So far in this blog series (part 1 and 2) we have seen how limited access to HR data breaks down critical communication and leadership among business leaders. Now it’s time to look inward and examine how HR data silos hurt HR itself – specifically in its ability to plan proactively.
Only 33% of workforce planning leaders rate their organizations as effective at using data in workforce planning (Gartner, 2020). Data silos are one of the most prominent culprits. Integrated data is a critical piece in the puzzle that is workforce planning and so when HR is left to navigate disparate data sources, workforce planning becomes increasingly unreliable and misaligned.
Seeing, or Missing, the Bigger Picture in HR
Successful workforce planning aims to ensure that an organization has the right people, with the right skills, in the right roles, at the right time in order to achieve its strategic objectives. This comprehensive approach to planning brings together the different functional areas within HR and aligns them with broader business objectives. It is all about building a resilient, efficient and strategically aligned workforce.
SHRM outlines three key parts of workforce planning:
Assessing the current state, including your capabilities, resources and needs.
Defining the desired future state, including your vision, business objectives and required competencies for that future.
Determining the transition, including the strategies, investments, and changes needed to bridge the current and desired state.
Research from Deloitte found that only 11% of organizations demonstrate strategic maturity in their workforce planning approach – this is a problem! As the work environment continues to become more complex with the rise of hybrid work, the evolution of employee expectations and the integration of AI, there are more factors to consider when navigating the transition from the current to the future state of work (i.e., step 3).
Why Is HR Missing the Big Picture, and What’s at Stake?
It is clear that the need for workforce planning is on the rise, yet obstacles, namely data silos, persist and are driving up costs. A recent survey found that while 92% of HR professionals said workforce planning is important, only 42% reported that their organizations are effective at it (SHRM, 2024).
Data silos are challenging HR’s ability to create a cohesive, unified view of the workforce which enables them to successfully plan in alignment with business needs. This ultimately leads to misaligned strategies, inefficient resource allocation and missed opportunities for growth. In fact, less than half of HR leaders consider their organizations to be effective at analyzing internal and external labor markets (Gartner, 2020). By missing the big picture, HR’s plans gradually break down – becoming disconnected, then incomplete, and ultimately nonadaptive.
Disconnected plans: Workforce planning depends on integrated data systems across departments. Without this broader view HR is resigned to incomplete data and intuition which ultimately result in disconnected workforce plans. For example, siloed recruitment data can result in separate teams unknowingly competing for the same type of talent leading to potential over-staffing in certain areas while leaving others under-resourced.
Incomplete plans: Workforce plans can quickly break down from disconnected to incomplete. To continue with the example of recruitment, HR may overlook internal candidates for open roles because their skills and experience aren’t visible across disparate systems leading to unnecessary spends on external hiring. Only 10% of job opportunities are filled through internal lateral hires, indicating that many organizations underutilize their existing talent pools (MIT Sloan Management Review, 2022).
Unadaptive plans: These disconnected and incomplete plans can become detrimental as they lack the agility to adapt effectively if, and more likely when, circumstances change. Silos restrict HR’s ability to plan out all potential scenarios so, when change comes, plans can quickly shift from incomplete to inflexible. Organizations may therefore only respond to workforce challenges after they occur rather than anticipating them beforehand.
How HR Can Lead the Way in Fixing Data Silos
HR, as the ‘owner’ of much workforce data, is poised to help the organization shift toward a more unified system of data. The best approach is to build standard practices centered around governance and management within the HR department and beyond. If executed effectively, HR can ensure that workforce data remains reliable and accessible, driving better planning and alignment with organizational goals.
Standardize Data Management Practices: HR must help build consistent data collection and management practices. This can start with creating unified metrics, terminology and definitions before moving toward the standardization of data collection and storing processes. Documentation should be kept clear to ensure adherence of teams across the board as well as up-to-date knowledge as practices change.
Promote Data Governance Policies: The first step in establishing clear data governance policies is assigning data ownership. It is important to appoint a dedicated HR Data Manager or team responsible for maintaining data integrity and managing system integrations. Having a dedicated team will help to ensure that not just one or two but all HR systems adhere to consistent practices.
Centralize Reporting and Analytics: Centralized reporting tools allow HR to aggregate data from different systems into one accessible platform. HR should evaluate their HR tech stack and consider investing in a people analytics solution like PARiTA, a workforce intelligence solution that integrates all of your HR data into one place. These tools create a single source of truth for workforce insights which helps to build a strong foundation for workforce planning.
While the journey toward consistent data management and governance is long, HR can start leading the process today. By championing data governance standards and promoting the use of reliable, accessible information, HR will be able to build a data-driven culture across the organization. Over time, breaking down these data silos will not only improve efficiency but empower HR to thrive in a rapidly changing environment.
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