Data is good. It gives leaders and managers a logical base from which to make decisions. “Big Data” has become a buzzword as new tools are now available to tackle the tremendous wealth of data companies have about their organizations. However, it can seem intimidating when you hear of PhDs doing deep-dive analysis and modeling — in an attempt to not only understand “what is” but also to predict “what will be” and how to prepare for it.
Can a small company with 200 employees really do this? Are “HR data analytics and metrics” buzzwords that apply only to the big guys?
Visier hosted a webinar on the topic of HR Analytics and this question was asked by one of the attendees. The honest answer was that smaller companies don’t necessarily need the heavy duty analytics tools. What they can do is adopt the practice and discipline of using available data to help run their organizations more effectively.
What are the problems that smaller companies face when it comes to HR data? What are the basic practices that need to be adopted?
- Collecting HR Data – Problems: “We don’t track that item.” “It’s on paper.” “We use spreadsheets.” Collecting the data is important – even just for legal reasons. Managing in-house talent without hard data (skills, education, training, performance) is fertile ground for subjective decision-making, a proven de-motivator in organizations.
- Organizing HR Data so it can be useful – Problems: “The information is in a tall pile of papers in the back room.” “It’s in boxes stored on the back wall of the HR office.” “It’s all over the place: spreadsheets, payroll reports, timekeeping system reports.” “I don’t have the time nor the tools to organize my HR data.” Reminds me of my old college notes in boxes that have been sitting in my garage for over 20 years. Waiting to turn into museum pieces. Ok, nobody cares about my college notes. But family might be interested in 20 years of photographs collecting in 10 shoe boxes.
- Analyzing HR Data — Problems: “Where do I start?” “There’s so much data. What do you want to know?” Valid questions. I remember a co-worker spending lots of time creating graphs of this and that. We had just started collecting data, so the first graph consisted of two points sitting at the bottom left corner of the line chart. Just because some data is available doesn’t necessarily mean it’s important or that the time is right to analyze it. Think about what’s really important to the business at this time. Brainstorm over coffee with your Executive Team members. Share the potential of how HR data can impact the company. Do nemawashi. Now that you have an idea of where to start and what needs to be analyzed, make sure you make it to Item#4 below.
- Generating Actionable Insights – Problems: “Now that we’ve analyzed the data, so what?” This is where the rubber meets the road. Watch out for analysis paralysis. Make sure your objective analysis leads to specific actionable insights as well as answers to management questions such as “How did we get to this point, what needs to change?” “What’s your recommendation?”
Smaller organizations can adopt good practice and discipline with regards to handling employee information. Having the right tools will enable HR Managers to provide data-driven advice to COO’s and business owners. An HR database or an affordable HRIS for small companies is a worthwhile investment to consider. The HRIS can pay for itself with the cost-savings derived from better visibility into labor costs and benefits costs, for example. One employment lawsuit for alleged discriminatory practice can put a small company out of business. These can easily be avoided with proper documentation driven by HR recordkeeping discipline and practice.
If you are an HR Manager at a small or mid-size company, remember that your data is a valuable resource. In order to get actionable insights from it, you don’t have to be big. You just need to do it the right way.