Data is a great resource that can accelerate growth and improve the competitiveness of nearly every business. But not all data is good data and identifying what data to collect can be a challenge for most HR departments.
Measuring the value of people within a business is not only difficult, but identifying what data to collect can be a daunting task.
What data can your HR department collect?
This depends on the amount of time and resources that are currently available. If you start by creating a list of the data you want to collect with the hopes of analyzing this information in the future, your business runs the risk of never arriving at any useable results. For instance, a business that is growing rapidly is generally preoccupied with finding and hiring new candidates, which leaves very little time to analyze a large data set and the business may never get the chance to use the information that was collected.
To avoid this pitfall, try not to collect any unnecessary data. The most direct way to accomplish this is to first selecting the metrics you are interested in using and then identifying what you would need to find out about your employees in order to calculate these metrics. You can also use current metrics as a guide to determine what information you want to collect in the future.
How can you grow your business using HR data?
Without the right tools, even the best data will be useless. Data needs to be analyzed and transformed into an action or insight that can be used by the business. Metrics can help make sense of any data set by boiling down rows and rows detailed information into a single number or measurement. This can it faster and easier to make decisions about policies and hiring practices. Plus, metrics can be represented using visualizations, such as dashboards and KPIs, which can lead to better insight.
Here are a few scenarios where metrics can be a valuable tool:
- Large corporations that are interested in hiring the best candidates can use information about the packages offered to potential hires and compare it against the packages offered by the competition. This can include the amount spent on employees tuition benefits, the amount of bonuses paid, or the amount paid by the company to match a 401K plan. By quantifying these benefits, a job candidate may find that the competitiveness of the overall package is a better deal than a higher salary at a rival firm.
- A fast growing start up can stay on course by using recruitment metrics. Tracking the average number of open positions each month and analyzing the number of days it took to fill these positions can make it easier for managers to recognize the need to increase the size of the HR department.
- HR departments that are overworked and understaffed can evaluate current business practices by tracking the amount of time spent hiring for existing positions, the amount of time managing employee grievances, and the turnover rate (or the average amount of time an employee works at the company).