HR data analytics: making the right decisions in a world of bias
At the end of 2021, we didn’t know where to go when it came to our remote working policies. A global pandemic had completely changed the way we worked, with many of our team members having spent the entire length of it on the other side of the globe, far away from London.
One thing was for sure: none of us had spent any time in the office, and we soon found out that we liked working from home – but did we really?
“What’s the data behind it?” Our CEO Ben asked me when I spoke to him about our plan to carry on working remotely. That’s when it hit me: I hadn’t even looked at the numbers.
I simply made an assumption based on a general feeling, not on HR data.
Unfortunately, this is how a lot of HR decisions (and mistakes) are made. It’s also why HR can sometimes get a bad rep. So, I went back to my laptop and looked at the concrete HR data at my disposal (I will tell you how later on in this post). A month later, I had all the insights I needed and a well-made plan that led us to adopt our hybrid working policy.
More than just helping us launch a forward-thinking policy, this experience led me to understand that no aspect of HR can be transformed without first getting into the numbers.
In this blog post, I’ll guide you through the most important HR data points that in my experience you have to look at to make important decisions for your small business.
What is HR data analytics?
HR data analytics is the process of collecting data from your team members, sorting through this data and inspecting it to support your HR tactical decisions.
It can apply to many areas of your business – it’s important to remember, however, that small businesses (like Charlie, for example) won’t have a large HR team, which means it will be difficult for them to analyse every aspect of their business.
In contrast to large corporations, they’ll have to make smart choices and automate their processes to make sure HR decisions are data-driven, whilst allocating enough time to other tasks – after all, many small businesses don’t even have an HR department, but that doesn’t mean HR data analytics should be left aside.
Why is HR data analytics becoming more and more important?
Over the last decade, we’ve seen a tremendous shift in the world of HR – the old-fashioned ways of running a business are long gone, mainly because employees are expecting more from their bosses.
Whether it’s from salaries, working conditions or holidays, people have demands and won’t simply settle for the basics.
That’s when HR data analytics comes into play if you want to remain competitive in a world where, frankly, the top candidates can choose from a large pool of companies.
At Charlie, we know that truly understanding our team members requires looking inward at the individuals working for us.
Through HR data analytics, our objective is to gain deeper insights into our workforce, enabling us to adapt our HR policies, operational methods and benefits to meet them halfway, ultimately enhancing our retention rates.
By adopting this perspective, we’ve seen potential candidates getting more and more excited about what we have to offer, simply because we listened to our team members and made sure we did everything we could to retain them.
So yes, HR data analytics are important if you want to keep up with an ever-changing world. We’ve seen it before. It can happen overnight, so be ready to keep an eye on your numbers and spot any trends before you lose more employees to another company.
What kind of HR data can you collect from your team members?
The kind of HR data and analysis you will make will largely depend on the kind of business you run.
The first thing you need to understand is what your business goals are, what you’d like HR to achieve as well as what your mission is as a business.
Once you’ve established this, it’d be easier to understand what kind of HR data you want to collect from your employees.
At Charlie, for example, our mission is to build a tool that democratises great HR for small businesses – and we really believe that a combination of HR policies, HR data analytics, and ways of working is a great way of doing that.
Here are a few insights on the goals we have for the data we collect:
- Understanding the best ways to retain our team members by hearing what they’re satisfied with, how we could improve, what they would like to see at our business and what we can put into place
- Building a diverse team and improving our recruitment processes and inclusion initiatives, as well as try to remove bias as much as possible
- Tracking the number and types of absences people take per quarter in the business so we can address any immediate issue and flag any type of leave that has increased or decreased in comparison to others
- Measuring how engaged our team is by asking whether they feel motivated to do the work and comparing the results month on month
Let’s now dive into the type of HR data that will allow you to have these insights and therefore make the right decisions for your business.
HR data collection – the basics
Here are a few examples of the HR data your business can collect as part of a regular data sweep for business:
- Employees’ personal information, identification and contact details (this is usually done through an employee details form) to comply with UK law
- Following this, it also means you’ll have to keep your employee records updated
- Have a copy of the pre-employment checks you did before the new hire started
- Time and attendance records such as sick days, holidays, unauthorised absences, etc.
- Demographic data such as gender, age, ethnicity, nationality, marital status and dependants
HR data collection – to go further
As I mentioned, the HR data you’d like to analyse can be pretty basic such as the one presented above, but it can also go a step further and be a bit more accurate when it comes to your small business.
Here are some examples we use at Charlie:
- Probation pass rate
- Percentage of hires on schedule
- Retention rate
- Attrition rate
- Gender diversity
- Ethnic diversity
These are just a few ideas of the many aspects of HR you can come across when working as a professional.
Of course, it can be difficult to understand where this data can be stored, and where to find it, but you’ll soon find that it’s way closer than you think it is.
How to collect your HR data and when to analyse it in 3 steps
Make a list of the HR data you need based on your business goals
The first piece of advice I would give is to focus on the kind of HR data you want to collect. See my previous point about taking it slow.
Wanting to track everything all at once will be very time-consuming and you’ll end up not using all the data you’ve collected for lack of time.
So, find your business goals and what you want HR to achieve. Do you want a better strategy to retain your team members? Are you trying to attract more talent through better development opportunities? Do you think your business could benefit from remote work?
Once you’ve got your priorities in order, then you can start to understand which data is going to be useful to achieve your goals.
Get employee database software
Many small businesses don’t have time for manual work – that’s where employee database software can be useful when you start out and beyond.
There are a few elements you want to ensure when you’re picking your software though:
- Has a user-friendly interface
- Checks all the security and compliance boxes including GDPR
- Removes the use of spreadsheets
- Gives you customised data fields for the data that’s unique to your business
- Integrates with the rest of your HR tools
- Allows your team members to self-serve so you don’t have to go to them one by one asking for information
As Chief of Staff, I use our own software to combine all these elements. It saves me tons of time, automates the collection of most of the HR data I need and gives me the opportunity to either download it under CSV or automatically populate graphs that I can analyse.
Check, double-check, and draw conclusions
Just bear in mind that it will make it more difficult to get onto this next step to check the data as you will be likely to make a lot of human errors and miscalculations.
Regardless, and when you’ve done all of this, it’s time to draw the right conclusions. Here’s my advice when it comes to preparing for this:
- Proceed to a diagnosis – if you’re trying to understand the state of sick days at your business, you’ll proceed to a diagnosis to understand on a scale of few to a lot how many are taken and what it means for the business
- Predict what the data will mean – some data can help us make the right decisions for the future. Are you seeing patterns that say your team members are going to leave after three years? Keep it from happening.
- Recommend the best option going forward – based on your observations, what option should you choose? Let’s say for example you’re making a decision as to whether to have a remote working policy or to remain in the office. What does the data tell you?
Present your business case to the leadership team and to the whole team
Once you’ve drawn all these conclusions, you’re not just going to sit on them. It’s time to share your knowledge.
At Charlie, I first share my conclusions with members of the leadership team so we can discuss the different points, understand whether there are any objections and make a final decision on what will happen going forward.
Once this is done, I use the slides I’ve made for the leadership team and adapt them to present to the whole company.
Just make sure you communicate what’s behind a decision. Don’t be worried about sharing HR data with your team members – trusting your team will reinforce your transparency commitment as a business, and if you’ve had to take a decision that’s a bit controversial, numbers will back it up.
A Case Study of how we used HR data to build our hybrid working policy
As I mentioned at the beginning of this blog post, back in 2021, I was in charge of understanding what our new world of work would look like.
To do so, I ran an engagement survey in our CharlieHR tool where I asked our team members a few questions:
- How do you currently feel about returning to the office?
- How often do you plan to use the office each week?
- What type of work will you be doing in the office?
But it wasn’t enough to get the right HR data. In our software, I also got the opportunity to look at working locations that allowed me to understand how much time was spent in London, in the broader UK and outside of the country overall.
Taking this kind of HR data and analysing it made me realise a few things about our people:
- They were happy to keep the office in London whilst being able to work from home with as much flexibility as possible
- They wanted more flexibility when it came to working abroad
After I presented my case study and the results to the leadership team, I went on to share the HR data I collected and our decisions with the broader team – and this is an example of how we made use of the data at our disposal, whilst collecting more to be able to make the right decisions for our business.