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Few departments have the kind of reverence reserved for finance. Shared company-wide financial reports drive nearly every decision (with a focus on the customer and profit), and all the world treats them like gospel, not least technology analysts and planners. Profit and loss statements, for example, are issued at regular intervals and distributed throughout the company. Within those pages, all key players, from the C-suite to people managers, can find clarity regarding the next cost or revenue decision.
This is in stark contrast to the HR data. Although personnel costs are typically an organization’s largest capital expense, the associated data is often neglected. Loud, isolated, and at times inscrutable, you are more likely to be greeted with indifference than reverence.
But it doesn’t have to be that way, and should not be. In fact, a hiring manager is in a unique position to have a huge impact on the overall bottom line. But first, the CHRO must throw off the limitations of traditional HR paradigms and start treating data like a CFO would.
The HR data dilemma: too much noise, not enough signal
The CFO path to success is precisely the path the CHRO has likely strayed down: the process of ensuring that associated data is mission-critical and communicated effectively. Taking a page out of the finance playbook, RR. H H. You can work with company leadership to bring more meaningful information to more people.
Making this change is more important than ever. We live in a noisy world, and this is especially true in the case of human resources. From headcount and absenteeism to turnover and cost per staff member, there is no lack of data; the problem is that traditionally it has been more about keeping records than generating knowledge. And the pandemic has only made things even more complicated: augmenting systems with productivity and remote work tracking, making it even more difficult for people leaders to distinguish signal from noise.
In the context of a wave of resignations, an economic downturn, and labor shortages, it’s even more critical to deliver useful HR data to those who need it most. People leaders need to know who is contributing the most to their teams, who is at risk of leaving, and what steps actually improve performance. In short, they need the insight to make better decisions.
Right now, HR data is falling woefully short. Here’s how to change that dynamic.
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People data is business data
From learning to recruiting to compensation, HR has a wealth of information at its disposal, but historically, departments haven’t done a good job of linking it to the bottom line. As CHRO, it is incumbent on us to find ways to present data the way a CFO does: as a lodestar to make decisions that impact actual business results.
While older HR paradigms focused on books and records, this new phase must focus on knowledge systems. In other words, instead of getting bogged down in tracking things like profit and satisfaction, the focus should be on capturing data that can help inform decisions.
For example, even traditional HR communications, such as organizational charts, can generate a variety of useful information. In the past, these charts were static and typically only detailed hierarchies. Now, with data that reveals patterns of behavior—from emails, Slack messages, and meetings, among other sources—HR has the power to capture a more accurate picture of how people within a company are truly connected. With this rich information overlay, the department can objectively see who is having the biggest impact and where knowledge is being stored to ensure they are promoting the right people and not making damaging cutbacks.
Take a deeper look at all this information, and it’s easy to discover trends worth passing on to an organization…data that can support more strategic choices, even if diversity goals are reflected in company decisions.
Related: 6 Ways HR Leaders Can Help Humanize the Organization
Another benefit: empowering managers
The biggest beneficiary of better HR data will be the people we’ve probably neglected the longest: front-line managers. Consider how central they are to the success of any organization: promotions, hiring, and career development opportunities are all within the purview of these managers, and in a hybrid work environment, their role is even more challenging. After all, it’s impossible to stop at a worker’s desk to get a sense of how they’re doing when they’re in charge of a global, distributed workforce. Better HR data means finally equipping these managers with the tools to understand who their employees are and how they spend their time.
For example, people managers have access to a wealth of statistics (including sales force data, quotas, and customer satisfaction statistics), which can provide valuable insights into productivity and results. Once they put HR data (including compensation and training) on top of that insight, they can calculate the true ROI of those investments.
The right people data can also inspire collaborative career development plans that empower managers and employees to make meaningful change. Ultimately, you can create a better work experience and help achieve business goals, and this transformation starts with taking a page out of the CFO playbook by distributing this data, regularly and legibly – instead of ensiling it.
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Particularly now, when so many businesses and organizations are facing economic hardship, having people connected to business goals has never been more critical. Rather than boil it down to data points, people data can streamline the human parts of work, enabling employees and managers to build better relationships and drive better results.