In today’s fast-paced business environment, data has emerged as a critical asset across all functions, including Human Resources (HR). Leveraging data allows HR professionals to make more informed decisions, enhance employee experiences, and drive organisational success.

AllChiefs has been collaborating with key players across various industries, guiding them from data assessment to implementation. This closer engagement has provided us with deep insights into the essential components of using data in HR: developing a data strategy and maturity model, building data capabilities, focusing on the right questions, and turning business needs and trends into actionable insights.

This blog delves into these components, shedding light on their various aspects and significance, the possibilities of AI , and how a data strategy can be sustainably integrated in an organization.

Data Strategy & Maturity

The journey toward a data-driven HR function begins with a robust data strategy that supports HR objectives and the overall business strategy. This strategy outlines priorities based on business needs and determines the key elements for the data roadmap and capability-building plan. AllChiefs believes that starting by understanding the current data maturity level is crucial for developing a fitting strategy and focusing on the right projects with the appropriate people.

Based on our experience, most organizations follow five stages of data maturity:

1. Data Denial: No data is collected or used, and decisions are based on intuition.

2. Data Aware: Data processes are manual and time consuming, so the organization starts to use descriptive analytics to understand past performance.

3. Data Guided: Standard reporting and diagnostic analytics are used to explore why certain patterns occurred, and some basic automation processes start being handled through AI.

4. Data Savvy: Data is managed proactively, and as an AI component, machine learning may be incorporated for predictive analytics to forecast future trends and behaviors.

5. Data Driven: Data is integrated into business processes, and prescriptive analytics can be used through AI to recommend optimal business decisions to achieve strategic goals.

Building the Capability

Developing data capabilities within the HR team is essential for effective data use. This requires assembling a diverse team with the following roles:

• IT: Manages the infrastructure supporting data management, including databases, data warehouses, and cloud services.
• Analysts & Data Scientists: Analyze data to uncover insights, trends, and patterns using advanced methodologies.
• Designers: Create intuitive dashboards and reports to make complex data accessible to non-technical stakeholders.
• Translators: Bridge the gap between technical teams and business units, ensuring data insights align with business goals.
• Ambassadors: Advocate for data use within the organization, promoting data literacy and a data-driven culture.
• Decision Makers: Usually the C-Suite, who ensure that data-driven insights lead to competitive advantages.

Although some roles require high-level expertise, others, such as translators and ambassadors, can often be filled by the current HR workforce after some training. Balancing the hiring and development of talent is key to building data capability.

Enhanced Capabilities, Deeper Insights: Asking the Right Questions

The value of data lies not just in its collection but also in the questions it helps answer. Focusing on the right questions ensures that data analysis is relevant and actionable. This involves understanding the key challenges and opportunities facing the organization.

For example, instead of simply asking, “What is our employee turnover rate?”, a more insightful question might be “What factors are contributing to employee turnover, and how can we address them?”

Collaboration between HR and other business functions is essential to ensure that data initiatives align with broader organizational goals. Regularly revisiting and refining these questions helps maintain a focus on strategic priorities.

Data Driven Impact

HR nowadays plays a more active role in strategic planning, talent management, leadership development, and organizational design. This shift highly contributes to driving business performance, also making sure the workforce is aligned with long-term goals and broader business strategies.

Additionally, there is a growing focus on an outside customer-driven perspective. Understanding and anticipating the needs of external customers and equipping the workforce to meet those needs effectively enhances customer satisfaction and loyalty.

Data analytics and the use of AI are instrumental in this transformation. Both are considered megatrends that will shape the new world of business, and many have already adopted their use. The use of data and AI allows HR to make decisions based on empirical evidence rather than intuition, identify trends, predict future workforce needs, and measure the impact of HR initiatives on business outcomes. This data-driven approach ensures that HR strategies are effective and aligned with business objectives, improving organizational efficiency and customer satisfaction.

Conclusion

Transformation fails when the data strategy doesn’t align with company goals or data maturity levels, capabilities are lacking, or the wrong questions are asked. At AllChiefs, we understand that incorporating a data strategy into HR can be complex, with many puzzle pieces to fit.

However, with the right team of experts, this transformation can be exciting and smoothly executed. By leveraging deep industry expertise, AllChiefs facilitates sustainable transformations, keeping organizations ahead in a dynamic world. In today’s information age, data-driven HR isn’t just an advantage-it’s a necessity. One successful case at a time, organizations are joining us in preparing for the future. Discover how we guided Lipton through the process of data migration, supporting the development of their Data Strategy & Maturity capability.

At AllChiefs, we believe in implementing with care, transforming with a heartbeat.