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Why Evidence-Based Decision Making Will Grow Your Company

A business owner wouldn’t make a decision without looking at the data behind it—what do the sales numbers look like? How much revenue do we need to make in order to offset the decision I’m about to make? Does it fit into the forecast?

When folks discuss the role of HR, the first phrase to come to mind is unlikely to be “data-driven.” Instead, folks tend to believe that human resources focus on more human qualities: building relationships, promoting optimal communication, solving interpersonal issues, and managing career trajectories.

However, evidence-based practice suggests that functions of HR managers can – and should – be data-driven. The HR pros at a Professional Employer Organization (PEO) can help you work with data to develop best practices for your business.

But, human resource metrics and analytics were deemed the least effective area out of 23 different HR topic areas evaluated, a trend that has held stable for the past five years, according to a 2018 survey by Analytics in HR. They noted that this was due, in part, to the fact that most HR departments don’t gather much in the way of data, besides employee turnover rates, and even then, that data is spotty.

However, if HR departments were better at capturing and analyzing data, they could provide immediate and sustained value for their organizations.

At your company, it may seem like there are a lot of new faces around or empty desks—what is your turnover rate? Crunching the numbers can provide a clear picture of what the turnover is really costing you, not just in the knowledge that has left the company, but in financial terms related to the hiring, onboarding and training process.

Human resources can also use data to help improve retention—do you conduct an exit interview or survey to find out why someone is leaving the company? Analyzing this data can help you improve the company, have happier employees who stay with your organization and increase client delight. Reviewing what employees and former employees say about the company on sites like Glassdoor can also give a clear picture as to how you are doing when it comes to employee satisfaction and the recruitment process.

Data can also be used in very creative ways, such as finding talent, as Walmart did. They needed data analyzed and did not have anyone in-house who could do it. They found a crowdsourcing platform that specialized in data analytics and put a problem on it. They liked the results so much, they hired the person with the best solution to their problem and admit they would have never considered this employee based on their resume alone.

Another area where data-driven decision making should be leading the charge is the safety and prevention of work-related accidents. Using the Internet of Things, mobile technology and wearable technology employers can gather data about working conditions, such as employees who are overheating working outside in the height of summer, becoming fatigued or if drivers are fastening their seatbelts. Reviewing the information collected and taking action where needed will prevent injury while reducing time away from work and insurance costs.

Just looking at these areas—employee retention and recruitment and safety—through analytics can help save money while aligning human resources with the business’ long-term strategic growth plan.

Some data best practices include:

Consider Your Audience

Ultimately, who do you hope will benefit from this data? When you think about who will be reading the data reports, it helps to shape what types of data you should be collecting and how you should articulate the results.

Set Your Goal

What do you hope to gain from collecting the data? Why are you asking questions and what do you hope to achieve when you are done? As we noted above, considering who is going to benefit from your data is one way to narrow the field of focus, but fully understanding what you want to learn and what you want to do with the data narrows the scope further.

Pick Your Points

Once your audience and your goal have been nailed down, it’s time to think about what questions need to be asked in order to answer your question. Keeping it simple and focused helps you collect the data you need without watering it down to get the best results.

Work in a Full Circle

Thinking full circle can provide a clear picture of how your actions can impact others. For example, if you plan to make some major changes at your company, it wouldn’t hurt to survey employees before, during and after the change to see how it is affecting them. Be sure to ask the same questions each time to ensure you are comparing the same data when you are done. Employees are your best brand ambassadors you have, so you want to know how any changes you make are impacting them and their perception of your brand.

Show Results

If you go through the process of collecting data, don’t just put it in some report and stick in on a shelf. Use the information you collect to implement meaningful change. For example, if employees report they are not happy with the process to request time off, consider changing it—how can you make it work better for them? This increases employee satisfaction, makes them feel they are heard and will build loyalty. 

When you develop a relationship with a PEO, what you’re actually doing is creating an HR powerhouse that works smarter, not harder to help human resource professionals make data-driven, business savvy decisions to grow their businesses. A PEO takes some of the heavy lifting out of HR. It takes over those huge, time consuming or stressful projects, like compiling data, so that you can focus on the activities that are most important to you and your company – the ones that you want to keep in-house and under your control.

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