The data pyramid

Embracing new tech is a must for every business, but has this gone too far and is HR losing its human touch as a result?

Words by Sophie Parrott| Design by Matt Bonnar

Over the last few years ‘data’ has become one of the hottest buzzwords in the HR space. Every employer has a pyramid of data needs that will provide insights on an area of the business; each level in the Data, Information, Knowledge and Wisdom (DIKW) pyramid adds value to the initial data set that will drive strategic outcomes to benefit the business. And as the HR function has become more data literate and proficient it has been able to gain insights and understanding to inform important decisions. But, can this data be used to drive high performance? HR Grapevine spoke to HR leaders and experts to find out more.

‘Data is good to do some initial diagnostic’

Increased reliance

It seems that HR is aware of the benefits that data can provide and, as a result, the function’s reliance on data and analytics has grown. According to research commissioned by Cascade HR a whopping 82% of mid-to-senior-level HR professionals noted an increase in the perceived benefit of data between 2015 and 2016, with 89% predicting that HR metrics would have an even bigger presence over the next three years. In addition, B Daily News reports that the people function’s main uses for data includes everything from the day-to-day to the strategic, including monitoring staff absences (85.9%), managing workforce retention and attrition rates (83.9%), and analysing employees.

An objective outlook

Syreeta Brown, Managing Director and Global Head of Talent Acquisition Strategy and Programs at Citi Bank, tells HR Grapevine that data can be used to provide an objective analysis of things that “sometimes can be subject to perception and interpretation”. Brown says data is a great starting point for HR because “it’s quite a standalone and objective input into decision-making”. Brown’s thinking correlates with the McKinsey view. According to McKinsey Global Institute’s The Age of Analytics: Competing In A Data-Driven World, the use of data can make the decision-making process more transparent and evidence based which stops decisions from being made on subjective terms.

From engagement to data

Yves Givel, Vice President of HR, Europe, Africa, Middle East and Southwest Asia at Hyatt Hotels, adds that data can be used to drive high performance if it is properly extrapolated and the right course of action is taken from the insights. Therefore, for data to genuinely benefit HR and the function’s decision-making process Givel says that organisations need to consider how good their data is, whether they have the right systems in place, whether they are collecting the correct data, and how the data will be comparable if it is collated from different geographic regions.

Once these factors have been considered then Givel advises HR to focus on the next set of variables: how the data will be used and whether the person mulling over the results has the analytical acumen to draw insights that can be translated into easy-to-implement solutions that can drive performance. “There’s a lot of stars to be aligned but, yes, I absolutely think data could help HR with better decision-making,” he comments.

Employee data comes with a caveat

Citibank’s Brown explains that using people data alone to inform decision-making does come with a caveat. “It should always be used with other methods but I think that data is a starting point and it can [add] dimensions to thinking; it can give parameters to issues or things that you might need to solve it and it can provide a great indicator of whether you’re progressing or not. Data is good to do some initial diagnostic, but I think if you want to take action from that data you absolutely have to apply other methods,” she explains.

This is something that Givel agrees with. “I think data alone is useless unless you put it into context. It could well be that some of the numbers will show me something that in one organisation would be an absolute game changer but in another organisation it is completely irrelevant. So, it really comes down to what the organisation is doing,” he adds.

IBM’s predictive data

One employer to hit headlines over its implementation of AI technology was IBM.

Last year the firm’s, now ex, CEO Ginni Rometty, revealed that the patented ‘predicted attrition programme’ can accurately predict an employee’s decision to quit with 95% accuracy.

The programme was designed to predict employee flight risk, while also offering actions for managers to follow in order to engage with employees. “The best time to get an employee is before they go,” Rometty explained.

This programme came as part of a wider goal under Rometty’s stewardship to improve employee retention figures at IBM.

Is it ethical?

With research from the SHRM Foundation suggesting that 82% of employers plan to intensify their use of employee data, Kevin Green, ex-CEO of the Recruitment and Employment Confederation (REC) and former HR Director at Royal Mail says that there is a “big ethical question” surrounding HR’s use of employee performance-related data that the people function will “wake up to at some point”.

With employers in some firms able to access staff emails, web histories, and data around how many meetings they attend, Green says it is possible that employers can jump to conclusions based on the use of a single data source. “You could use that data to make decisions about whether someone is operating at their optimum, but again, the question is how far can organisations go?”

‘Data alone is useless unless you put it into context’

‘Hype and reality’

As Green sees it, one of the caveats that he would throw into the mix regarding data’s use in the workplace ‘is a hype and reality’. “I think in the long-term [data] is definitely the direction of travel but I think there needs to be a greater use of data by HR professionals to be able to think about: you need engagement data but most organisations [only] do this once a year, can’t aggregate the data and can’t drill down into it,” he adds.

Whilst data may be a good way for HR and employers to understand employee and business performance, as the HR leaders that HR Grapevine interviewed indicate, it shouldn’t be viewed as a panacea. It can be a useful tool to inform business decisions, but it shouldn’t be relied upon in its entirety. After all, it is only one block in the information pyramid that HR uses.