The Benefits of a Data-Driven HR Strategy (And How to Build One!)

A data-driven HR strategy can support your organization’s business objectives while building a stronger company culture and a more successful, trusted HR team.

With human resources using programs to make employee data collection easier, from HRIS or employee engagement platforms like Cooleaf, professionals can now validate initiatives, show growth, and get leadership buy-in.

Unlock the full potential of your HR strategy in 2024 and beyond

It’s time to position HR as a strategic leader in your team.

"When the CFO's organization speaks the truth, people see it as truth. That's my aspiration for us in the people and culture space,” said Kevin Henry, Executive VP and Chief People Officer at PulteGroup.

“To achieve this, we need a strong command of the facts, understanding the correlation between our actions and their outcomes, and why it matters to the organization.”

Data-driven HR is a trend here to stay. Read on to see how looking at HR analytics can help your department create winning strategies and how you can make your own.

1. Diagnose issues early

Once you start tracking data points like employee Net Promoter Scores (eNPS) or employee turnover rates, you’ll find that your team can surface opportunities early.

For example, if you find talent acquisition costing exponentially more this quarter, that gives you a reason to investigate and diagnose the issue. There might be a longer timeline for recruiting. Maybe you’ll see more candidates jump ship later in the interview process. The recruiting agency you use might have increased their rates. Once you discover the potential issue, you quickly devise a solution.

Staying on top of your data analysis will give you that high-level view of what’s working most effectively, what needs revisiting, and what’s eating up time and resources.

2. Boost employee engagement

Okay, at Cooleaf employee engagement is our jam, and we’ve seen time and again how it can increase overall company culture but also business goals too.

However, to build a successful engaged workplace, we recommend routinely tracking the success of initiatives, like ERGs or workplace well-being programs. This can look like taking a pulse survey following a company-wide step challenge or working closely with your ERG to see if you’re meeting diversity goals, like helping more underrepresented demographics achieve leadership roles.

Combining a data-driven culture with how you nurture company culture will ensure you’re not just hosting events, activities, or increasing benefits because it shows the organization cares. The power of data will help you determine which events, activities, and benefits would mean the most to your people, so you can make informed decisions about you invest your energy and finances.

3. Reduce attrition and support retention

Many HR leaders use employee data like attrition or retention to keep a pulse on employee experience and company culture.

For instance, if turnover rates are high, this could indicate issues in an employee’s lifecycle. You would naturally dive into the entire process from recruiting to career development. See if employees are leaving after two years, whether your company’s investing in their growth, or even if people are happy at your organization. This additional data can help you revise processes throughout the year.

As HR professionals look at KPIs to drive strategy, changes will impact how they manage talent and overall culture for the better.

4. Better decision making

The more you study your people analytics, the stronger your HR department will be for making future decisions. How should you allocate the budget? Where in the HR team do you need a new hire? What should your goals for the new year be?

For example, you can utilize your data analytics to improve succession planning. For large organizations, you might see less growth in managers at a certain level and want to invest in career development. For smaller organizations, if you’re looking to train and retain the next generation of employees to take over, what is your attrition rate? How long does onboarding take for new hires? How long are employees staying?

A strategic mindset means you’ll be able to make more informed decisions for your team and track progress towards your success.

Safe-Guard International uses Cooleaf to engage their people. Sylvia Taylor, Chief Human Resources Officer, Safe-Guard Products International, spoke to Cooleaf about how her team combined two points of data to make a successful return to office.

“We used a cross-functional employee focus group to tell us in real-time what was important to them and what were some things we could do as an organization to make their return more effective and productive,” Sylvia said.

“From that, we learned that folks wanted a way to jumpstart collaboration and teamwork within the organization.”

They also used an employee engagement survey through Cooleaf. A Customer Success Manager walked them through their data to help analyze the findings and make suggestions.

“We learned a lot of things. Some were surprising. But we found that key areas of concern were validated in the survey around employee collaboration and teamwork and onboarding,” she said.

To support organic connection in-person, the organization decided to build a communal coffee bar in the center of the company. They saw it increased not only collaboration but also productivity.

“Employee feedback is very important to us. And any leader or organization worth its weight knows the link between customer satisfaction and employee satisfaction,” Sylvia added.

5. Grow and develop your DEI

Following the Pandemic, many organizations implemented DEI initiatives like new recruiting processes so teams can reflect the diversity in the real world to employee engagement programming so teams can create strong sense of belonging at work. Large organizations like Google and Atlassian set KPIs based on how they recruit, who was in leadership, and what departments had which demographics, so they could align with ERGs, employees, and leadership to unearth potential bias in their processes and make systematic changes.

Additional DEI data points like whether your organization showcases enough racial diversity, age, or people with disabilities in your marketing efforts or whether you’re allowing other demographics to speak during big team meetings can also help you make a concentrated effort. For these metrics, you don’t need a huge database, but you can build and track your own in a spreadsheet as you host and plan.

6. Improve employee experience

Strong employee experience goes further than just employee morale. Happier employees are more likely to recommend their place of work to friends. A strong company culture means better employee retention and even attracting top talent.

This more effective talent management supports performance and business objectives, not to mention saving on cost.

HR analytics like employee sentiment, onboarding success, employee recognition, and attrition can give teams concrete facts so they can optimize an employee’s journey at the company.

7. Get leadership buy-in

If your team wants to invest in an employee recognition platform or launch a new corporate well-being program, this will take time and money, which might be a difficult ask when approaching leadership buy-in.

While a manager might not see the benefit of regular recognition to their people, human resources can show the purpose of this method. That can be growing that sense of purpose or performance, which you could show from employee sentiment metrics or even tickets closed in an hour for a business. You can also track recognitions for a business quarter and see if your team closed more tickets or resolved more cases.

Leadership responds well to a metrics-based approach and having the numbers to back up your priorities will support your reasoning and later show your success.

How to Develop Your Own Data-Driven HR Strategy

• Define the business objectives your HR strategy will support

This can be anything from productivity to retention

• Identify your data sources or data collection process

Consider which employee data will you use, how often you’ll collect it, and why you’re looking at these statistics. If you want to grow employee engagement, that might mean looking at participation in ERGs, and then following up with a pulse survey each month to check sentiment on DEI.

• Collect and analyze your data

Recognize patterns, trends, or even outliers over time. For instance, if you launched a mentor program a year ago, you might see employee happiness grow over three months, but also see an increase in an employee’s lifecycle at the end of the year.

• Develop and communicate your findings

Relay to leadership and your people (if applicable) where you’re starting. Set goals for where you want to grow and how you’ll follow up on these goals.

• Launch your HR initiatives

Depending on your goals, build programming or initiatives to support your data analysis. You might want to invest in that corporate DEI coach, try a new hiring agency, or even host more in-person conferences for your remote team. Point to which goals these support and what you’re testing.

• Monitor, evaluate, and grow

Prepare to track month-to-month, each quarter, or even every six months for new initiatives. Prove that that new benefits program helped change employee morale. Show progress with new hire success rate over time.

Data-driven HR is the future

Cooleaf is here to help organizations put people first with metrics-driven solutions. Our Customer Success Managers help teams with their own unique goals, whether that’s increasing remote team engagement or increasing sales performance.

Best of all, Cooleaf Customer Success Managers walk you through data from app participation to survey results to help your HR make strong decisions for the future. Reach out if you want to know more!