Are you data-led? Or is the data leading you astray?

You might recall?people saying a few years back that data would become the next oil. The Economist published an article citing it as the most valuable resource?back in 2017.?Nearly five?years later,?we’re?collecting more of it than ever. But here’s a little reality check.??

No one?actually cared?about oil until we could use it?in trade, at home, and for our cars.??

In the same way, data in and of itself is practically useless.?It’s only when we have the analysts smart enough to?dissect?our noughts and ones, that we?actually begin?to see the benefits of having it in the first place.??

This is why?many business leaders – in their efforts to become data led – are letting data lead them astray.?Things start off strong, with?70% of businesses leaders considering people analytics to be a top priority, according to McKinsey.??

Yet, Accenture recently published a survey?that?shows?only?21% of respondents feel confident in their ability to interpret and work with data.?So,?what we’re seeing is, people?recognise?the value of the information they collect. But they have no idea how to use it.??

This can lead to all kinds of problems. The collection and retention of useless or incomplete data sets. Decision making based on flawed or limited information. Regulatory and security breaches.?Greater discrimination within your hiring practices and business culture.??

Dave Graham is?a?technology advocacy lead at Dell Technologies.?In a?recent conversation?we caught up about the?perks?and pitfalls of a data-driven future of work.?What stood out to me, is how ethical use of employee and candidate data can guide successful talent acquisition, resource management and skills development.??

So,?let’s?start there.??

Your people and their data?

For the purpose of?this section,?we’ll?focus on?your employee and candidate data. This scope of information comes under the ‘people analytics’ profile – the data that is usually found in your ATS, or HR?software.?

People analytics can help you?identify?pay disparities, gender?inequality, and even highlight low levels of productivity. You can analyse metrics from?different parts?of the?business and?make decisions about how to plug skills or engagement gaps based on departmental data.??

These?perks?sound great, but?the information you find in these platforms will always show a more condensed version of the truth. Assessing sentiment based on numbers, percentages, and KPIs is tricky.??

Business leaders need to make sure?they’re?backing up the digits with conversation and cross-departmental collaboration. Invite feedback and conversation with your employees to make sure?you’re?hearing the full story, and not misinterpreting the numbers.??

As we tirelessly tackle?talent drought,?it's?never been more important to accurately predict your recruitment?needs. Ineffective or?poorly judged?hires waste precious time and resources.?Having a good grasp on your employee data means you can?identify?which team members have been most successful at your?company and?use this to influence the type of candidates you look for.??

Read that last sentence again. Influence, not direct. There are plenty of middle-aged white men in boardrooms, and if the only thing?you’re?using to guide decision making is data (and not company-wide conversations), your boardroom demographic will quickly go stale.??

But?by knowing exactly what skills and?capabilities?you have at your?disposal;?you can build more?accurate?budgets.?It might be that your current team?isn’t?as engaged as?you’d?like them to be. And shifting focus to your existing team might partially plug the productivity gap.?Or?it could reiterate the fact?you’re?still missing the right people.??

Data can draw attention to some of the more empathetic issues in your workplace too. Things like how much holiday and sick leave employees take, and whether workers need to be encouraged to use their annual leave and?make time?for their wellbeing.??

Steps to a healthy data-led organisation?

If?you’re?not sure which data to collect, use, or analyse, ask yourself this question: why are you collecting it in the first place? What do you want to achieve with it? Anything that?doesn’t?add value or that?isn't?actively used?to improve the lives your employees and meet?regulatory standards should be?never make its way into your business.??

For what you do choose to collect, match your collection capability to your analytic?capacity. Basically, hire a bunch of analysts who can?interpret and?report back on the information.?Challenge your existing hiring practices too –?don't?just complete them because?they’re?the norm.??

Is there any?particular reason?you’re?asking for gender, or?details that allude to someone’s background on your application form? If?you’re?still collecting that information in your ATS,?there’s?every chance?it’s?contributing to discrimination instead of mitigating it.??

Last but not least, the aim should always be for the data to enhance the decision-making process, not hijack it entirely.?Data will continue to play a more intrinsic role in business, but that?doesn’t?mean we can put our feet up and stop being intentional about its usage.?Don’t?let data lead you astray.?

Gavin Fox is a Director at Martinsen Mayer, the tech recruitment firm VCs trust

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