Is HR missing out on the benefits of data?

Is HR missing out on the benefits of data?
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If awards were given out for the most disliked workplace ritual, I dare say the annual performance review would be up there among the front runners. It's an ordeal that neither manager or employee ever seems to enjoy, yet they largely persist, it seems through no other reason than there are few feasible alternatives.

It's perhaps no surprise therefore that recent data from the Institute for Corporate Productivity suggests that just 10% of companies have discontinued their annual performance appraisals in the last year.

What is equally clear from the data however is that few companies are entirely satisfied. If they were reviewing the reviews, they would score a firm 'could do better'. The stats reveal that 66% of companies plan to tinker with their performance reviews as a priority in 2017.

When quizzed as to just what these reforms might be, respondents said that it would be more frequent reviews together with more training on how to conduct reviews for managers. There was no real perception that data could play a major role in how performance is judged.

In HR we trust, all others use data

This reluctance to take advantage of data when making decisions should perhaps come as no surprise. A recent study found that the HR department was the main laggard when it came to adoption of data driven technologies in the workplace. It reminds me a bit of this famous scene from Moneyball.

Just as with the scouts and coaches at Oakland, the study suggests a distinct lack of data literacy in most HR departments. Now we all know the stories of data science skills gaps across companies as a whole, but this is a particular problem in HR. Finance might get some data people, IT probably will, marketing almost certainly, but HR?

That's not to say the solutions providers are blameless either. Not only are many solutions expecting a level of skills that don't exist, they also often develop solutions with so many unwanted bells and whistles that simultaneously manage to miss the things that HR want most of all.

Improving perceptions

Of course, a big part of the problem is one of perception, with HR people regarding any kind of meaningful data science as being hugely complicated and requiring vast databases. The reality that quite simple solutions can be a good first step is not one held in enough HR departments.

What's more, even if companies do have good data, the skills shortage in HR tends to mean a stark gap between the technicians managing the database, and the HR staff who hope to derive insights from it. As you can imagine, this can rapidly create a kind of data divide, with departments who get it streaking ahead, and those who don't left behind.

It really does underline the core value in growing your data science capabilities throughout the organization, even in the HR team, as it's an area where data is increasingly valid, and therefore increasingly crucial to your ability to do a good job.

I've written previously about the power of building a data driven organization, with a recent report from EY revealing that 81% of organizations want to place data at the heart of all that they do. Whilst much of this desire is to better understand ones customers, HR should not be sat on the outside looking in, and should strive to do all it can to ensure data plays an active role in performance management too.

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