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Why HR Leaders Must Base Decisions on Data and Not Instinct

Data is becoming more accessible and important to the HR organization, but they must know how best to wield it. 

The average HR department is sitting on a trove of data, but is struggling to make effective use of it. This is likely why, in a survey we recently conducted with Vanson Bourne, most HR executives (84 or 87%) reported making decisions based on gut instinct rather than data.  This is a somewhat surprising revelation. People data is extremely valuable. Organizations have been steadily increasing their investments in data in HR, yet struggle to apply it despite reporting having to make 75% more decisions related to workforce planning, development and costs during Covid-19.

HR has an opportunity to rewrite how organizations get work done. Even before Covid, organizations across the globe have been experiencing change at a quicker pace than ever before. The pandemic has acted as a catalyst for many businesses to accelerate transformations, while others have been forced into dramatic shifts of course. Many businesses today look different than they did a year ago, and forward looking leaders are seeking to define their vision for the near future.

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HR plays an integral role in these transformations. They help define the mandate for change: influence key stakeholders and lay the foundations which change is built upon, then ensure that transformation takes place in an aligned way across the business. That means, for example, aligning the skills, knowledge and experience of the workforce for the “now” but also using data to inform what businesses do next and how they organize themselves to successfully deliver on the future business model.

To achieve this, HR executives should be looking closely at data and asking themselves “what if?” What if they moved to fully remote in the future? What would productivity and culture look like then? What if they moved into a new market segment? Do their employees have the right skills and adequate resources to support that venture?  Using data, HR takes a leadership role in defining the future of the business. They work across the business with key stakeholders to show confidently, and in concrete terms what the impact of change is and how to accelerate its delivery.

Yet, despite the compelling argument for the power of data in HR, many organizations still struggle to use it for their benefit and admit this leaves them exposed. Some HR execs say they lack information while others say they have too much and many raise concerns about the accuracy of their data. In these scenarios they can feel paralyzed to act, resulting in 63% of organizations to prolong decision making.

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This hesitation has big risks. Thirty-four percent of respondents to our survey said that their hesitation caused employees to lose engagement; and 35% said it negatively impacted productivity – results that neither HR nor the business want to see.. Data enables HR to monitor the health of the organization and guide management to clearly see what they need to do to build the business of the future. Our study found that organizations who have access to the right information are more likely to make decisions, on average, a week quicker. Specifically, when it comes to organizational inefficiency and ineffectiveness, HR executives with the right data said it took 3 weeks to make decisions versus five weeks of those who said they didn’t have the right information.

Having the right data, visualizing trends and modeling potential future outcomes, moves HR from a group seen as reactive to business changes to one that partners with other business leaders to shape  priorities and plans.  In this narrative flip, HR  strategically supports business growth and performance first and has a strong voice in business decisions  early on. But having a strategic role in designing any type of workforce transformation hinges upon the ability to have the right level of conversation, which must be rooted in evidence and data.

We’ve Got Some Exciting Conversations for you On The SalesStar Podcast, Including a Special Guest Episode with Xactly and Salesforce. Hear More: