What You Should Know About Your Company’s HR Data

May 6th, 2024 – SkillCycle

Collecting HR data is not a new idea. Companies have been keeping detailed records of employees for decades. However, data is no longer a static collection of information like employee details and past events in a company’s history. 

Instead, HR data can be a valuable and dynamic component of how organizations refine strategies and drive better business decisions. You can use it to identify patterns or understand the importance of employee feedback and how to act on it. 

“Systems to manage HR data have improved over time,” says Jeff Reid, Co-Founder, COO & CPO of SkillCycle. “The challenge now is for companies to leverage that data into action and change management.”

For example, companies that reallocate talent to align with their strategic plans are more than twice as likely to outperform competitors, according to McKinsey

Organizations must develop ways to mine their data so they can create insights that better align work with company goals. Doing so within your own organization will increase your chances of growth and future success.

In this article on the HR data your company collects, we’ll explore:

  • Common types of data you may collect and manage
  • Where HR data collection can go wrong
  • How data collection can create expectations within your workforce
  • The role of responsible partnerships in HR data management 

 

Common types of data collected and managed by companies

Most organizations collect HR data from several different sources over an employee’s lifetime with the company. They gather and store employee data in an HRIS to track information from the time of hiring, through each promotion, to the end of an employment period or exit interview. 

However, we all now have access to tools that help track talent development, engagement, and business data relevant to performance or customer satisfaction. We can rely on this data to influence outcomes like productivity and employee retention. 

“There has been a significant shift toward collecting employee engagement data in the last decade,” says Reid. “Companies have realized there is a way to get the pulse of the organization in real-time, through employee feedback.”

HR data management, therefore, is about much more than simply collecting and protecting data. Now, you can deliberately gather data on critical metrics like the cost of turnover to help you take strategic action.

HR data analytics enable targeted, data-driven decisions about HR programs and initiatives. This allows organizations to achieve greater productivity and enhance the employee experience, according to the Society of Human Resource Management (SHRM)

 

Where HR data collection can go wrong 

If collecting small amounts of data is helpful, then collecting large volumes of data should be better, yes? Not necessarily. Every initiative to gather data should be examined carefully to see if it aligns with your HR strategies and company values. 

“Any time an organization collects data, underlying problems and biases can exist,” says Reid. “It’s wise to audit your methods: how you collect data, whether it’s fair, and whether you’re acting meaningfully on it afterward.”

For example, your company may track data on employee engagement. If your HR team plans to use this data to craft new strategies, they may need to pause and investigate the original sources of the data. 

Were the methods used to collect the data equitable? Did everyone on the team have an opportunity to provide their input? Was any bias woven into questions asked in a survey or conversations intended to gather feedback?

You should always leverage HR data analytics with the expectation that over time, improvements must be made to policies and processes regarding data collection. This will help you ensure equity and remove bias from the equation.

 

How data collection can create expectations within your workforce

Data collection doesn’t happen in a vacuum. Most employees anticipate that their company will collect and store data like demographic information, compensation, and benefits. 

However, the more proactive an organization is about collecting engagement data through surveys and other means, the more employees may come to expect that their feedback will impact decisions or outcomes in the company. 

“HR teams should be mindful that if they collect employee feedback, there is an expectation that the feedback matters to the company,” says Reid. “If you collect this type of data and never act on it, it can make people feel like the company isn’t listening.” 

Ideally, HR teams aren’t simply going through the motions to collect data; if this is the impression given to employees, initiatives to collect employee feedback to improve engagement could backfire. 

Never underestimate the importance of employee feedback. If team members are willing to expend energy and be vulnerable enough to share their experiences and impressions with HR, these disclosures should be treated with care. 

 

The role of responsible partnerships in HR data management

Securing the data your company collects must always be a priority to protect confidentiality and employee trust. However, to do so effectively, HR teams must be aware of where the potential risks lie in protecting data. 

For example, while most people think of cyber attacks and vulnerabilities when it comes to protecting data, the reality is that risks inherently exist within a company. Managing what data is collected and who has access to it is critical, as is ensuring transparency with employees. 

“HR teams need to be very clear about how data is used, who can access it, and what guardrails surround it,” says Reid.

Employees can benefit greatly from systems that collect data and use it to provide better support, training, and communication in the organization. In exchange, however, staff should understand who has access to information like their performance reviews, survey responses, and other potentially sensitive pieces of data. 

Another vulnerability can occur when companies explore partnerships or promotions with applications or programs outside the organization. For example, an employee may provide data to a health and wellness app that is external to the organization without realizing what that could mean for their privacy. 

“Organizations are used to protecting sensitive employee data; however, more applications are being included in employee benefit programs that may collect additional data outside of the company’s usual protections,” says Reid. 

Choosing tools for your HR tech stack that come equipped with built-in privacy protections and access compliance can help reassure employees and organizations that their data will be protected.

HR data is a valuable and dynamic asset you can leverage across your company to refine strategies, make informed decisions, and outperform competitors. Schedule a demo to learn more about using employee data in positive ways in your organization. 

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