“Gutting” The Guesswork Out Of HR Decision Making

Dr. Christian Schmeichel

“How do leaders make decisions?” Executives were recently asked this question in a study from The Economist and PwC. In a world full of data, surprisingly, only 29% reported that they put the most reliance on hard data and analysis. Seventy-one percent rely on gut feeling or other input.

While gut feel may work in some situations, data and hard facts are critical when making business decisions. This is particularly true for cases where decisions may impact people, the most valuable asset for many companies. Advanced analytics empower our HR and business leaders to better evaluate people-related information before making decisions on topics like retention measures, performance management, leadership, or succession planning.

When it comes to the area of human resources, data-driven insights are often still far from where they could be for many reasons, like the availability and quality of data, data privacy concerns, or emerging technologies. But there are some things you can do to help your organization and leaders to rely less on gut and more on hard facts.

Here are three steps to help you “gut the guesswork” and transform into a data-driven HR organization:

1. Get accurate data

If data is outdated or inaccurate, your reporting is worthless. What if decision makers could get an accurate, real-time view of their KPIs from the high level and down to the individual facts? 

HR dashboards that collect and combine the most relevant data from multiple systems and organize it into a digestible format for management are key. Dashboards allow leaders to identify trends, keep critical business- and people-related questions and issues top of mind, and reveal what best practices drive business results. 

The bottom line? Aggregate and present people-related data in a meaningful way that allows your business to make data-driven decisions.

2. Grow a data-driven culture

Data should be used in every piece of research for a company. Educate your employees about why it’s needed (highlighting the competitive advantages) and explain that it is the way to establish your company’s metrics for success.

Once you have the data to prove success or failure (because you can always learn important lessons from failure), it’s critical to convince leadership from the top down of the value and meaning of the data you’ve collected. The C-suite should get into the habit of asking for numbers and research and mandating towards a closed-loop reporting system.

The bottom line? Make confident decisions based on true data, which is empowering at all levels of a company. 

3. Enable your people to understand data

If only a few people have the skills to interpret and understand data, the company will have a tough time leveraging their knowledge on a large scale. Spread knowledge and diversify your investments! As HR continues to transform, those who understand the data science and its strategic impact to drive HR as a business will be at the forefront of leading organizations through change.

HR data scientists who are well-versed in data management, analysis, and interpretation will be crucial to create an impact on the overall business. They also need to have the strategic and business knowledge to link insights to business outcomes.

The bottom line? The more employees who understand and can analyze data, the better positioned your organization will be for success.

So, how do leaders make superior decisions? With hard-core facts, data, and analytics – all the things that take the guesswork out of decision-making and steer us more confidently into the future!

For more on digitization, work, and HR, visit the SAPFutureFactor Web Salon, in which HR executives and thought leaders from science/academia discuss the digitization of work.

Dr. Christian Schmeichel

About Dr. Christian Schmeichel

Dr. Christian Schmeichel is Senior Vice President of HR at SAP for the board areas Technology & Innovation, Intelligent Enterprise Group, Finance, and HR. He is a passionate advocate for running HR like a business and co-shaping the future of work. Follow Christian on Twitter @Schmeichel_C.