Leveraging HR data to drive business efficiency and success

The field of human resources has changed drastically over the past few decades. Initially, HR was primarily focused on day-to-day administrative tasks, ensuring the smooth running of a company. Now, it’s evolved into a strategic, data-driven function aimed at achieving corporate targets for productivity, cost and output.

We’re at an exciting frontier in the HR sector. Perhaps the biggest driver of change in the industry is how data informs HR functions and influences decision-making. And that’s set to advance with intelligent tools like generative AI and natural language processing, heralding a whole new era in HR data capabilities.

So, what is data in HR, exactly?

HR data refers to the process of gathering, storing, and analysing workforce and operations information to streamline HR functions. It encompasses a raft of information types, including (but not limited to) personal information, employment records, performance reviews, recruitment details, training and development stats, and benefits and compensation information.

That’s a long list, but it’s a testament to how important data is in transforming HR practices these days. In this piece, we’ll explore how leveraging data can enhance HR efficiency, saving time and resources.

Understanding the Role of Data in HR

In the past, HR relied on manual processes and human intuition. Today, advanced HR software and data analytics tools enable HR teams to collect and analyse large amounts of data seamlessly and efficiently. This shift enables HR teams to make data-driven decisions that affect the company’s bottom line–and they’re essential to an organisation’s success.

This transformation has been driven, in part, by the development of HR data. From employee performance to recruitment metrics, data now informs all aspects of workforce management.

Here are a few key ways that data now influences modern HR practices:

• Employee performance data tracks an individual’s achievements, identifying and flagging areas needing improvement.
• Recruitment data helps hiring teams understand how well their processes are working.
• Training and development data monitor employee skills and growth.
• Benefits and compensation data show how employees are rewarded.

Analysing these types of data helps organisations better understand their workforce and improve hiring, retention and employee development.

Mondelēz International, one of the largest snack companies in the world, faced challenges due to its complex, disparate range of technologies, systems, and solutions globally. Mondelēz decided to overhaul its HR and payroll processes to overcome these challenges.

The goal was to achieve greater efficiencies, unify processes, prepare for the future, and improve employee experience. They chose ADP to outsource their payroll and HR functions.

Volker Schrank, Head of HR Technology and Employee Experience at Mondelēz, said, “When you have a simplified technology like that, you can really focus on innovation. You can bring your company forward rather than figuring out how you keep an out-of-date solution working.”

This Mondelēz International case study demonstrates the power of successful data implementation in HR and how it enables HR teams to refocus on innovation and growth.

Data-Driven Recruitment Strategies

Another area profoundly transformed by HR data is recruitment.

HR data is a game-changer in the modern hiring process. HR departments can now quite easily analyse data from previous hires, which can be used to create a profile of the ideal applicant.

This projection helps hiring teams identify the skills, experiences, and personality traits most likely to succeed in a designated role within the company–and isn’t a one-size-fits-all approach.

However, a targeted, data-influenced hiring strategy can vastly improve the suitability of candidates and narrow the pool down significantly. This, in turn, reduces the time spent hiring and interviewing candidates who might be deemed incompatible with the company from the outset.

Predictive analytics is another powerful tool favoured by HR teams. In predictive analytics, companies can anticipate hiring needs by analysing historical trends and patterns in workforce data.

For example, if data suggests a department consistently experiences a high turnover rate, predictive analytics can spot the trend and help plan future hiring needs around this data pattern. This results in an ‘always-on’ approach to hiring, meaning a business is ready and prepared to fill positions quickly on demand.

Enhancing Employee Performance and Engagement

When it comes to enhancing employee performance and engagement, HR data is a tool that shouldn’t be ignored. Performance tracking provides real-time insights into how your people work: whether they’re meeting their goals and how engaged they are within their roles. The data can highlight where improvements or interventions are needed. This is beyond valuable information for employers looking to manage their talent. This data can be used to plan and tailor support for their employees where needed, whether that’s through training, development programmes, or accountability sessions.

Data also plays a big part in employee engagement and satisfaction. By analysing data, HR departments can identify areas where employees feel disengaged or unsatisfied. HR teams can then laser-focus their resources to target these issues, eventually improving employee morale.

Improving HR Decision-Making with Data

Data is more critical than ever in strategic HR decision-making. From workforce planning to talent management and policy changes, HR data plays an essential part in a business's day-to-day operations. Incisive data can, for example, reveal subtle trends in employee turnover, which can, in turn, help HR teams develop employee retention strategies.

Data insight impacts organisational culture, too. Using data, HR can better understand what’s working–and what’s not.

Understanding the variables that affect employee satisfaction and engagement helps drive new strategies towards a better-functioning, positive work environment. This can result in increased productivity and minimise staff turnover.

Overcoming Challenges in Implementing HR Data Practices

Despite the obvious benefits, implementing HR data practices can be challenging for HR teams. Common challenges include issues around data privacy (compliance with legislation like GDPR), a lack of technical insight, and negative organisational attitudes that might resist change. Organisations must invest in reliable, secure, easy-to-use HR solutions and software to overcome these challenges.

Integrating data into HR workflows through automation and HR data integration offers incredible cost-saving efficiency. HR software can bring together and streamline disparate, time-consuming, manual HR processes in one simple system called Human Capital Management (HCM).

Using an HCM can provide a live 360-degree view of your workforce. When integrating HCM into your workflows, it’s important that you first consider your objectives and assess any data requirements. Take time choosing the right HR solutions for your company, ensuring stakeholders are on board, and properly test any new solutions before implementation

The power of education shouldn’t be underestimated here. Training staff with the skills they need to use HCM and data analytics tools helps things run properly. It’s also important that HR teams adequately address data privacy concerns and pay attention to ethical considerations to encourage a company culture of trust and compliance.

The Future of Data in HR

New trends and technologies in HR data analytics offer even more opportunities for efficiency in the sector. Generative AI and machine learning are already transforming HR practices by automating many day-to-day routine tasks. They also enable teams to go deeper in their insights into workforce data, with optimised pattern recognition that can identify workforce trends before they become an issue.

With generative AI, HCM systems can automatically send your employees reminders of critical tasks like timesheets, benefits, payslips–and more.

AI and machine learning can help predict employee turnover, identify high-performing employees, and streamline arduous recruitment processes. By embracing these technologies now, HR departments can further enhance their efficiency in the sector.

Conclusion

Data has quietly revolutionised every aspect of the HR sector, from transforming recruitment strategies to enhancing employee performance and boosting morale. It’s how modern HR teams and senior leadership make informed, strategic decisions about their workforce every single day.

While there are, of course, challenges in HR data practices, investing in the right HR solutions and software can ensure your company is efficient, compliant and ethical in your use of data.

Data has already fundamentally changed the nature of the HR sector. And its transformative abilities look set to enhance HR functions even more with new AI technologies already at the door.

By embracing these changes now, businesses like yours can prepare for a more efficient future in the HR sector. ADP is the natural partner, an HR solution favoured by the likes of PayPal, Cisco and Innocent.

ADP® iHCM is a cloud-based platform that simplifies Payroll and HR management in one scalable, compliant solution–accessible from any device. Book a demo today to see how you can streamline your manual HR processes in one simple system.

FAQs

What is HR data?

HR data refers to collecting, storing, analysing, and using information related to an organisation's workforce and HR operations.

How can HR data improve recruitment?

HR data can create candidate profiles and use predictive analytics to forecast hiring needs before the arise, improving the quality and efficiency of hiring processes.

What are the benefits of using data for employee performance?

Data tools can monitor performance, tailor development programmes, and boost employee engagement and satisfaction, leading to higher productivity.

How does data support strategic HR decision-making?

Data provides deep insights into workforce trends, influencing talent management, workforce planning, and policy changes towards a more positive workplace environment.

What challenges might organisations face in implementing HR data practices?

Common challenges include data privacy concerns, lack of technical expertise, and resistance to change. Proper training, support, and investing in secure HR software can address these issues.

What is the future of HR data?

Emerging technologies like AI and machine learning are set to transform HR practices, offering deeper insights and automating daily tasks for increased efficiency.