the data you’re using don’t tell you something that aligns with one of these three areas, then it’s frankly a waste of time to collect it: 

• Stop: something we should stop doing because it’s creating negative outcomes or has no ROI. 
• Start: something we should begin doing because we believe it’s going to create positive outcomes. 
• Continue: something we should keep doing because it’s working. 

The hard part of people analytics is getting from a bunch of metrics and data points to a set of specific, decision-impacting insights. 

Our team recently completed the Lighthouse Research & Advisory Data-Driven HR Study of over 1,000 employers in an attempt to understand where HR teams currently are and what they need to improve their standing in terms of a data-driven approach (ping my team if you want a deeper dive into the data).

There were some positive elements and some that were chilling to say the least. Let’s take a look at some of the big takeaways from the research and how they can help your organization take a step in the right direction with people analytics. 

The 4 key components for data-driven HR success

Anyone can have a business-aligned, data-driven HR function if they have four critical elements in place.

Those four key elements: 

1. Leadership
2. Insights
3. Framing
4. Technology infrastructure

Let’s examine each of these four items and look at a few practical ideas on how to make them work.  

1. The right leadership

HR teams with fully supportive leadership are 50% more likely to say they balance a people-focused and data-oriented approach.

One of the most heartbreaking questions I hear when speaking at conferences or virtual events is “What do I do if my leadership doesn’t really support or believe in HR?” 

While some of you read that and think that it’s not possible, the truth is that there are HR teams struggling to add value and support the workforce without having real buy-in from leadership.

They either don’t truly see the value HR can provide beyond compliance or they don’t care. The end result is the same: a lack of interest and support. 

The good news is that the disinterested leadership group represents fewer than 10% of employers, according to the research study.

About six in ten HR teams say that their leadership is fully supportive. The other 30% have leaders that are interested, and that’s where HR teams have to lean in. 

See, leaders won’t be invested until they are interested.

HR teams have to capitalize on that interest in order to turn that 30% from merely interested to fully bought in.

One way to do that is to have a reputation in HR that you do what you say you will.

While that might sound “hokey,” it’s the essential foundation for a trusted relationship.

When I ran an HR team, my CEO’s favorite phrase was “tell me how we can, not why we can’t.” That requirement applied to all functions, not just HR, but we do have a reputation for being blockers of decisions for a variety of reasons. 

If we want leadership to support us, they have to know that we’re spending every ounce of our effort trying to streamline and align people, skills, and aspirations to the needs of the business.

That’s a foundation of trust that serves as a springboard for data conversations and usage. 

Practical suggestion: Several years back an HR friend of mine told me about an audit they did with their leadership team and some key stakeholders in the business. They gave them a scorecard to rate the HR team members on things like reliability, trust, and business alignment. It was a hard pill to swallow for some of those that didn’t score highly, but it also gave them clarity on where to invest their time and effort to repair those relationships.

Pro tip: make sure that the team members understand this is meant to be a process improvement exercise, not an indictment on them as a person!

2. The right insights

There’s a 39% increase in leadership support for HR data usage when the HR team is proactively aligning with business needs, not just reacting to incoming requests. 

Insights are different from data. 

Recently my teenagers were watching a true crime TV show. I asked what case the story was about. They began telling me about the policing techniques, the evidence, and other details. 

All of what they shared was interesting, but they never actually answered my question about the case! 

We do that in HR, too. We think that sharing numbers on turnover, training costs, time to hire, or other metrics are relevant and useful to our internal business stakeholders.

But sometimes we get that glazed eye look like I gave my teenagers halfway through their explanation of the crime show. 

Here’s an unpopular opinion: stop telling your business leaders about your engagement score. They don’t care. It doesn’t tell them anything relevant to their work. 

However, if you want to tell them engagement scores in context to safety, customer satisfaction, or profitability, then they’d likely be very interested to hear what you have to say. That’s the difference in data and insight. 

Tell them something that they can use, not just something that’s more noise that they have to filter through. 

HR teams should bring data that indicate a connection between the needs of the business and the needs of the people.

Don’t just report on training. Report on training and cross reference it with revenue impacts in revenue-producing roles.

Don’t just report on turnover. Report on turnover and its historical impact on customer satisfaction. By aligning those types of metrics with business needs, HR teams will have a willing, interested audience ready to hear what they have to share. 

3. The right framing

HR teams that don’t do storytelling well have an overreliance on turnover metrics to make their point. 

“If I can measure it, I can defend it. If I can defend it, I can monetize it.” – Paul Shane, Senior Director of Talent, REV Group

In the research, we saw that when HR teams struggled to tell stories with their data, they were nearly twice as likely to rely on turnover to make their point (compared to teams that were good at telling relatable stories with data). 

Not only that, but we also surveyed a cohort of managers outside of HR in order to understand their perceptions of HR’s data approach. There’s a perception gap: HR is 41% more likely to think they are great at telling stories with data than managers actually believe. 

It’s not enough to have evidence and data. Wrapping them in a story makes them more memorable, more relevant, and, ultimately, more actionable. 

Practical suggestion: Begin telling stories. Practice building the muscle of introducing a problem, building to a resolution, and uncovering the solution to the problem. This isn’t something that feels natural to many people, but like nearly any skill, it can be developed with practice. 

Unlike some types of knowledge which can be learned simply by reading or watching, storytelling is a skill best built through experiential learning.

Practice. Test. Try. Fail. And try again. It’s what our skill development research has shown for multiple years. 

4. The right technology

Having both support and technology infrastructure for HR measurement practices correlates highly with HR tech ROI (but having just one or the other doesn’t). 

“Your systems and processes are how you keep your promises.” – Nicole Eisdorfer, HR Business Process Optimization Analyst, Vail Resorts 

The promises we make to the workforce can’t be kept on whims and hopes. We need systems, processes, and strategies, as the quote above explains.

Within the realm of people data, it’s common to use spreadsheets as a starting point. However, the spreadsheet approach doesn’t work. It’s limited in scope at best and riddled with issues with data consistency and security at worst. 

For those employers using more modern analytics platforms, there’s a sense that turning on the system and plugging in data sources will lead to success. Unfortunately that’s not true.

HR still has to advocate. 

HR still has to use discernment. 

HR still has to lead. 

Yes, the technologies can make those parts of the job easier.

Spotify’s leadership said that adopting their system led to a rapid change: “almost immediately, transactional requests to the team stopped—no more ad-hoc requests for datasets, dashboards, or reports.” 

But that means that newly freed up time needs to be reinvested somewhere: stakeholder relationships, forecasting and scenario planning, training team members to be more data savvy, and so on. 

The systems add value, but they also create the opportunity for the people to add even more value through their work. 

Data-Driven HR is Both Possible and Probable with These Four Elements

At the risk of repeating myself, I’ll say it again: any organization can achieve a more data-driven approach if they begin to align each of these four elements outlined above.

It’s not necessarily an easy task, but then again most worthwhile things rarely are. 

And at the end of the day, success doesn’t just mean measuring and tracking. It doesn’t mean just using more data.

Like all great HR activities, success is about connecting the needs, interests, and capabilities of the workforce with the needs of the customer, ultimately creating more value for clients, the organization, and the individuals in the workforce making it all happen.