Managing the human capital is acknowledged as one of the most crucial factors in delivering true strategic value. Nevertheless, most HR departments are still falling behind in fulfilling a high business impact role. This happens partly because HR has not fully realized the immense benefits of transitioning to a data-driven approach and, thus, are unable to market the value of such a high business impact model to the C-suite. What follows is a list of the 10 most strategically meaningful reasons for adopting a data-driven high business impact model:
1. HR can gauge and boost its business impact through data analysis.
When HR is digitalized and data-driven, it can inform strategic decision-making on key areas like revenue, productivity, innovation and market share. This is also backed by recent research which revealed an increase in profit by two thirds for organizations using effective people analytics.
2. Data-driven HR functions contribute to enhanced employee productivity
Using analytics, HR can determine what boosts –or hinders- productivity across all job categories and use this data to capitalize on the factors which increase performance and thus boost the function’s business impact.
3. Data-driven HR is fast and adaptable.
Data allows HR to reach and hire individuals which possess these immensely valuable skills. Furthermore, it can determine how existing employees could become faster and more adaptable through the right training schemes.
4. Data-driven HR can boost innovation.
Data-driven technologies allow HR to create optimal recruiting mechanisms to attract, hire and retain the most innovative talent. This is precisely what top players in corporate innovation (e.g. Apple, Google) have been doing for years.
5. Data-driven HR is more likely to influence managers.
What data does is actually quantifying the impact of an investment and the extent to which it can add value. The C-suite always makes decisions based on numbers. Therefore, HR can more effectively sway their opinions when it provides them with data-backed advice.
6. With predictive analytics HR no longer needs to guess about the future.
In the past, future-oriented talent management was a virtual impossibility as there was no way to make accurate projections for future trends and problems. This is no longer the case as predictive analytics allows HR to anticipate changes and devise the best course of action to deal with them.
7. Data-driven HR allows impactful budget allocation.
Data can show HR executives where to invest their pennies to get full business impact. This impactful budget allocation pertains to hiring the best talent for the right business units to increase the bottom line.
8. Data-driven HR can determine which talent programs do not deliver.
Data analysis can tell HR executives which talent mechanisms should be discarded and which perform. It can also make the same determination for new programs.
9. Data-driven HR can identify the root causes of problems
What HR was unable to do without data was to determine the reasons why a people management problem emerged. Acquiring this information is now possible through analytics. This new capability will decrease costs and help develop the most effective solutions.
10. Data-driven HR has more efficient hiring and recruiting processes
Data analysis can determine the best hiring criteria and identify where top talent can be sourced. So, adopting analytics in this area can significantly increase retention and revenue.