8 Questions to Ask for Effective HR Reports
HR departments and companies invest billions to develop and upgrade their databases without spending enough time to design relevant and effective HR reports. That’s why staff members complain and protest about inaccurate assessments, data-driven errors and unpopular decisions – HR reporting fails to deliver unless the HR reports dig down into the databases to get the most accurate and relevant performance information, employee profile data and business intelligence.
Data-driven decision management, or DDDM, is an approach that uses verifiable data to assist in decision-making processes. In today’s competitive and data-rich marketing environment, data have become the gold standard of business decisions and HR reporting and management. Mining data once took an IT specialist, but most company stakeholders now have access to custom HR reports based on verifiable data from many databases and resources. Managers can often customise their reports on the fly, view information in real-time on custom dashboards and work with innovative analytics tools that generate predictive modelling. Data-based decisions generate 6 percent higher profits than decisions made without data input according to an MIT study.
Understanding What You Need from Data
HR departments lead the way in defining a company’s culture, and HR reports can simplify the process by providing spot-on decision-making data. However, the classic GIGO – garbage in, garbage out – restrictions apply. If the data aren’t relevant or get taken out of context, then decisions based on this faulty information can foster resentments, damage employee morale and lead to disconnected work performances. The following eight steps help to eliminate these risks by creating relevant, actionable and accurate reports:
What is the message?
It’s quite common for HR departments to accept and use only the generic reports that their software applications deliver instead of crafting customised HR reporting based on each department’s needs. Databases are often chosen based on capabilities instead of whether the information does what’s needed. It’s critical to evaluate staff strengths and weaknesses, training, education and the company’s current and long-term needs to determine which information and benchmarks are critical for defining progress or indicating that remediation is needed.
Do we agree on definitions?
HR reports can deliver valuable information, but they only work if everyone is interpreting the information in the same way. It’s critical that all departments agree on their definitions of success, failure, above-average performances and other issues. Otherwise, it’s easy to start comparing apples and oranges and concluding that oranges make poor pies and that apples are hard to squeeze for a glass of juice.
What format communicates the message best?
The ability to generate custom HR reports is critical because the benchmarking process varies widely among departments and company stakeholders. The ideal operating software allows managers to create various reports based on standard templates, custom needs and organisational imperatives. Report options might include:
- Different types of documents
- Reports based on credential terms
- Location-based reports
- Reports with expiration dates
- Custom employee reports based on various criteria including work- and nonwork-related intelligence
- Verification reports crafted for specific stakeholders
- Directory overviews
- Education and training reports
Each of these reports might require specific formats, so it’s critical to ensure that these guidelines are met.
Who will use the reports?
HR reports can be customised for various company stakeholders, and it’s critical to determine where each report will be used and by whom it will be read. Common types of reports include:
- Administrative HR reporting
- Workers’ comp audits
- Payroll reports
- EEO reports
- Termination reports
- New hires
- Employee status changes
- Turnover analyses
- Budgetary reports
- Performance reports
- Business intelligence
- Workforce data and trends
- Geographic staff distribution
- Performance parameter results
- Disciplinary information
- Age and diversity data
- Leave administration
Some reports might contain confidential information that can’t be viewed by unauthorized staff while others contain general and statistical information that can be viewed by all staff members.
What data is required, and how accurate is it?
Determining which data are essential in each report is critical. Other information can be included for comparison purposes, but the essential data must be easy to find. Reliability and data integrity are also important issues. For example, BI insights about a competitor might favour the company’s successes while glossing over its failures. In many instances, the absolute integrity of the data can’t always be determined, so reliability information should be included in the report when applicable.
How do we deliver this in context?
Big Data only works effectively when it’s paired with context. For example, the number of employees that left the company in the past year isn’t very descriptive unless it’s compared against the total workforce size, economic data, departmental breakdowns and other contextual information. There’s always some uncertainty in any statistical analysis, so context plays a vital role in interpreting any information. Rankings and absolutes can be misleading when managing human resources. For example, the highest paid salespeople might generate the least revenue for the company while lower paid workers generate more profit.
What is the report frequency?
Some reports might need to be run daily while others are more effective when run weekly, monthly or quarterly. Determining the frequency of automatic reports is crucial for spotting key trends, but authorized report recipients should be able to generate reports in real-time that cover various time periods. If a company’s HR software doesn’t update reports automatically, then this step must be done manually. This situation commonly occurs with third-party databases that aren’t fully integrated into a company’s operating system.
Data is good but, how do we drive real-world conversations and actions?
Reports are tools, but data should never be used exclusively when assessing performance, potential and other subjective employee characteristics. It’s important to use these reports to foster daily conversations. Managers should discuss the data with individuals and teams to facilitate development and growth.
Critical Metrics for HR Reports
The most critical HR metrics can vary by industry, company and geographic location, but the most common include:
- Headcount of staff by department, jurisdiction, company and other categories
- Full-time equivalent, or FTE, information
- Vacancies, anticipated growth and staffing needs for new company initiatives
- Employee movement, which can upward, downward or lateral and includes succession planning
- Turnover rate, which is often a critical metric, and needs to be broken down by department, cost of training replacements and other criteria
- Diversity, which has become an increasingly important metric in recruiting millennials and proving company fairness
- Engagement levels of employees, which can inspire loyalty and create greater job satisfaction
- Flight risk, which is an important assessment when recruiting and hiring
- Learning progress, which includes company-based training, outside certifications, cross-training and education
- Performance assessments, which incorporate performance, potential, progress and value to the company
Challenges to Effective HR Reporting
HR managers can become better coaches by developing employee resources, which improves their performance levels by 25 percent. Much of this success depends on HR reports, so it’s critical to create more effective assessments. The challenges of HR reporting include evaluating and implementing new technologies at faster rates, relocating workforces while accurately reporting relevant data and streamlining operations with leaner HR staffs. Other HR reporting challenges include:
- Managing developments in technology carefully so that reports accurately describe what’s truly relevant and what’s subject to interpretation
- Incorporating demographic changes in the workforce that create cultural gaps
- Facing concerns about economic factors and political unrest due to globalisation
- Ensuring that data-driven processes also incorporate the ‘human’ factor in decision-making
- Identifying the needs and benchmarks of different generations of workers
- Developing reports that factor-in the outside interests and holistic profiles of workers
- Benchmarking database information against data from third-party resources
- Crafting HR reports to include data on culture, retention and engagement
- Providing fair but accurate performance management assessments
Managers needs HR reporting that guides their decisions about human resources instead of objective statistics that make decisions for them. Better metrics and analytics are tools that wise managers use in context with personal information, progress reports, estimates of employee potential and other subjective insights.
Building a Data-Driven Culture
Building a data-driven culture can make HR more inclusive and holistic, but 48 percent of the respondents in one study weren’t confident about how to create an appealing organisational culture. Organisations face increased scrutiny over their HR reports and executive decisions because each issue can be posted and analysed online. Data can drive greater transparency, higher engagement levels and better holistic insights, but managerial leadership is the key to creating and interpreting HR reports to create a fair and responsive data-driven company culture.