I have met many who question if HR analytics, HR data and HR reporting should be located in the HR department. People with this view generally have one of three arguments. The first group is some vendors. They say that whenever they try to sell their software/solution to a company, the HR department don’t really ‘get it’. They see a piece of software and refer to the IT department. In the mind of this first group, HR analytics should be part of IT because they understand how software can support the business and the need for and challenges with integrating software across a business.
The second group is concerned with the mindset of HR. They also don’t believe that HR ‘get it’ but they are concerned with it from a strategic point of view. They see HR as being primarily operationally driven and they believe that HR data and HR analytics require a strategic mindset. They either hope that HR become more strategic or hope that HR data will be located anywhere but in HR.
Finally, some believe that it is better to have a central data department, where all analytics should take place. The argument is that by centralizing and getting the best brains in the same room, better analytics will be the result. They don’t really have a view on HR, HR analytics should just not be part of it. They also see many advantages from having a central department other than optimizing brain capacity.
I freely admit that my own view is that HR analytics should definitely be part of HR. I simply don’t buy any of the above arguments. Not only that, I believe that by having HR analytics as a central part of HR, it will make HR more potent, more strategic and more business orientated. So HR must take control of HR data.
The first step to do this is to take ownership of the Master Data. Sounds simple – and actually is a bit common sense – but many times HR master data is not owned by HR and this is a major problem.
Master data is essentially basic data about employees which can be used in single applications, systems and processes. Examples include name (first and last name), position, reference (who is your boss), social security number, dob, address, telephone numbers (internal and external) etc. Master data supports other reporting processes and for example HR analysis is greatly dependent on an organization’s master data.
The problem is, that master data about employees are in many cases not located in HR. They may be in payrolls (which may or may not be a part of HR, but is often a silo-function within HR or finance) or in IT. So basic statistic about turnover, absenteeism, performance rating, competence map etc. can only be liked to people and positions if you control the master data. These HR departments who don’t control these data have to go and ask for this data in order to run their reports. But by not having the actual ownership you cannot control the quality – and bad data results.
To build great HR analytics, you must have great HR master data and to have great master data you must have ownership of them. So HR: It is time to take ownership of your master data.