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Few departments command the kind of reverence that’s reserved for finance. Shared company-wide, financial reports drive nearly every decision (with a focus on customer and profit), and everyone treats them as gospel, not least technology analysts and planners. Profit and loss statements, for example, are issued at regular intervals and distributed business-wide. All these statements should be accurate and monitored. To make everything easier, you can try some profit and loss statement template for Google Sheets or Excel. Within those pages, all key players — from the C-suite to people managers — can find clarity concerning the next cost or revenue decision.
This stands in marked contrast to human resources data. Although people costs are typically an organization‘s biggest capital expense, associated data is often neglected. Noisy, siloed and sometimes inscrutable, it’s more likely to be greeted with indifference than reverence.
But it doesn’t have to be this way, and shouldn’t be. In fact, a chief human resources officer is uniquely poised to make an enormous impact on overall results. But first, the CHRO must shake off the limitations of traditional HR paradigms and start treating data like a CFO would.
The HR Data Dilemma: Too Much Noise, Not Enough Signal
The pathway for CFO success is precisely the route where the CHRO has likely gone astray: the process of ensuring that associated data is both mission critical and communicated effectively. By taking a page from the finance playbook, HR can work with company leadership to provide more meaningful insights to more people.
Making this shift is more important than ever. We live in a noisy world, and this is especially true of human resources. From headcount and absenteeism to turnover and cost per staff member, there’s no absence of information; the problem is that it has traditionally been more about record keeping than generating insights. And the pandemic has only further complicated things — augmenting systems with productivity and remote work tracking, which makes it even harder for people leaders to distinguish signal from noise.
Against the backdrop of a wave of resignations, an economic downturn and labor scarcity, it’s even more critical to deliver useful HR data into the hands of those who need it most. People leaders need to know who is contributing most to their teams, who is at risk of leaving and what steps actually improve performance. In short, they need the insight to make better decisions.
Right now, HR data is falling woefully short. Here’s how to change that dynamic.
People Data is Business Data
From learning to recruiting to compensation, HR has a wealth of information at its disposal, but historically, departments have not done a good job of linking it to bottom-line results. As CHROs, it’s incumbent on us to find ways to present data like a CFO does: as a North Star for making decisions that impact actual business outcomes.
Whereas older HR paradigms focused on books and records, this new phase must focus on systems of insight. In other words, instead of getting bogged down in tracking things like benefits and satisfaction, the focus needs to be on capturing data that can help inform decisions.
For instance, even traditional HR releases like organizational charts can yield a variety of useful insights. In the past, these charts were static, typically just detailing hierarchies. Now, with data revealing patterns of behavior (from emails, Slack messages and meetings, among other sources), HR has the power to capture a more accurate picture of how people within a company are truly connected. With this rich overlay of information, the department can objectively see who’s making the greatest impact, and where knowledge is held to ensure they’re promoting the right people and not making damaging cuts.
Look deeper into all this information, and it’s easy to discover trends worth broadcasting to an organization… data that can support more strategic choices, including whether diversity goals are being reflected in company decisions.
Another Benefit: Empowering Managers
The biggest beneficiary of better HR data will be the people whom we’ve likely neglected the longest: frontline managers. Consider how central they are to any organization’s success: Promotions, hires and professional development opportunities all fall within such managers’ purviews, and in a hybrid work environment their role is even more challenging. After all, it’s impossible to stop by a worker’s desk to get insight into how they’re doing when you’re in charge of a global, distributed workforce. Better HR data means finally equipping these managers with the tools to understand who their employees are and how they spend their time.
For example, people managers have access to a host of statistics (including salesforce data, quotas and customer satisfaction stats), which can provide rich insights regarding productivity and outcomes. Once they layer HR data (including compensation and training) on top of those insights, they can calculate the true ROI of those investments.
The right people data can also inspire collaborative career development plans that empower managers and employees to make meaningful changes. Ultimately, it can create a better work experience and help achieve business goals, and this transformation starts with taking a page from the CFO’s playbook by distributing this data — regularly and readably — instead of siloing it.
Particularly now, when so many enterprises and organizations face economic hardship, having people connected to company goals has never been more critical. Rather than reducing it to information points, people data can optimize the human parts of work, allowing employees and managers to build better relationships and drive better results.