In Jan 2009, Hal Varian, serving as Google’s chief economist said “The ability to take data – to be able to understand it, to process it, to extract value from it, to visualize it, to communicate it’s going to be a hugely important skill in the next decades, not only at the professional level but even at the educational level for elementary school kids, for high school kids, for college kids.”
The last few years have seen an explosion in data-driven understanding and communication. You only need to skim the work in data journalism from the Guardian and infographics from Visual.ly to recognise how mainstream data has become.
Of course decisions have been data driven for years with ‘evidence-based policy making’ a mantra of more enlightened politicians. Even inside large organisations, Business Intelligence (the discipline and technology of harnessing data for business decision making) has had 2 decades to mature. Financial, pharmaceutical, engineering and digital media industries among many others are all sophisticated users of data.
HR only now seems to be catching on and I can think of a few reasons for the slow adoption rate:
1. Shying away from being proven wrong. In any drive to understand underlying reasons there is always the risk your original thinking was flawed. What if the data proves your well-trumpeted strategy has been wrong all along? What if it highlights gaps you are responsible for? I’ve seen this be a real issue in HR data as it holds a mirror up to the organisation. Transparency is not always being sought when many corporate agendas are at play.
2. HR data can be more difficult than most. The data is often hard to access, residing in multiple systems and rarely in an orderly format. Security and sensitivity is always a concern. HR data also has a property that traditional tools (such as Excel) find difficult to manage: the concept of a reporting line. Without reporting lines the entire organisation context is lost. Have you tried managing your reporting lines in a list?
3. HR practitioners tend not to be natural number analysts. This is a barrier I see often (with some admirable exceptions). Why do business and transformation consultants (who are often trained in analytics) always place their findings and recommendations in PowerPoint? You’ll never see them present their findings directly from their Excel models – they will put together a set of slides with coloured boxes to help make their message ‘consumable’ by their paymasters.
Here’s an easy way to see why.
Compare the immediate insight gained from this table:
|Region||Av. hire cost|
with the same data presented visually…
Since the launch of Apple’s iPhone there has been an explosion in easier to use, highly visual software. Tools such as Tableau have made exploring and understanding data much easier than with the Excel cathedrals of old. But even with these tools HR data still brings with it some significant challenges:
1. Access to it. Data is often locked inside difficult to get to computer systems and inconsistently stored across the organisation. Just getting hold of it can be a hurdle.
2. Even when available, its quality and provenance is not guaranteed. Reporting lines are out of date, it is fragmented and has large gaps in coverage. The available set of data is ‘messy’.
3. Hierarchies are important when considering organisations. The human brain will understand an organisation when presented as an org chart much more readily than as a table in a database. HR data is naturally hierarchical but many reporting systems struggle with hierarchies.
4. Can the available data answer the questions being demanded? Are you recording the data necessary? For instance you cannot know the cost of a capability to your organisation if you do not track and measure capabilities.
I’m guessing the majority of HR leaders are seeing an increasing demand from their execs, function heads and HR business partners for data. The demand is to show them some insight but even knowing total headcount is difficult, never mind exploring the best ratios of capability to roles.
Here are 3 things to consider as you develop a data curious culture in HR:
1. Demand data – put pressure on people to provide you with data. Go after the raw data from the original source. Get an extract from your HR systems, payroll, budgeting, talent management and workforce planning systems. Do not be afraid of too much data initially, find out what is available. Start asking questions, this will help you think of more questions to ask. You do not have to understand it all initially, just be curious yourself about it. [BTW: don’t take “we’re doing an IT programme that will give it all to you in a couple of years”, insist on getting hold of the data you have today.]
2. Get visual – the tools available for turning data into pictures are remarkable. Tableau, PowerPoint, even the latest version of Excel are all good. Look for ‘data visualisation’ tools online, some are free or available on free trial. Where possible, aim to link your data to hierarchies and display it this way, this will provide organisation context to your data. This means building org charts that can display relevant data against each role / person. The power of a visual representation of the problem or solution cannot be over stated.
3. Find out something amazing – this will really help cement and prove the value of looking at your data. Explore whatever data you can get hold of and follow your nose until you find something insightful. It could be anything. A great example comes from our client, Wakefield. They discovered a link between lost man days and the operational practises of a department. Once they saw the link it required the simplest and cheapest of interventions to resolve. I’ve seen execs stunned by an insight gleaned from the simplest of questions.