Like any other management function or indeed any other profession, HR continues to evolve. One of the most notable features of this evolution over the past 30 years is the slow but steady rise in the use of data to inform HR decisions and actions. Since HR first emerged as a function it has, of course, always used data. So what’s actually changed over the past few decades?
What’s changed in HR’s use of data?
First are the various technologies that have allowed HR to collect, store and analyse a range of different and sometimes new types of data. Identifying links between employee characteristics, employee behaviour and individual, team and ultimately organisational performance allows the HR function to focus its activity in ways that improve performance.
Our ability to not only gather more data but, crucially, to do more with it continues to develop. However, as we go on to discuss below, progress has been slower than we might have hoped.
A second and quite profound change is the positioning of HR as a function whose role is not only administrative but also strategic: focusing on supporting the organisation to achieve its objectives. Effectively fulfilling this role requires HR, like other management functions, to use data to first, identify the most important issues faced by the business and, second, consider what HR can then do to help the business achieve its objectives.
It is in this shifting context that people analytics emerged as a way of linking HR’s developing capacity to collect and analyse employee and performance data with the growing requirement for HR activities to contribute to business outcomes.
What exactly is people analytics?
People analytics has been defined in rather different ways. This is one of the more comprehensive definitions from Janet Marler and John Boudreau: “A HR practice enabled by information technology that uses descriptive, visual and statistical analyses of data related to HR processes, human capital, organisational performance and external economic benchmarks to establish business impact and enable data-driven decision making.”
In other words, it’s about using organisational data and sometimes external economic benchmarks to identify the impact of HR initiatives and to provide information to guide decision making.
There is of course nothing novel about the idea that any practitioner in any field should use data to establish the effects of their work and to inform their decisions. In fact, it would seem very odd if any practitioner did not do this. However, what is perhaps surprising is that it is only relatively recently that this idea has been explicitly discussed in relation to HR practice.
What is evidence-based HR?
But what about evidence-based HR? Is this also a new idea? And what does ‘evidence based’ mean?
The term ‘evidence-based practice’ originated in medicine in the 1990s. Since then, it has had a profound effect on medicine and been highly influential in a number of other fields including education, design, healthcare management, policing and policy making. It makes sense that any profession committed to its effectiveness should base what it does on evidence.
HR is yet another field in which practitioners have more recently started considering and sometimes applying the principles of evidence-based practice. So what is evidence-based HR?
In our recent report, Strong Foundations: Evidence-Based HR, we define it as “…a process which delivers better-informed and hence more accurate answers to two fundamental questions: first, which are the most important problems (or opportunities) facing the organisation which are relevant to HR activities? Second, which solutions (or interventions) are most likely to help? In other words, what’s going on and what can we do about it? These questions are answered through a combination of using the best available evidence and critical thinking.”
It's immediately obvious that while evidence-based HR has some similarities with people analytics, it also has some differences. These differences become clearer when we consider the three main principles of evidence-based practice also discussed in our report:
Principle 1: Incorporate multiple sources and types of evidence and information. A well-informed decision needs to triangulate and contextualise evidence by looking across several sources that includes but is not limited to organisational data. EBHR typically uses four sources: stakeholders’ views, perspectives and judgements; professional expertise of practitioners; data and evidence from the context or setting; and scientific findings.
Principle 2: Adopt a structured and explicit process of gathering and using evidence. It’s easy to get lost when gathering and evaluating evidence hence having structure is essential. One part of that structure is to completely separate the identification of the problem (or opportunity) from the search for the solution (or intervention). The second part is to follow an explicit six-step process that starts with identifying the question:
- Design and ask answerable questions to help identify the problem/opportunity for solution/intervention
- Collect evidence of different types from multiple sources that will help answer the question
- Rate the trustworthiness and relevance of the evidence
- Aggregate the most trustworthy and relevant evidence
- Apply this evidence to answer the questions that help identify the problem/opportunity for solution/intervention
- Assess the process and outcome
Principle 3: Focus on the most trustworthy and relevant evidence. We are now surrounded by more data and evidence than ever before. Much of this data is likely to be unreliable and/or irrelevant. Making better-informed decisions doesn’t mean using all the available information as a significant proportion of it is likely to be misleading. Rather, we need to actively sift through what we have to ensure we use only the most trustworthy and relevant information.
What are the differences between people analytics and evidence-based HR?
While the overall purpose of people analytics and evidence-based HR are similar in that they both aim to help practitioners make better-informed decisions they are different in several important respects.
People analytics or evidence-based HR?
One way of answering this question is to bear in mind that people analytics is simply a part of evidence-based HR. When we practise HR in an evidence-based way we would also be doing people analytics as organisational data is one of four sources of evidence we include.
While people analytics is a welcome and necessary development within the HR profession and certainly goes some way to helping HR become more effective, it is not, on its own, enough.
By incorporating multiple sources of evidence, taking a structured approach and focusing on the quality and relevance of evidence, evidence-based HR is much more likely to ensure that HR is more relevant to the business, more accurately identifies what’s happening and that specific practices and policies are most likely to help the business achieve its objectives.
Rob Briner is professor of organisational psychology at Queen Mary University of London’s School of Business and Management, and associate director of research at the Corporate Research Forum