The opinions expressed by Entrepreneur contributors are their own.
Have you ever waited longer than expected for your package to arrive? Have you ever experienced the proverbial “last mile” problem? The package flies all the way across the country, but somehow ends up stranded at a post office a few blocks from your home. Even though it's so close, it still hasn't arrived.
To borrow a term from the logistics industry, human resources departments have an equally frustrating “last mile” problem. Businesses are generating more talent data than ever before – insights into everything from how employees best work to how to increase retention – but that information is available to managers when they need it most. It has not fallen into the hands of
For example, a manager needs to know how much of a raise to give to a valued employee. The clock is ticking. HR departments have the relevant data, but it often takes weeks to compile industry averages and cross-reference employee details. In a fast-paced business environment with little competition for top talent, companies cannot afford such delays, which can ultimately impact their bottom line.
Related: A practical guide to increasing your startup's success through data analytics
This delay reflects widespread delays in getting people's data into the right hands. A recent global study found that approximately 3 out of 4 companies are leveraging data to drive business innovation. However, fewer than half are building data-driven organizations that are key to unlocking insights about their most valuable resource: their people.
As the co-founder of a business that helps companies leverage people's data to drive results, I know there's a better way. Here we explain why the last mile problem exists and how companies can solve it to ensure timely delivery of impactful HR data.
What's behind HR's last mile problem?
The fundamental reason why HR data doesn't make it to the last mile is that data is left in silos.
Essentially, there is a wall between HR and the rest of the company. Many HR departments store HR data because it is personal and confidential. In large companies, this silo problem also occurs within HR. Recruiting, talent management, compliance, learning and development, compensation, etc. all have their own areas of data.
Even worse, that data may not mean much to anyone other than HR professionals. Even when shared, they often lack context and are difficult to interpret. One reason for this is that our industry is full of HR terminology and is not framed by the language used in other industries. Want to know about usage analysis, duvets, negligence inquiries, and more? You're not alone.
Even well-known concepts such as turnover can be confusing and misleading without context. Your human resources department might report that your department has a 10% turnover rate. It sounds terrible, but is it really? How does it compare to your competitors? Is it impacting your bottom line and performance? Fundamental issue: Data speaks the language of HR, not business. will be shared.
Companies that lack the ability to connect HR data to the business risk falling behind. Over a three-year period, companies that highly leveraged people analytics reported average profits that were more than 80% higher than those that were less data-savvy.
How to solve HR last mile problems
Overcoming HR’s last-mile hurdles requires both cultural and technological transformation.
Culturally, HR leaders need education centered around the idea that using people analytics does not mean sharing personal information, far from it. In fact, the data in question can be easily aggregated and anonymized so that no sensitive information is exposed.
It's also important to drive home the message that HR's contribution can and should go far beyond compliance and management. After all, human resources are a company's biggest item and biggest resource. Human resources departments are ideally placed to help connect the dots between people and outcomes.
Technology can also help, especially when it comes to getting the right insights from the right people. Believe it or not, many companies still rely on old-fashioned graphs and spreadsheets to manage HR data. I've seen what a challenge this poses to managers in the field, many of whom don't have the time, training, or inclination to sit down and crunch the numbers.
The good news is that new generative AI technologies are finally helping to unlock that data. Modern tools allow administrators to ask questions in plain English and quickly find the answers they need. Are employees being paid a fair wage? Rather than poring over dense graphs or waiting for data analysts to give their opinions, managers should look at data and industry data specific to the company and its employees. Use benchmarks to get answers in real time.
Finally, the best companies are finding ways to integrate people data into the rhythms and routines of their daily company culture. Share your insights with decision-makers on a consistent basis, such as weekly or monthly, rather than sending them in bulk every quarter. They are selective, creating reports tailored to the department in question and business needs, and contextualizing data by telling the story behind the data in the language of the business. If sales are up 10% this year, what does that number mean for your company and how does it compare to your competitors?
Related: Using data analytics will transform your business. Here's how:
Rewards for completing the last mile
When people's data gets where it needs to go faster, the entire organization benefits.
HR professionals can now focus on the “art” of their profession, rather than the mechanical and time-consuming information requests that can easily be handled by analytical tools. That means less time spent on administration, compliance, and tickets, and more time for the people driving your business.
Managers have the information they need, when they need it. For example, you can use HR analytics to find out who is most likely to leave your company before they actually do. It's no longer a guessing game thanks to today's generative AI tools that many executives believe will improve revenue. Ask questions and get honest answers about individual employee engagement levels based on data from chat, email, calendar, and other workplace apps.
For businesses as a whole, solving last-mile HR problems can mean a huge difference in efficiency and performance. Talent decisions can be made in real time, rather than being delayed by months (or even years). Best guesses and intuition are replaced by data-backed insights. Ultimately, you can draw a straight line from talent to performance, increasing customer satisfaction, employee retention, and revenue.
Admittedly, we're not there yet. From HR departments' warehouse mentality towards data to front-line managers' aversion to being analyzed and judged, systemic biases persist.
Wariness about AI is another potential deterrent, especially in the context of privacy and misinformation, where appropriate guardrails are essential. (For example, my company conducts ethics tests on our generative AI tools to ensure that their guidance is free of racial or other bias.)
But ultimately, solving HR's last mile problem is well within reach. The data is there. We have the tools to share it safely and responsibly. Now is the time to get it into the hands of the leaders who need it most.