Tuesday, September 27, 2011

Data Based Decision Making: HR You're Up

I have noticed a by-product of the recession is the way C-Level executives make decisions. The decisions can be about investments, people, markets, pricing, marketing, well just about anything. I believe the reasons for this shift is that the C-Suite is a lot more risk adverse than pre-recession. Gone are the days where decisions are made by "gut-feel" and "by the seat of the pants."

Boards of Director's and consumers have demanded more and more fiscal responsibility and ethical behavior.

What does this shift mean to HR?

1) HR must be able to make a business case for people related investments. Just as marketing outlines it's expected ROI for marketing related spends, HR must do the same thing. For example, if HR proposes organizational wide training, what is the expected return in terms of sales, productivity and performance.

2) HR needs to get its HR data house in order. Historically in HR we have stored data in many disparate systems. I see this issue is changing with talent management systems that integrate many HR functions in one platform. Data also needs to be standardized across platforms so that analysis can be performed. One more issue with the data..it needs to be clean. Data integrity and data entry standards must be addressed.

3) HR must perform analytics on its own data. I know I beat this drum loudly and I know I have a bias to action in this arena. However, we HAVE to provide insight to our C-Suite when it comes to people related data and information. In most service related companies the people spend can be 50-80% of budget. So, understanding how that spend is performing is crucial information our C-Suite needs and wants.

4) HR must make decisions based on data too. HR has been guilty over the last few decades of using gut feel to make HR related decisions. I "feel" like we need a wellness program instead of "if we implement a wellness program it will save $500K in insurance expense per year and only cost us $250k to create."

So, what are you hearing and observing regarding data and decisions? Is your leadership team asking for more or less data? What are you doing about it?

Image source: http://www.funderstanding.com/v2/gurus/decision-making-and-right-brain-left-brain/

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