How to Make Data-Driven Human Resources Decisions

Your human resources department is one of the most important parts of your business, working to train and develop your people, recruit and onboard talented new employees, and establish the fundamental policies, guidelines and expectations of your organization. In the past, most HR departments were forced to make important decisions without the aid of concrete data, leading to many missed opportunities, embarrassing situations, employees falling through the cracks, and other consequences of poor (and uninformed) decision making.

In order for your HR department to be able to make informed decisions that will ultimately benefit your organization and its workforce, they need analytics and data that can be used as a guide. Access to reliable data is more important now than it’s ever been, and could play a massive role in shaping the future of your business. Your people are your most important asset, and giving HR the data needed to make the best decisions possible will keep them happier and more productive, plus prop them up for a successful career, ultimately allowing your business to thrive.

The importance of data in HR decisions

We all hold some sort of bias or make decisions based on loose information or our own preconceived notions. These decisions ultimately hurt organizations, as they aren’t rooted in anything except how the decision maker feels at the time. This can cause employees to (rightfully) feel like they’re not being appreciated or like their efforts are going unnoticed, hurting morale and giving employees little reason to feel motivated, especially with regards to improving performance or going the extra mile for the organization which is overlooking them. For this reason, it’s crucial that HR decisions be based on data and data alone.

Data-driven decision making in HR is more fair to your workforce, rewarding those who are taking the time and effort to achieve superior performance. Without it, it’s nearly impossible to determine the value of an employee, the impact of team members on your organization, their long term potential within the business, and the effectiveness of your workforce as a whole.

Data also allows your organization to improve productivity, showing you exactly what is and isn’t working and making it far easier to make tough decisions about your business’s human capital. This could mean introducing incentives and rewards to motivate employees to work smarter and more efficiently, improving approaches to work by enhancing communication or collaboration, or simply offering workers the tools needed to do the job faster and more effectively.

Another significant benefit to data is that it eliminates many unknowns about the future, allowing your business to better prepare itself for the road ahead. Data can alert your HR to risks like burnout and lack of employee engagement, giving you adequate time to prepare and begin mitigation as soon as possible.

What kind of data powers effective HR decisions?

It’s easy to say that HR decisions should be made based on data, but it’s much more difficult to nail down exactly what type of data needs to be looked at in order to power truly effective decisions on the HR level. When it comes to making data-driven decisions, there are many different datasets that should be looked at. Depending on the structure of your organization and the sector your business works within, some will inevitably be more valuable than others. Of course, in order to make the most effective HR decisions possible, your dataset needs to be diverse and should cover a wide range of KPIs and other metrics.

First, every organization needs to be measuring employee productivity. Productivity metrics will allow you to determine how effective your employees are, how they measure up to one another, what influences productivity, how much time is spent on various projects, and which tools are being used most frequently by employees. Visibility into employee productivity can show you how effective each of your team members are, allowing you to keep them engaged, reward exceptional performers, offer assistance to those who are no longer performing up to their previous standards, and prevent burnout.

Employee satisfaction is another critical metric which needs to be taken into account by HR, as it will directly impact employee productivity. Employee satisfaction data will determine whether talent is appropriately engaged in their current role, giving you a much better idea of who might have one foot out the door so you can ensure that they’re properly engaged and retain their talents for the long term to avoid them jumping to a competing business. Satisfaction also impacts employee morale, company culture, and how valuable certain team members will be to your organization over time.

Other important metrics that should influence data-driven HR decisions include things like absenteeism rates, which will show how engaged your employees are and how much time they might be missing as a result of burnout, stress, and lack of engagement. Overtime hours will make it easier to spot employees who may not be properly balancing a healthy work-life balance or who may be at risk of burnout. Conversely, overtime hours can also reveal which employees are willing to go the extra mile for the business.

Employee tenure lengths and turnover rates are also a good way to determine what your organization is doing right and wrong when it comes to talent retention and recruitment, making it easier to determine what will positively benefit the organization and make it a better overall place for your employees to work.

Some metrics may be more difficult than others to accurately measure. Important elements of what makes an effective employee like communication effectiveness, project delivery rate, overall effectiveness, industry knowledge and skill sets are extremely important to determining standouts within your organization, but are more difficult to measure with any accuracy.

How to acquire data needed for effective HR decision making

In order to use data to inform HR decisions, you need to be able to actually gain access to the data you require. Many companies make use of human resource analytics tools to analyze various aspects of workforce performance. These tools allow you to visualize your organization to more easily understand the impact of decisions across your business, see what’s working and what isn’t, and understand what drives your business or what may be holding it back.

HR analytics solutions allow you to track KPIs over time so you have a better understanding of how employees are performing, how engaged they are, what they’re succeeding at and what might be holding them back, and whether or not they’re a flight risk. Many of these tools allow users to set and monitor custom targets, forecast long and short term trends, and view the progress of organizational changes. They’re also very useful for determining the value of your human capital to the organization, technological value to your workforce, and much more, all of which will make it far easier to make informed decisions, prioritize important issues, and overcome the unknowns of running a business. A few examples of popular HR analytics tools include orgvue, Tableau, Visier, and Lattice.

One metric that should play a major role in any HR decision is productivity. Understanding how your employees are working and gaining visibility into their performance is crucial to making any informed decision about your organization’s most valuable asset. Prodoscore is the simplest way to measure and understand your people, offering contextualized productivity data about how effectively your team members are working, when and where they thrive or struggle, which tasks or processes may be tripping them up or taking up too much valuable time, how engaged your workforce is, and who is at risk of burning out or becoming disengaged.

Prodoscore takes the unknowns out of people management, allowing you to make fully informed decisions about employee coaching and development, improve employee retention, identify new and exciting opportunities, offer support to employees who need it, and reward employees who are consistently exceptional performers. It also allows you to offer increased flexibility to your workforce while still being able to hold them accountable, offering visibility into how effective your employees are when given increased flexibility, whether that means working from home, setting custom hours, or even just using a hybrid work model.

Gone are the days where making decisions based on anything other than data is acceptable, especially when it comes to your business’s most important asset. Your people are far too valuable, and deserve data-driven decision making at every level within your organization. Knowing what data should be collected and how to collect it will build a stronger, more satisfied, and more productive workforce, rewarding exceptional performers, giving assistance to those in need, and fostering a fair workplace culture which encourages all team members to perform to their absolute highest level.

Prodoscore is the easiest way to get started on making data-driven HR decisions in your organizations, offering contextualized productivity data that gives you increased visibility into employee engagement, empowers employee flexibility, and ensures accountability at all levels. To find out more about how Prodoscore can help your business make confident and informed HR decisions, get in touch with us today.

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