Information is power
Those who have the insights can sometimes have the upper hand. Using people analytics data is one of the best strategies in this new world of work.
According to the Fall 2022 Fortune/Deloitte CEO Survey, the top three external issues that will disrupt CEOs’ business strategies over the next 12 months are a shortage of labor and skills, the ongoing pandemic, and supply chain disruptions. These challenges have one thing in common: they’re related to the workforce.
The future of management requires proactive and predictive people analytics data to empower organizational growth. Sierra-Cedar’s HR Systems Survey found that data-driven organizations are the most financially efficient. Their characteristics include “a high level of people analytics process maturity,” which includes “higher-than-average use of managers’ services, not just HR – the community.”
Let’s find out what data democratization is, why you should pay close attention to people analytics data at work, and how to do it.
What is data democratization?
Data democratization means providing direct access to analytics data to an organization’s wide group of people who will benefit from its use. When everyone, not just HR specialists or management, uses people analytics data, the company and its employees can make better day-to-day decisions that lead to better HR and financial results.
This doesn’t mean everyone in the organization becomes a data analyst or a specialist in people analytics data. Employees will continue to specialize in their domains, and there will always be a need to limit who can view sensitive data. But within those parameters, everyone should have a window into how the business they work in informs their daily decisions.
Gartner predicts that by 2023, data-enabled organizations will outperform their peers in most measures of business value. The potential benefits of people analytics data are higher quality, objectivity, and transparency of HR decisions and time and cost savings through partial automation of processes. However, careless use can lead to poor decisions and statistical discrimination.
It would be wise to start small, with implementing technologies for managers and HR professionals, by investing in second-wave HR analytics technology such as SaaS-based data democratization systems or creating a suite of dashboards using tools such as Microsoft Power BI or Qlik.
Implementing data-based decision-making
The results are incredible when data democratization and digital transformation efforts succeed. According to McKinsey, companies that made early investments in the automation of people analytics data and other areas saw a total return to shareholders (TRS) around 74% higher than their peers (47% to 27%).
Building a more data-literate organization typically requires implementing a modern data architecture in the form of dashboards and self-service business intelligence (BI) tools. However, it’s a bit more complicated than just flicking a switch. For example, you should try to:
- Democratize data across the organization by investing in accessible and easy-to-use tools.
- Upskill HR business partners (HRBPs) in data literacy and other supporting skills such as consulting and influencing.
- Support HR’s change management process by ensuring precise and consistent communication with CHROs and driving career journeys using a data-driven approach.
Why isn’t data democratization a standard practice in more companies?
McKinsey and the Boston Consulting Group (BCG) research confirms that seven out of ten large-scale business and digital transformation initiatives achieve their goals. However, only 16% of respondents said their digital transformations improved productivity. Furthermore, 7% said the progress made needed to be more sustainable. Let’s consider the reasons.
- Drowning in data. Any people analytics data requires a data dictionary, management, integration, consolidation, and visualization – which is beyond most HR organizations’ scope and capabilities. But without them, the human resources department can’t move on to analyzing the data necessary for a strategic response. With the introduction of people analytics data, organizations need help applying this information to make better decisions. More precisely, business leaders often know the what but not the why.
Fortunately, HR analytics technology has evolved to empower people at all company levels to use data directly to make decisions and be confident.
For example, Providence St. Joseph Health, which serves over 50 hospitals and 800 clinics in the western US, has made its workforce analytics solution available to more than 10,000 internal users across the organization. Through a dedicated training program, their Workforce Intelligence team has helped users understand their data better and be more confident in their role as key workforce resources.
- Security is the key to successful data democratization. Protecting sensitive information is a non-negotiable responsibility of HR and IT partners, who should be gatekeepers and provide access to information to people who need it.
While promoting people analytics data security by sharing data with more employees may seem counterintuitive, doing so systematically and responsibly will provide far greater security than the alternative.
People analytics data solutions allow you to set up customizable role-based permissions. For example, organizations can decide which data they’d like to distribute and control who has access to personal information.
- Interpreting data shouldn’t require a special degree. No matter how beautifully designed it is, a people analytics data dashboard filled with disconnected metrics that cannot be easily interpreted makes data more inaccessible.
Ultimately, the data provided should be rich in context, telling a story the business user can understand and act on. By using people analytics data, you can discover connections and patterns. Then you can empower people to act and solve business problems. As meaningful action becomes more frequent, organizations see the impact of data democratization in more positive business and workforce outcomes.
Eight steps to success in democratizing people data
People analytics data can empower business leaders to make better data-driven decisions without relying on IT and data teams. By democratizing enterprise data and deploying audience-based analytics, users can conduct their data exploration and visual analytics to uncover new insights. Let’s consider some possibilities of people analytics data democratization in more detail.
- CHRO sponsorship and key business stakeholder engagement. Insight222 reports that 90% of companies surveyed said that their chief executives consider data and analytics essential to their HR strategy. Therefore, CHROs should sponsor programs to democratize people analytics data through dashboards. It can be a part of your strategy to build a data-driven HR function in the company.
Become more data-driven
Get a free guide to data-driven recruiting. Here, we share statistics and real-life use cases on how to make people analytics data work for your business’s success.
- Clarify your understanding of business issues. It’s important to spend time with HR business partners, key stakeholders, and other groups to understand their challenges, the questions they get about people analytics data. When business leaders implement new data processing tools, they need to show employees why they should use them. However, it can be challenging to engage people if data isn’t built into an organization’s culture. Set an excellent example from the top by using data in your processes and showing how it can support your organization’s core mission without replacing the expertise and knowledge people bring to the job.
- Make your processes and tools as simple as possible. Building an organization that democratizes data doesn’t mean letting everyone see and do everything from day one. It’s okay if analysts and data scientists are still involved in most of the analysis early on. Even basic dashboards can start to change the culture. As people get used to using simple reports, you can gradually introduce higher levels of complexity.
- Develop user personas and journeys. Applying human-centered design principles to designing dashboards that focus on experience and outcomes will help you design a solution that benefits all stakeholders. Human-centered design can be defined as designing products, processes, and experiences that put people first. It’s crucial to think about your dashboard’s target users and create personas for each target group of users.
- Partner with the data privacy team. Collaboration with an HR’s chief data privacy officer is critical to ensuring the ethical use of people analytics data — and this also applies to data democratization programs. Successful people analytics teams have close partnerships with the data privacy team. They should meet regularly to discuss people analytics projects, new data sources, and privacy considerations for data sharing.
- Pilot and build a community of practitioners. Ongoing implementation and use of dashboards can be one of the biggest challenges people analytics teams face in this type of activity. It’s essential to pilot a dashboard to test it and learn before rolling it out on a larger scale. By doing this, a leader can increase the likelihood of success. You can also create a network of champions or a community of practice (CoP) to support initiatives to train HR and managers to be more data-driven. For example, Merck Group launched a network in addition to CHRO sponsorship. It led to key successes in developing data-driven HR professionals.
- Run with the training program. Equipping HR professionals and managers with the right tools to use data and analytics to inform stakeholders’ decisions is a central part of building a data-driven culture. However, this will only be successful if it is accompanied by a training program that applies analytical thinking and data literacy. Data literacy skills are vital to effective data-driven decision-making, but they are just one of many skills needed by the future HR professional.
- Measure the impact. Measuring the impact of data democratization can be done in different ways depending on the program’s goals. For example, the goal of deploying dashboards may be to reduce the number of ad hoc requests to the HR team, thereby freeing the team to focus on more value-adding analytics projects. Usage data will reveal which HR and business users use data democratization tools extensively and which have yet to adopt them. This data can be used by business leaders, financial managers, and HR or L&D managers for different HR training programs to upskill the workforce. Establishing a partnership between the finance and HR teams is vital so these teams can agree on how to measure business value and return on investment for the data democratization program and other analytics projects.
Democratizing data across the organization by investing in accessible and easy-to-use management tools is vital in developing a data-driven HR culture. But data democratization isn’t just about providing data; you need to work with teams to create suitable training materials to help them do their jobs effectively. It’s not only about the data; it’s about how you use it. If you have more questions about democratizing people analytics data, get in touch. We’ll be happy to help!
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