Data: the key to HR’s success?
I often feel sorry for those people who have not had an element of IT in their careers. IT has a way of changing the game on a continuous basis, prompting new buzzwords and acronyms on a regular basis. When referring to data, the new buzzword now seems to be ‘big data’ (sounds impressive) but what does this mean for those in traditional line functions such as HR?
Based on the opening statement of the definition I found of big data in Wikipedia – “’Big data’ is the term for a collection of data sets so large and complex that it becomes difficult to process using on-hand database management tools or traditional data-processing applications.” – HR with all the data it has collected over the years is a prime example of where big data would reside within an organisation.
Decoding HR informatics
I was invited to present a paper on the concept of HR informatics in April 2013 and one thing that really concerned me was the lack of information available I was able to gather while conducting my research. It seems if this is a relatively new field within the area of Human Resources. It was during this research I came across terms such as big data dashboards, data warehousing, data analytics and informatics.
The term ‘informatics’ is really about providing the exact information needed within the business to the correct people at the appropriate time without all the ‘noise’ – all the non-relevant data provided by traditional reporting that often clouds the real issue. Essentially, informatics is the technology used to find the ‘needle in the haystack’ through careful data analyses. The important point here is that informatics should present only the relevant, high-level information to the requestor and should always add value or significance to the process.
Finding the so called needle is achieved through drill-down capabilities. So should the informatics dashboard indicate that employee absence levels are too high, the drill-down capability allows the requestor to drill down by, for example area or period, right down to the transactional level to see where the root of the problem lies.
The stated goal of HR informatics is to integrate HR fully with information technology through data. There is an essential need to transform HR data into information and then transform this information into knowledge. The value lies in being able to use this knowledge in the decision-making process, which will assist the organisation in achieving its goals.
The value of HR informatics rests on accurate data
The foundation on which informatics stands is, as you would have guessed, your data. Herein lies one of the major challenges that organisations are faced with: ensuring that they have a set of data, of which the integrity and accuracy, is sound as having this will enable you to:
- Analyse data from within the broader HR space and various angles such as payroll, performance, training, absence, attendance and IR; by analysing data from these various areas simultaneously, HR and line management are able to identify trends, perform more accurate predictive analysis, and identify inefficiencies a lot easier and quicker, and
- View your data in real time as the data represented in a week-old report may not be relevant to the decision currently being made.
The downside is if the organisation’s data is currently poor, all that informatics can then produce is a set of out-of-date, inaccurate results. This, of course, leads to distrust in the organisation of the data HR is providing for the decision-making process, leading to HR ultimately being ignored by line and possibly executive management. Remember that investing good money in bad data will ultimately just result in you ending up with very expensive bad data!
So how would an organisation go about implementing HR informatics within the HR systems environment?
Most organisations that I speak to have all, for the past 15 - 20 years through their normal day-to-day operations, been collecting HR data from functional areas such as:
- HR administration,
- Payroll,
- Absence,
- Training,
- Health and safety, and
- Performance management.
What informatics now facilitates is the opening of the doors to analyse this data to identify various:
- Trends and patterns,
- Inefficiencies, and
- Predictive analysis.
* Sick leave dashboard
As an example, informatics could provide the HR team with the ability to provide management with predictions regarding absenteeism over a forecast period per division, factory or plant based on trend analysis of the previous ten years’ historical absence data over the same period. This prediction could then lead the business to make the right decisions regarding the use of contract workers over predicted periods of high absenteeism – a decision that could have positive financial implications when compared to trying to conduct this activity on an ad hoc basis.
* Salary dashboard
A key point of informatics is that the results should be provided through an easy-to-interpret, real-time dashboard-type interface. A typical example is the use of ‘traffic light- type’ icons. A glowing red indicator on the overtime icon displayed on the manager’s desktop would clearly highlight that his team’s overtime hours submitted for the month (or year) have just reached 90% of the budgeted amount, and as such requires immediate action.
This graphical means of presenting data is far more effective and efficient than the manager having to wade through various overtime reports produced by payroll that are generally received too late to take any decisive action on.
HR has, for the past number of years, been collecting vast amounts of data as part and parcel of their daily operations. HR informatics now allows the organisation to derive immense value from this data through various analytical processes, providing various stakeholders in the organisation easy-to-interpret results through a graphical dashboard.
