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How Data Is Changing HR Practices

June 08, 2022 Information Management
Mark Feffer
By Mark Feffer

We’re getting close to the point where we can say data is everywhere. It's already in our work, in our home, in our cars, where we go on vacation or when we stop for a cup of coffee. This didn’t happen all at once, though. For HR, some might argue that it happened in fits and starts.  

It's been 15 years since the term “people analytics” was introduced at Google. And while it wasn't created by Google per se — having been traced back to Frederick Taylor at the turn of the 20th century — it didn't take on its current meaning until Google stepped in.

But still today, as companies double down on their data and technology strategy to compete with the digital behemoths, few understand what they're collecting or what to make of it.

Looking Beyond the Tool to the Goal

There's an old adage that says, "No one wants a drill. What they want is a hole." It's been adapted through the years, but no matter the variation, the gist remains. What tool you use to accomplish something isn't as important as the the end result you want to achieve. 

“If I wanted to pay someone in the old days, I’d have to get my wallet because that’s where the money was,” said Joe Kleinwaechter, vice president of global UX for Roseland, N.J.-based ADP in a recent podcast. There were no bank transfers, ACH or Venmo. But that didn't mean people wanted a wallet, Kleinwaechter said. “They wanted to go get a cup of coffee at Starbucks.”

Data is, in very simple terms, yesterday's wallet. Companies collect data not for data's sake but to derive something from it. Starbucks was quick to recognize how data could change its business. Loyalty cards, for example, swapped rewards for information on purchasing, product preferences and frequency of transactions. The same potential is now showing itself in talent acquisition and HR in general.

In his role for ADP, a payroll provider, Kleinwaechter goes beyond how employees look at their pay to try to understand what employees want to do with their pay. “Are they trying to figure out if they have enough money to pay something? Or better yet, maybe they have some ambitious goals to try to accomplish, and I can help them along that way,” he said.  

Related Article: Extending Data Science Skills Across the Organization

How Data Is Changing HR

The approach laid out by Kleinwaechter maps neatly into the HR function. For example, at San Mateo, Calif.-based software company Talview, CEO Sanjoe Jose said his team goes beyond facilitating end-to-end transactions and instead uses AI to pull insights from each part of the talent acquisition workflow to help employers predict which managers will be their best interviewers.

“A company might, for example, build a behavioral profile of a candidate based on an interview that happens on the platform and becomes an additional input for the interviewer to make a decision,” Jose said.

An increasing number of employers are turning to data to improve their understanding of everything from the candidate pool to an established employee’s flight risk. And, of course, the development of people analytics tools isn’t slowing down.

“We’ve accelerated our pace in terms of how we are delivering, especially with more digitization,” Jose said. “There’s more data and more intelligence that we can deliver for our customers.” 

Data still offers much potential for talent acquisition and HR, and practitioners know it. A study by LinkedIn found that between 2013 and 2018, the number of HR professionals listing data skills on their profiles increased threefold.

Related Article: 3 Ways People Analytics Technology Is Evolving to Meet the Moment

Find the Data That Is Most Useful to Make Decisions

That's not to say that data is the answer for everything. The danger is the more data you have, the more potential you have to become confused. The point of collecting data should be to provide a starting point for decision-making and a base line for developing and testing new approaches based on real-world insights. The way to make data digestible and useful is by ignoring most of it, Kleinwaechter said.

“I know that sounds kind of contrarian, but you could get absolutely awash in all of the data,” he said.

For example, data can inform HR about how employees use an app and what they do with it. The best data is that which follows users doing what they want to do. Data can also help organizations plan and improve processes. For example, an analysis of call center data could provide insights into why people are calling but also why they're not calling. Understanding customers' behavior is key to taking action that is rooted in fact. For HR leaders, the same logic applies.

“People analytics is really taking the old challenge of people management and better understanding your organization, and applying data to it,” said Ian White, CEO of the Port Washington, NY-based data company ChartHop. “If you can share data easily through the organization, in a way that the right people have the access to the right data, at the right time, you could actually build more transparent organizations, more aligned organizations and, ultimately, more inclusive organizations.”

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