Just as computers revolutionised the workplace in the past, data literacy is now the key to unlocking future success for individuals and organisations alike. C-suite executives around the globe are predicting that by 2030, data literacy will be just as important as knowing how to operate a computer. Similarly, our Insight222 report “Upskilling the HR Profession Building Data Literacy at Scale” found that 88% of CHROs surveyed consider people data and analytics critical to their HR strategy.

However, amidst this growing recognition of the importance of data literacy, HR professionals and people analytics teams responsible for the data literacy training of HR are facing significant challenges in fully embracing data-driven practices.

The Gap in HR Data Proficiency: Challenges in Harnessing People Analytics

According to a recent XpertHR survey, 57% of HR professionals believe their departments don't gather enough data to effectively measure their own employee performance., which is likely to be a result of only 32% of HR functions having individuals equipped with the data proficiency skills and experience needed to harness the full potential of data-driven HR strategies.

The challenge remains for business leaders and HR professionals to develop an understanding of the needs and capabilities of people analytics and grasp how it can be used effectively in the workplace. But what's holding them back?

Lack of Awareness

One of the fundamental challenges in the adoption of people analytics in HR is the lack of data awareness. Many HR professionals lack the data proficiency to understand the value of data and what it can do for them. Without a clear appreciation of how data be used, HR teams will likely neglect or overlook the opportunities that arise from using data-driven insights and people analytics solution together.

Data Quality and Integration

Lack of data quality, often due to disparate data from multiple sources, is a common hurdle in people analytics. Not only can this be an issue of data integrity, but it can also be the reason for the data interpretation challenges in HR that make it difficult to extract actionable insights from such sources. This makes it difficult for HR teams to make informed decisions based on the data and trust any insights they glean from it.

Fear of Data Misinterpretation

When it comes to understanding data, HR professionals often find themselves in a position of limited technical expertise. These data interpretation challenges and the fear of making the wrong decisions based on limited knowledge can be a real barrier. And when you have fragmented data, the fear of misinterpretation and resistance to making data-driven HR strategies increases.

Accessibility and Tools

HR professionals require intuitive tools that facilitate data exploration and data analysis without extensive technical knowledge. And people analytics require these tools if they are to democratise or even productise solutions. Without such tools, it can be difficult for HR teams with limited technical expertise to make sense of data in a useful and time-effective manner.

Time Constraints

This brings us to the next point on time constraints. In their research, XpertHR found that 63% of HR professionals quoted time constraints as a reason for not using more data in their decision-making. Whether that be time-limited to undergo analysis or time-restricted in waiting for the insights from people analytics teams and having to make decisions without them, insights need to be delivered quickly and effectively. This limited-time to can be a factor in their resistance to change and adopt people analytics in their day-to-day decision-making.

Data Privacy and Compliance

Dealing with sensitive employee information demands a meticulous approach to ensure confidentiality and comply with data protection regulations like GDPR. And when unaware of how this relates to collecting data based on personal work information such as email sentiment analysis, it can cause many HR professionals to pause and become overwhelmed.

Resistance from Leadership

Our latest Insight222 research “Upskilling the HR Profession Building Data Literacy at Scale” mentioned above found that role-modelling from the HR leadership team is essential in order to cultivate a data-driven culture. And without it, HR professionals are less likely to actively develop their literacy skills or use data analytics in their day-to-day decision-making.

Therefore, if there is resistance from leadership to the use of data, this can be a major barrier to developing the required understanding and knowledge to embed a successful people analytics strategy.

Return on Investment (ROI) Concerns

Last but certainly not least, ROI is always a factor when it comes to investing time and money into an HR analytics project. So, the question of whether people analytics can deliver tangible results becomes one of the major challenges for HR professionals.

This links back to the unawareness of the business value that data and analytics can bring and the need to demonstrate ROI to receive investment into people analytics.

Overcoming Data Literacy Barriers

Despite the challenges HR professionals and people analytics teams face in developing data proficiency skills, there are ways to overcome these data literacy barriers. Below are some of the key strategies you can take to enhance HR Data Literacy and the adoption of people analytics:

Democratisation of Data

Eight Steps for Success When Democratising People Data (Source: Insight222® Limited 2017-2022 | All Rights Reserved)

Promote data accessibility by democratising access to data and insights across the organisation. Providing easy-to-use analytics tools and fostering a culture of data sharing and collaboration can improve data literacy across all HR teams.

Productisation of People Analytics

Transform HR data into valuable products and solutions that drive business outcomes. Make it easier for busy HR professionals to access people analytics insights by productising solutions and using automation where possible. This also allows for people analytics functions to focus on more strategic and value-added activities.

Investing in People Analytics Technologies

To achieve the democratisation and productisation of people data, there needs to be investment in people analytics technologies. Investing in AI and machine learnings based data solutions and self-serve analytics tools, HR and people analytics teams will have the tools they need to quickly and easily create data-driven HR strategies.

Upskilling Programs

Most importantly, organisations should invest in comprehensive data literacy training programs tailored to HR professionals. These programs should include data analytics skills, data ethics, storytelling, consulting, change management, organisational, political acumen, and executive-level influence.

Strengthening Data Literacy for HR Success

The importance of data analytical skills for HR teams cannot be underestimated. By taking the necessary steps to democratise data access, productise people analytics insights, investing in technologies and data literacy training programs, HR teams can transition from traditional methods to the adoption of people analytics, thereby strengthening their organisational performance.

At the end of the day, enhancing the HR function with data literacy is a voyage, not a destination. It requires clear leadership from the top, a supportive culture for learning and data sharing, and an understanding of the business value that people analytics can bring. With these key elements in place, HR teams will be well-equipped to leverage data and insights to drive business decisions.

Enable Your People Analytics Leader and Drive Business Success With Our Insight222 Consulting Service

The right partner can help you on this journey. That's why at Insight222, we have created our 'Enable' consulting services to support you in developing a successful people analytics program and empower your new People Analytics Leader. Through this process, we will help clear the path for the new leader by understanding the current state of your people analytics, identifying key stakeholders, and supporting them during their first 100 days.

Our experienced team of people analytics consultants can help you maximise your HR analytics initiatives and unlock greater business value. So, if you're ready to take your people analytics to the next level, contact us today.

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