Why Data Literacy is Essential to Unlocking the Power of your HR Tech

As organisations increasingly turn to HR technology to streamline processes and enhance decision-making, the ability to harness and understand data becomes fundamental. Digital literacy is not just an asset for people professionals but a necessity to help unlock the full potential of their HR tech.  

The Transformative Power of Data in HR 

In the digital era, data has become the cornerstone of informed decision-making across various business functions, and HR is no exception in fact, research shows that six out of ten companies use HR and people analytics to gain insights into areas such as staff shortages, absenteeism or employee turnover. This is only increasing year on year.  

Today, HR professionals have a wealth of data at their fingertips, whether that is disseminating employee performance metrics or digging into recruitment analytics. The transformative power lies in not just collecting this data but understanding how to leverage it effectively.  

Knowing what to measure is key 

Modern HR data metrics are sophisticated and multifaceted. HR needs to be able to identify the relevant metrics that can then be tracked such as employee engagement, turnover rate, time-to-fill for open positions, and performance analytics all of which provide invaluable insights into the health and efficiency of an organisation.  

Understanding the factors influencing employee engagement is one area that can be leveraged using HR tech. Using this to conduct surveys, create feedback forms, and gather performance data can help implement targeted strategies to enhance workplace satisfaction and, consequently, productivity. 

The same can be done for monitoring high turnover rates which can indicate underlying issues within the organisation. HR tech can provide insights into the reasons behind employee departures and then armed with this data, HR can proactively address retention challenges, ultimately saving on recruitment costs and preventing knowledge drain. 

What’s more, in the competitive talent landscape, the ability to fill open positions swiftly is a strategic advantage. HR tech facilitates the tracking of time-to-fill metrics, enabling HR professionals to identify bottlenecks in the recruitment process. This not only saves time and resources but also ensures the organisation doesn’t miss out on top-tier talent. Research from the CIPD revealed that just 46% of organisations collect data on recruitment and retention yet, issues including skills and labour shortages were said to be the main challenges they were experiencing. 

Find out more about reporting metrics with our guide.

Using Performance Analytics to Maximise Employee Potential 

Gone are the days of annual performance reviews as the sole method of evaluating employee contributions. HR tech allows for real-time performance analytics, enabling continuous feedback and development. This not only empowers employees to reach their full potential but also ensures that organisational goals align with individual contributions. 

While HR tech provides a wealth of data, its true potential is only unlocked when HR professionals possess the necessary data literacy skills. Understanding how to interpret and apply the data is a game-changer, transforming raw numbers into actionable insights.  

This is when it is critical to invest in data literacy training for your teams. In fact, as more businesses invest heavily in HR tech, they must concurrently invest in upskilling their HR teams in data literacy. Training programmes focused on data interpretation, visualisation, and application within HR contexts are essential to bridge the gap between technology adoption and effective utilisation.
A study by Udemy found that 80% of people felt learning new skills would make them more engaged at work, so it pays to get your people trained in these essential digital skills. 

Dr. Emily Chen, a leading HR technology consultant, emphasises, “In today’s fast-paced business environment, HR professionals need to be fluent in data interpretation. It’s not just about having data; it’s about understanding what the data is telling us and using it to drive meaningful change.”  

However, with only 25% of workers feeling confident in their data skills, HR has a responsibility to improve digital literacy skills training for its entire workforce. The mere existence of digital training programmes isn’t enough. Instead, HR needs to go deeper and explore those metrics that reveal whether their approach is driving concrete business outcomes – or not.   

Get friendly with the Data Experts 

HR professionals need not become data scientists overnight. Collaborating with data experts within the organisation, such as business analysts or data scientists, can provide invaluable insights. Establishing cross-functional teams ensures that HR data is not siloed but integrated into the broader organisational data strategy, such as its collaboration with L&D.  

Mark Ramos, Chief Learning Officer at Cornerstone has over 25 years of experience working for companies including Google, Microsoft, Accenture, Novartis and Oracle and believes that L&D will be the focal point for tech and data within organisations: “I see the L&D team as the modern-day Research and Development (R&D), playing a central role in exploring, understanding, and responsibly utilising data for the business,” he says. 

Data literacy is emerging as the linchpin in modern organisations and is a skill that cannot be overplayed. HR tech is not a mere tool for automation; it is a catalyst for strategic HR management. As organisations continue to embrace digital transformation, HR professionals equipped with data literacy skills will be the architects of a future where data doesn’t just inform decisions but drives innovation and success.