When faced with a decision to make—regardless of the subject or meaning—it’s human nature to look for data. We all want information to help us make the right choices, justify our assumptions, and validate the actions we will take. In business, data is driving important decisions in marketing, operations, logistics and other essential business functions. We’ve seen that insights derived from data can provide a solid path to better outcomes.
But data about people may never have been as important as it is today. People data is driving better assessments of the workforce and the global economy. From recruiting to compensation to promotions and everything in between, every data point reveals a fact that can help business leaders and human capital management (HCM) professionals make better choices in the workforce . Collectively, this data-driven decision-making can open the door to a more diverse, equitable and inclusive world of work.
How data can inform people’s decisions
With the technology tools we have today, we can mine and use real-time data to track important HR metrics, but more importantly, we can proactively help address HR issues such as turnover and retention. With aggregated and anonymized real-time data, we can begin to see trends emerge and even predict likelihood. Data detailing how long people stay in a job, how much they earn and how often they get promoted can help companies get a clearer picture of where they stand in the context of the global economy. For example, analyzing their people data enables a company to discover the reasons for involuntary departures in their organization. Using these insights, they changed processes, procedures and policies, resulting in a 20% reduction in turnover.
Benchmarking data — knowing what other businesses in your industry or region are paying — can also mean the difference between attracting talent to your organization or losing them to competitors. Today’s labor market has more jobs than candidates and is constantly changing. Companies need to understand how they compare to other companies in terms of compensation, benefits and other key employment factors. In this environment, having up-to-date HR intelligence is critical.
Without a doubt, accessing this kind of detail in your people data can help your organization be more competitive in the talent market. But perhaps more importantly, this transparency into people analytics can help you identify gaps in representation and equity and take meaningful steps to close those gaps. Society needs to continue to push for an inclusive environment for everyone, and the first way to do that is to measure progress. If you can’t measure progress, then you can’t adequately assess whether you’re improving people’s situations.
Examining a key DEI challenge, let’s consider pay equity. At the end of the day, there is nothing more important than making sure that people’s contributions are paid correctly and fairly. In the past, it has been difficult to accurately assess pay differentials. We’ve known about gender pay inequalities for some time, but they’re often too high for companies to actually take action. The resulting discussion around the source of the problem and how to fix it also became too advanced. This doesn’t help leaders and HR professionals who want to reduce pay inequality in their organizations. By analyzing internal HR data and then comparing it to benchmarks across industries, demographics, geographies, functions and roles, companies can now pinpoint where their organizations are missing the market.
One misconception is that hiring people at higher pay rates will help close the gap. If you bring people in, you’re not actually creating upward mobility within the organization. By examining compensation across various positions and companies, and assessing what a promotion really means to someone, organizations can better understand where they may need to adjust their course.
Pay transparency is another important and oft-forgotten factor in closing the pay gap. Data that can give employees more information about co-worker compensation and provide more information about similar roles in their industry can help underrepresented employees gain bargaining leverage.
Data can help organizations proactively address these inequalities, resulting in improved employee retention and better access to talent. Data helps you see around corners and acts as a flashlight, illuminating dark places along the way. We can use data to determine when people are not getting paid what they deserve. We can create tools to plan and budget to adjust for these pay gaps. Ultimately, the goal is to turn real-time data into actionable insights and workplace solutions that help businesses and people thrive. By February 2022, 75% of customers using the solution experienced improved pay equity, resulting in a $1.1B impact on US communities.
Driving change through data
It is important for organizations to reflect on what is visible in their people analytics, looking for context and connections that have uneven effects. When patterns emerge, examine what happened before to understand potential causes and customize suggested solutions. As you create a better, fairer work world, focus on removing barriers to progress and building programs and policies into your workplace culture that allow your employees to bring out their best selves. By using data to guide your efforts, you can achieve meaningful change and be part of a benchmark that challenges others to follow.