It’s no revelation that HR needs data they can trust to make informed decisions and accurately track the outcome of these, whether that’s how they ripple out to the business, or it’s people. Despite this, research indicates over 80% of organisations are relying on stale data, leading to misled decision making – which inevitably comes at a cost in one way or another.
Meanwhile, other studies indicate businesses that foundation their decisions on data are 19 times more likely to be profitable, and six times more likely to retain customers. But accessing and producing data you can trust is often where HR faces their challenges.
The Bias Problem
HR faces many obstacles when it comes to authenticating the trustworthiness of such data. Sometimes it’s merely a matter of misunderstanding or human error, but it can get more complex. For example, bias can worm its way into data in numerous ways, such as through an employee performance review being skewed by the line manager’s personal biases – whether conscious or unconscious, positive or negative – the consequences of inaccurate data are damaging.
A recent Harvard Business Review article covers the benefits an organisation saw when they took a data driven approach to resolving internal bias, after their D&I director checked a sample of performance evaluations and noticed some red flags. This process of improvement involved removing open-ended prompts and asking for ratings to be backed up by at least three pieces of evidence. This not only benefited the employees, but also the future prospects of the company, as it allowed HR and leadership to make a more effective assessment of the internal skills available and the contributions which has been made towards the company’s success.
The HR Skill Gap
Traditionally, HR professionals haven’t had to spend such a significant amount of time in their role crunching numbers or working with large data sets. Human Resources have been – and still are – people focused by nature. This is still vital for many of the responsibilities which sit on HR’s plate. However, as data becomes the backbone of what can inform these practices to drive the best employee experience and the most business progress possible, a necessary expansion of skill set draws nearer.
70% of company executives cite people analytics as a top business priority. This presents an opportunity for HR to advocate for the needs of their culture and people in a form that senior leadership are becoming more in tune with. This is where accurate data is HR’s best ally, providing the solid facts needed to present their most pressing cases to the board or C-Suite, and allowing the team to action on the solutions effectively.
Where does AI fit?
Artificial Intelligence (or AI) describes a growing category of technologies that utilise neural networks or ‘deep learning’ to simulate intelligent behaviour. There is a wide selection of different techniques and use cases when it comes to AI that includes algorithms, chatbots, voicebots, semantic analysis and machine learning.
42% of large companies are using AI to help their HR teams. There is understandable concern and scepticism around this. As AI is manmade, it is flawed, and risk comes with the fact that whatever data you feed it with will inform the decisions it makes - so if your data is false or biased, what the AI produces will be too.
Denis Wallace Barnard, a digital transformation specialist who has been in the HR & payroll software arena for over 30 years, has expressed caution about the revolutionary potential of AI in HR, citing an event where AI selected new managers based on the demographics and experience of other managers within a company. As the managers were almost all white, middle-aged men, the AI selected someone of the exact same demographic. Though this instance was a poor reflection on AI, Denis does see some promise for its future use in HR, not as a decision maker, but a sentinel:
“The role of sentinel is a key one; anyone who has seen large companies fined for paying below minimum wage or continuing to hire in conflict with their stated DEIB aims will appreciate the benefit of having all transactions reviewed against legal and company-specific guidelines.
Added to which, we see the rise of quality AI assisting in the triage of work-related employee problems. As the bots are not judgemental, it has been found that people are happy to open up to them, beyond which a series of referral interventions can be initiated.”
It seems the role of AI in the future of HR could be to improve upon the existing technologies and HR systems already in place. But for this improvement to be effective, HR teams will need to already have clarity over their data, and already be incorporating data-driven decision making to improve recruitment, onboarding, and employee development.
As businesses grow and workplace norms evolve, HR needs to as adapt. However, many obstacles can be faced in this journey, notably stubborn technology. As the world becomes more complex being able to drill down into the data which can clear the mist has become more important, but some solutions are simply unable to meet this need. We are proud to say Bridewell were able to see vast improvements in this area after switching to XCD:
“A single source of truth is critical. Having a platform that you can use – that everyone can use – means that you can make the right business decisions based on the right data.” – Ruth Billen, CFO at Bridewell
XCD are going to be at the CIPD’s Annual Conference and Exhibition in Manchester, on the 8-9 of November 2023. Click here to learn more and sign up – we look forward to seeing you there!