Clean data: the role of HR in collection, context and collaboration
HR leaders depend on data. Hiring practices, employee evaluations and salary discussions all rely on the availability and accuracy of data. The problem? While big data tools are great at collecting and storing large information sets, they're not so great at "cleaning" this data, leaving HR pros with the potential to improve best practices but lacking a viable resource.
Raw data needs to be "cleaned" and maintained to reduce the accumulation of "dirty data", which refers to incorrect, inaccurate, incomplete, inconsistent or duplicated data. Data becomes "dirty" in three main ways: user error, poor interdepartmental communication, and an inadequate data strategy . If not cleaned, dirty data may impact your data-led insights, resulting in incorrect beliefs and assumptions, poorly informed decisions and distrust in the analytics process.
Why does clean data matter so much? The cost of bad data can be an astonishing 15% to 25% of revenue for most companies.1
Clean data is "understandable, repeatable and normalized" — but it's not naturally occurring. How can HR empower both department aims and help the organisation at large when it comes to leveraging clean data?
Why Clean Data?
Much like IT, the role of HR has shifted. No longer a niche department, HR is a critical part of long-term business strategy and revenue discussions. As a result, clean data is paramount. HR must be able to understand at scale what employees are doing, what skills they possess and what this means for overall performance. This lets organisations put a clear number on what people have achieved and see how much they contribute to the final business outcome. In turn, businesses can move past performance levels or skill sets as isolated metrics and find their relevance to corporate strategy at large. And it goes without saying that COVID-19 made it all the more necessary to clean your HR data. The global pandemic forced companies to rely on their HR data even more as workforces and internal processes rapidly pivoted to hybrid working environments.
Collection
The first step in clean data? Collection. Astonishingly, on average, 47% of newly-created data records have at least one critical work-impacting error.2
While it's almost impossible to obtain fully cleaned data from initial capture, there are ways to minimise potential issues, such as using pull-down menus to omit typos, implementing automating checks to detect inaccurate data entry and regularly auditing for errors to backtrack and discover root causes.
For example, enterprises might encounter an issue with inaccurate skills reporting. Tracing it back could uncover confusion on the part of staff concerning how to classify particular skill sets. By addressing this issue up front, overall data cleanliness goes up, while time spent "fixing" this data is reduced.
Context
Next up? Context. In HR, context is everything — improving business functions isn't possible without an accurate picture of how specific roles and jobs impact the organisation as whole. Machine learning is often used to help to fill in the blanks, when it comes to data such as job titles. Not all titles are clear about employee function, and many positions report to multiple managers. Salary data is easily misconstrued without information about current market conditions, employee experience and time spent with the organisation. By tapping the "signals" that naturally occur around specific data points, it's possible to add context and improve HR efficacy.
Collaboration
It's hard to know when specific data sets will become valuable. Many organisations get carried away when it comes to tossing "bad" data and cleaning current data. While the result is streamlined and actionable, tossing non-ideal information eliminates the ability to mine this data for insight. ADP suggests adding as much understandable information to the data, and you can then normalize it after the fact. It's part art, part science — HR leaders need to identify the cutoff between "bad" and "useless" data, then throw out the latter and improve the former so it can be used to collaborate and inform decision-making down the line. Put simply? While it might not be spotless right now, imperfect data could offer clear benefits down the line.
HR departments run on data — but they run better with clean data. While HR pros can't be expected to acts as internal data scientists, they're nonetheless instrumental when it comes to empowering data collection, improving data context and amassing data for long-term collaboration. A recent KPMG article cites many inspiring examples: “Club Med, for example, is tapping into data and analytics to better understand how each employee contributes to the organisation, measuring performance while also enhancing workplace training to address gaps or improve service.”3
Resources
1 https://sloanreview.mit.edu/article/seizing-opportunity-in-data-quality/
2 https://hbr.org/2017/09/only-3-of-companies-data-meets-basic-quality-standards
3 https://home.kpmg/xx/en/home/insights/2018/11/hr-data-and-analytics.html
This story originally published on SPARK, a blog designed for you and your people by ADP®.
TAGS: Blog Post Technology HR Payroll Large Business Payroll Small Business Payroll Articles