The desire for valuable data and insights is growing. Chief Data and Analytics Officers have seen a significant increase in the value of data and analytics from 2016–2023.
So, it’s no surprise that this interest in data analysis is bleeding into HR. In fact, data analytics is the third most desired recruitment tool.
Data-driven HR gives you valuable insights into streamlining your processes, elevating employee experiences and improving business performance. It can also enhance the patient experience, ensuring employees have the right skills to deliver quality care.
In this article, we uncover the value of a data-driven HR strategy, the challenges you might face when analyzing HR data and how to create a data-driven HR strategy for your healthcare organization.
What is data-driven HR?
Data-driven HR involves analyzing data to identify trends, patterns and areas of improvement in your HR operations. This data includes the following:
Employee performance
Professional skills
Training requirements
Recruitment activity
Turnover rates
Retention rates
Employee engagement
Absent rates
Diversity ratios
HR costs
Average employee salary
Effectiveness of HR software
Evaluating and comparing this information allows you to make strategic and informed decisions about your HR processes. As a result, you can make your HR processes more efficient, improve the employee experience and help employees deliver the best quality of patient care.
Why is data important for HR?
The development of technology has impacted the use of data in HR, particularly in healthcare. AI, for example, is disrupting healthcare HR, improving candidate matching, reducing bias in recruitment and using predictive analytics to create effective recruitment strategies.
If you’re not using technology to analyze data and inform your HR strategy, you could miss out on these valuable opportunities.
Take a look at some of the other reasons a data-driven approach is important for your healthcare organization:
Plan, schedule, and manage your workforce
Analyze historical and real-time data to ensure you plan your workforce effectively. For example, scheduling the right number of employees (with the right skills) are available to meet patient needs.
Improve talent acquisition
Identify the most effective talent sourcing channels, evaluate the time to fill positions and assess the quality of hires in a central location. This helps you refine your recruitment strategy, reduce the time and cost per hire and ensure you hire the best staff to deliver top-quality patient care.
Identify skills gaps
Use HR data to pinpoint areas of improvement in employee skills. Deliver training to ensure all staff are competent and confident to deliver patient care to the best possible standard.
Are there any drawbacks of data-driven HR?
Although there are plenty of benefits to data-driven HR, there are some challenges to consider:
Quantitative metrics (such as HR costs) are simpler to analyze, so it’s easy to focus heavily on this data, but they don’t paint a complete picture of your workforce.
Qualitative aspects (including employee morale) represent nuances of the employee experience. Understanding these nuances is vital to HR operational success, especially for healthcare leaders.
It shows you how employees are feeling, what they’re thinking and what you can do to improve the employee experience. As a result, you can create a happier workforce and boost employee retention.
How you interpret HR data can influence the success of your HR strategy. Misinterpreting what the data reveals can lead to poor decisions that, in some cases, impact organizational directives.
You need a thorough understanding of the context around your data to make the right decisions and deliver the best patient care.
You need to measure the right data to change your HR processes successfully. If you spend time analyzing data irrelevant to any issues you want to overcome, it’ll be hard to make informed and strategic decisions about improving them.
For example, if you want to improve scheduling or employee performance, look at metrics such as projected schedule vs demand, absenteeism, staff-patient ratio, workload to skill level, overtime, and adherence.
How to create a data-driven HR strategy in 5 steps
Read through these expert tips and advice to create an effective data-driven HR strategy.
1. Identify the right HR data
The first step is identifying the data you need to analyze to make informed and strategic HR decisions for your healthcare organization. Follow these steps to pinpoint the data:
Outline your goals
Start by identifying the goals of your HR strategy and be clear about them from the outset. Do you want to minimize talent shortages? Increase the retention rates of your dedicated care staff? Familiarizing yourself with these goals early helps you narrow the data you need to measure to achieve them.
Pinpoint areas to analyze
For example, if you aim to improve the onboarding process for care workers, you might track hiring durations, gather employee feedback etc. Or, if you want to improve the quality of patient care, you could track patient feedback, staff-patient ratio and employee skills.
Set metrics and key performance indicators (KPIs)
These metrics should be realistic, specific, and measurable. If you fail to provide clarity or create unattainable metrics, your chances of success will deteriorate.
2. Invest in human capital management (HCM) technology
HCM technology is a valuable tool for HR leaders. It goes beyond a traditional HR management platform, allowing you to control and streamline your workforce operations.
An HCM platform also provides access to various HR data. From talent acquisition to benefits administration, you can analyze data from all aspects of your HR processes, which helps create a robust, data-backed HR strategy.
Here are the data-driven features to look out for when choosing an HCM platform:
Real-time data analytics to make quick and informed decisions based on up-to-date information.
Dashboards and reporting to visualize key HR data at a single glance.
Automation to improve efficiency and streamline processes.
Cloud-based software to have more flexibility and improve accessibility.
Artificial intelligence to automatically identify areas of improvement.
Machine learning to analyze and learn from historical data.
3. Use predictive analytics
Predictive analytics is a form of machine learning that involves analyzing historical data to predict future performance. As a result, you can create an HR strategy incorporating future trends and outcomes.
Let’s look at some examples of how predictive analytics can forecast trends in your healthcare workforce:
Identify busy and quiet periods to improve scheduling and reduce costs from overstaffing.
For example, predictive analytics can identify the optimum level of staff required during any given period. This means you can schedule the right number of employees (with the right skills) to ensure patients receive the best possible care.
Anticipate employee churn ahead of time, giving you a chance to attract and hire ideal candidates from your talent pipeline.
It also helps you focus on how to reduce turnover rates and boost retention. For example, it can identify which roles have the highest turnover. With this information, you can focus on improving the employee experience in roles that have higher turnover rates.
Flag gaps in experience to improve employee knowledge and skills and deliver excellent patient care. For example, if care workers have left feedback about challenges with moving and handling, the system will let you know that further training might be necessary.
4. Create data-driven HR policies
Data-driven HR policies ensure that employees follow the most effective processes and practices.
For example, you could analyze data around employee shift swapping. Using this information, you create a policy for requesting schedule changes that streamline swaps and make the process easier for your staff.
You can also create data-driven policies for your internal HR professionals.
For instance, use previous data to review the effectiveness of different recruitment channels. Then, you can create an HR policy incorporating these channels, ensuring HR representatives follow the best practices.
Here are a couple more examples of how to create an evidence-based policy for HR professionals:
Ensure that all your healthcare workers are skilled and competent in delivering the best quality patient care by implementing policies for professional development.
For example, if you’re managing a team of in-home caregivers, you might create policies for training and development if client satisfaction drops to a certain level. This allows employees to improve their skills and provide patients a better at-home experience.
Identify reasons for turnover and create policies to mitigate these issues.
If the top reason for leaving is struggling to manage the work schedule, you might create a policy that protects work-life balance. For example, ensuring staff have enough hours between shifts to allow for real downtime. There are laws around this, but you might create your own policies to give employees even more time between shifts.
5. Review HR data regularly
You should also stay informed about emerging trends in HR analytics and data-driven HR practices. It’ll help you incorporate best practices, methodologies and new technologies into your HR operations.
Keep up to date with resources highlighting the newest technologies, like Gartner or SAP, to ensure you don’t miss any vital industry updates.
Use a data-driven HR strategy to streamline people management
For more information on data-driven practices and developments in HR technology, get in touch with one of our industry experts.
