How do you make relevant HR policy? Just like your colleagues in marketing, how can you not only predict behaviour but also identify the best fit? The answer is really quite simple: with data. Over the past few years, what was originally a people-driven HRM policy has increasingly shifted towards a data-driven talent policy. By integrating HR analytics into daily work activities and making it a starting point for your policy, you are able to predict performance, potential and development. In this article, you can read more on how you can pursue a data-driven HR policy in 5 steps to manage your talent.

Step 1 | Talk with the business

Step 2 | Decide what data you need

Step 3 | Build a database

Step 4 | Familiarise yourself with statistics!

Step 5 | Keep your HR policy up to date

What is HR analytics?

HR analytics is about collecting, storing and analysing employee data for the purpose of making the impact employees have on the organisation’s performance measurable (CAOP Centre for Public Sector Labour Relations, 2017). HR analytics can be used to predict the best fit for the organisation. The latter is better known as talent analytics. Research by Snell (2011) revealed that up to 70% of the value of a business depends on the skills and experience of its workforce. In spite of this, HR departments have little insight into how they can effectively utilise skills and experience to obtain better operating results.

Predicting performance, potential and development.

That’s why Snell (2011) rightfully mentions one of the biggest clichés you need to take seriously: ‘your workforce is your most valuable asset.’ Despite the technological options at their disposal, the majority of HR professional and managers by far still make their selections based on assumptions and a gut feeling. And while some people might have a ‘knack’ for working this way, a lot of talent is lost using this approach. A data-driven HR policy ensures that you have a scientifically proven way to manage talent.

That means that you know in advance exactly what you are looking for and what you are not looking for: do you know which competencies are predictors of absenteeism? Do you know the competency profile of the type of people who will be successful in your organisation? And once they are hired, you want to keep them in the organisation. But are you aware of the constantly evolving needs of your people? Do you know what they need to keep them happy? The answer is often right in front of you, in the form of data.

5 steps to a data-driven HR policy

There are twice as many Google searches for the search term ‘HR analytics’ as there are for something as basic as ‘HR policy’. Searches for ‘data-driven’ even far surpass this. It’s clear that HR professionals are looking for ways to make their department more data-driven. Still, many HR departments have not yet ventured to take the plunge. It’s a completely new show that is far outside of their comfort zone. They ask themselves how they are supposed to tackle something like that. Where do you start? And anyway, is it really something for us? Every HR department, no matter how large or small, can benefit from data-driven HR policy. You will soon be data-driven as well after following these 5 steps, and you can finally put an end to wasting talent.

The outcome of your HR policy is that it should contribute to the success of the business. So meet with the managers and board to find out what is important to them. How can you enhance the business with HR data? What topics are important to them? Identify and list the topics so that the end product will subsequently meet business needs.

You know which topics are important from Step 1, so now you can decide which data is relevant to these topics. The biggest problem with data is that there is so much of it. An enormous amount. It is very easy to completely lose your way in an ocean of data. Before you know it, you’re occupied with things that are of no use to anyone. Formulate your research queries based on the information you have identified and listed: what problem do you plan on resolving? What data do you need to resolve this problem?

You have now identified what you want to know and the data you need to find it. First take a look at what you already have: which data sources can you use right now? Use these sources to build a database, and even more important: make sure this database is kept up to date! Make sure you are working with clean data, otherwise any conclusions drawn from the data will be worthless. Figures are a reliable replacement for assumptions and a gut feeling, but this is only true if you are using high-quality data. So invest time and energy to make sure you have high-quality data.

How do I build a database?

An effective way to automatically create and fill a database and keep it up to date is to use the HFMtalentindex online platform. The various assessments not only provide you with insight into each step of the candidate journey and the employee journey; they also create a wealth of data you can delve into in order to learn all kinds of things. Are you not particularly analytically inclined or do you simply lack the time? Our consultants would be pleased to assist you.

It’s great that you have all this data, but you can’t do much with it if you don’t understand statistics. But couldn’t I Google what I need to know? You could, but don’t expect to have all the answers after reading just one article. You really have to make an effort to delve into the topic or appoint someone who has an understanding of statistics and data analysis. People with no knowledge of how to interpret research results often (mistakenly) draw sweeping conclusions. Do you have a specifically defined problem? Our consultants can also help you in this matter. They are all Organisational psychologists with extensive experience in conducting statistical analyses. Based on the data provided by our customers, they can predict the behaviour of the customer’s employees.

Being data-driven is more than just a project; it’s a process. There is no beginning or end; it’s an ongoing way of working to keep HRM policy up to date and relevant. What’s more, you can provide managers and the board with input in the area of HR-related issues and talent solutions. The chief advantage of this approach to working is that it removes many uncertainties. Ditch your assumptions and say farewell to preconceptions, bias and misrepresentations based on a snap judgement. There’s no magic involved when looking for talent; it’s all about science.