There are tons of benefits you can achieve from processing the data you get from your teams’ daily activities. The challenge is in finding the way to do that in the most productive way. This guide focuses on the types of data the HR dept collects, how to go smoothly through the process of collection and use the effects for the company’s benefit.
Big Data has introduced a new way of doing business, based on large volumes of data mined for insights and guidance toward greater revenue and reduced costs. This goal can be achieved in HR also, not by replacing the empathy-based approach but by augmenting it with quantitative data.
This text covers:
- The basics of data-driven HR and its advantages – see how you can apply the best practices in HR by leveraging the data you have
- Types of employee data HR processes and stores – Never get confused with the data you collect and impose new, great order in them!
- Collecting employee data best practices – don’t waste your time on doing research and get the knowledge pill about best practices and ways to go
What is data-driven HR?
Rebuilding the HR using the data insights is the logical consequence of big data transformation in the company. It is all about using the owned and gathered data to optimize the workflows and spot new opportunities. According to Google data, highly data-driven organizations are 3X more likely to report significant improvement in decision making.
The pursuit of good decisions is also seen in HR departments, leading to a data-driven HR culture. Yet this remains a challenge – according to the PwC study, 39% of companies struggle to implement HR data analytics and mine for insights, with antiquated employee data software being one of the key reasons behind it.
Advantages of data-driven HR
The data-driven HR comes with multiple benefits rooted in traditional HR goals. The data-driven approach:
- Delivers a comprehensive picture of your human resources – with the data gathered and processed, the company has a comprehensive and holistic view of the human resources available in the organization. It is not only about the sole existence of a particular talent but also the performance, availability, and flexibility of a particular specialist. By that, it is much easier to come up with a reliable strategy and improvements.
- Identifies trends in time – processing the data in time allows the company to spot the trends in employee behavior and leverage them for its benefit. This can be done by either preventing or boosting the outcome. For example, the HR specialist can reduce employee churn by filtering the employees most likely to drop out and initiating preventive means.
- Delivers clear information about gaps and opportunities – having a certain number of employees available is one thing. On the other hand, people have various levels of productivity and motivation. Also, this specialist can have multiple visions of their professional development and, by that – can shape their skillset in different ways. Having this information stored and processed, the company can either spot the opportunity or mitigate the risk of growing the skill gap in the team.
Apart from the benefits listed above, data-driven HR also reinforces the processes done in the human resources departments on a daily basis, including candidate sourcing, onboarding, or offboarding.
Yet the first step toward building the data-driven HR processes in the company is gathering a deep understanding of the employee data
Types of employee data
Contrary to the data from the production or marketing departments, the data stored by the HR department comes in various forms and requires multiple levels of protection. Also, the company stores and processes it even if the level of making data-driven decisions is currently far beyond its reach.
The most common types of data that are seen probably in all organizations in the world are:
Personnel information
This type of data is the most basic level of information processed, and it is usually enforced by local legal frameworks to make employment legal. These compose of personal details, including the full name, address, and contact information. Also, the employee file needs to include:
- Employment details – the company can work with specialists using multiple types of contracts, from full-time employment to freelance cooperation to part-time agreements of all kinds. The contract also specifies the employee’s scope of work and the benefits one has access to.
- Timesheets – this data is vital for the company. In some legal frameworks, including the US and the EU, it is obligatory to store information about the hours worked by the employee to either have a basis to pay the wage or to protect the employee from abuse.
- Time-off requests – depending on the country, there are various numbers of time off daysyearly, either paid or unpaid. Also, the number can vary depending on the type of employment or years worked. Last but not least, it is obligatory to store the time off requests and show compliance.
- Salary – last but not least, the company stores information about wages and how they change over time. Some companies consider this information classified, while others are open regarding the pay range of a particular position.
Performance
The HR department also stores information about the employees’ performance and how their relationship with the company changes over time. These include:
- Survey data – some companies consider it valid to ask the employees about their attitudes toward projects and their managers. Also, the company can check the overall morale of the teams and spot suspicious or worrying trends.
- Feedback information – quite the opposite of the above, the company also stores the information that comes from the organization to the employees, usually in the form of written feedback notes.
These data, when combined with production data, come as a powerful tool to get a comprehensive picture of the company’s workforce’s overall condition, especially when it comes to the mental and moral aspects.
Background information
The last type of data is about all the non-vital elements of employee life that can influence (sometimes dramatically) his or her work performance.
- Family-related information – companies may sometimes ask about the employee’s marital status or about children one has. This can be either useful from the legal point of view or provide the employer with some information that can be used in employer branding. Sending a birthday gift for one’s children is always nice. Also, it is common to include family members in various benefits, for example, private healthcare.
- Medical and disabilities information – this information can be either obligatory to store (for example, the disabilities-related information) or vital from the compliance point of view. For example, in some legal frameworks, it is illegal to lay off a pregnant woman. Also, if the company (or a law) requires the employee to provide the doctor’s note on the reason behind the paid time off, the note also counts as medical information.
This type of information is rarely used in data-driven HR. Also, considering the form it takes, it is rarely actionable.
How to collect and process the employee data
Some data, like the full name or contact information, is pretty obvious to be collected. Other types, like time logging or performance checks, can backfire when handled improperly. By that, the company needs to initiate the data collection in a proper way:
Be transparent
The employees shouldn’t be surprised that the company is measuring their performance. Quite the opposite – the metrics and measures used to validate employee performance should be transparent and fully available.
The metrics and the measures mentioned above should be included in the publicly available company policy. By that, the employee may have comfort in everyday work and a feeling of security if the work is done properly.
Be secure
The software used to process employee data and transform it into actionable insights needs to be as secure as possible. The records in the HR employee database include sensitive information that can be devastating if used by malicious actors.
Choosing a trusted software partner like Calamari comes as a good way to ensure the highest standards without compromising the ease of use and availability of the software.
Another way to ensure the security of stored information is to audit the security of the database on a regular basis. Regular auditing and stress tests are one of the benefits of using trusted partner software. It is basically not the company’s headache to do so.
Be compliant
Last but not least, the employee data needs to be stored and processed according to the legal requirements. This comes as a challenge, especially for distributed and decentralized teams. To keep the compliance, the company needs to take into account:
- International laws – this includes, for example, the GDPR that regulates the rules of processing the personal data of EU-based citizens, including employees.
- Local laws – apart from international agreements, the company needs to take into account the local mutations of personal data protection laws. Apart from the personal information protection regulations, the system that stores the employee data needs to be compliant with local employment laws and sometimes other regulations one can consider surprising.
Sumarry
Employee data can be rocket fuel for the company in the same way that production or marketing data is. The key difference is that the data in HR is about people and can reflect real-life dramas, joys, or challenges that shouldn’t be simplified to mere numbers and indicators.
And that’s why a skilled and empathic HR specialist is priceless.
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