Four wooden blocks stacked to make up a picture of a graph with a magnifying glass showing a person.
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How HR teams can leverage employee data for better retention

25 Jul 2022

Data analytics is vital in many areas of a business. In HR, it can be used for stronger employee engagement – provided it’s used properly.

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Data has become one of the most valuable assets in most areas of business.

But a survey conducted earlier this year by Maynooth-based HR and payroll software firm MHR International suggested that HR managers in Ireland are lagging behind those in the UK when it comes to investing in people data analytics and reporting.

The research found that more than three-quarters (78pc) of UK HR managers spend 30pc or more of their HR budget on people data analytics, compared with 56pc of Irish HR managers.

Eamon Rheinisch, general manager of MHR Ireland, said analysing people data is “critical to any organisation to improve its processes” and make positive changes in areas such as employee retention, recruitment strategy, payroll, equality and diversity, and learning and development.

While collecting the right data is important, being able to use it effectively is the secret to boosting your workplace processes.

As part of its 2021 Human Capital Trends report, Deloitte said data-driven insights can help determine whether and how HR teams can shift their actions as needed.

“The challenge is to avoid getting caught up in the mechanics of collecting data when the focus should be on using it to inform meaningful action toward new outcomes,” the company said in a blogpost.

‘Employee data is only as good as what HR teams do with it’

So, where should HR teams begin when it comes to harnessing data?

Patrick Manzo, CEO at employee experience platform Kazoo, says there are several different types of data HR collects, from how long employees have been at a company to individual reasons for leaving.

“All of these different data points can be used to identify employees who are flight risks or who might be experiencing a lack of engagement at work,” he said.

“But the data that most often goes unused by HR teams is employee feedback data and moving the needle on employee engagement is dependent on how leaders act on this data. If they fail to create real change based on what employees share in these pulse surveys, HR teams will lose the trust of their employees and their interest in future participation in surveys.”

According to Tom McKeown, product owner at workplace management software company iSolved, another type of data that goes unused in HR teams is financial data.

“HR is getting pretty good at tracking things like turnover and recruiting as well as performance and such. But they constantly miss out on the ability to tie this to money. How much does it cost to lose a high performer in terms of productivity, efforts to replace, and the drag on colleagues who have to cover until the position is refilled,” he said.

“Most organisations cannot even tell you the average revenue per employee. It’s a simple calculation of total revenues divided by number of employees.”

Using HR data

If organisations are better able to use the data they have, this will help them get a snapshot of their current workforce, build forecasting into the future and increase employee engagement and retention.

“At the end of the day, employee data is only as good as what HR teams do with it,” said Manzo.

“Taking all feedback seriously, prioritising which issues or trends need to be resolved immediately and being transparent with employees that it may take a bit of time to create positive change in response to feedback will set HR teams up for the greatest success.”

McKeown said how data is collected and analysed also needs to be examined in order to maximise its potential.

“Whether it’s employees, candidates or terminations, as long as you have the data points you can assign them by record number to individuals. In turn, solid analytics or reporting systems can filter and group them in whatever way management sees fit,” he said.

“However, the tricky part is having the information easily viewed by the right people. Having robust dashboards is not enough. In my experience, organisations need to aggressively and consistently push insights to key leaders to reinforce engagement and action.”

‘Organisations need to aggressively and consistently push insights to key leaders to reinforce engagement and action’

Manzo added that technologies like machine learning and artificial intelligence tools can be used to analyse data and help identify trends around employee relations.

“Tech platforms that provide a holistic view of this historical people analytics data and enable leaders with real-time insights are critical to HR leaders’ success moving forward,” he said.

“These tech tools can also make recommended learnings and actions based on responses and data collected from their teams. Individualised recommendations make taking action more meaningful to each leader, allow HR to focus on company-wide thematic issues, and enable both company leaders and HR teams to directly impact the employee experience for the better.”

While data is an incredibly powerful tool for HR teams, McKeown said it’s also important to remember that companies cannot keep personal data on employees indefinitely under GDPR.

“Despite there being no defined time periods in the statute, six years has often been quoted as an acceptable guideline,” he said. “If an organisation is looking to use historical trends for predictive analytics, this is more than enough history to build algorithms and project future trends.”

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Jenny Darmody
By Jenny Darmody

Jenny Darmody became the editor of Silicon Republic in 2023, having worked as the deputy editor since February 2020. When she’s not writing about the science and tech industry, she’s writing short stories and attempting novels. She continuously buys more books than she can read in a lifetime and pretty stationery is her kryptonite. She also believes seagulls to be the root of all evil and her baking is the stuff of legends.

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