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/


Franny said...

Love this post! And I agree, we do store our info in many desperate systems, or at least using them makes us feel desperate. ;)

Keep it up Cathy, you're rocking our worlds!

Unknown said...

Thanks Franny...I always appreciate hearing from you. Hope you are doing well. I always get those two words mixed u disparate and desperate. I did it in class on Saturday talking about disparate treatment.....

Hope you are well and thanks for the kind words.


Anonymous said...

I am currently working to solve the issue of using disparate systems. What are HR professionals doing to solve this problem? We currently use Peoplesoft for HR, Finance and Payroll, and Supply Management. Replacing an ERP system is a major investment at a time that organizations are hesitant to spend it. Yet, executives are asking for the better analytics and metrics like you described.

Unknown said...

Thanks for reading and what a great question.

I have seen this approached two ways.

1) HR partners with IT and other functional areas to craft a business case for better analytics. Sales, marketing, customer service and operations are all areas that benefit from better analytics.

2) Analyze a business problem/challenge using data from all the systems the old fashion way, dumping data into excel or Access or some other repository and tell a compelling story. Get the C-Suite hooked on analytics and then the investment will be a no-brainer.

Hope this helps, would be happy to discuss further if you would like.



nhnndfkfd said...

Data bases are the most imortant sources of information for any organization and specificly the this data is use for HR department to make decision from top management to lower management...

Jobs in New Zealand