Businesses are unlikely to perform well over the long term unless executive decisions are informed by an in-depth understanding of “the value of their people, as well as the potential risks associated with their workforce”, according to HR firm the Chartered Institute of Personnel and Development.
Workforce data and how it is collected, analysed and reported on to the most senior level of the business is a critical part of this, states its Effective workforce reporting: Improving people data for business leaders report.
The report explains that because of the rise in external reporting requirements around people matters, it is “more important than ever to understand how organisations value and use people data to influence investment decisions and identify areas for improvement”.
It adds that the importance of non-financial metrics to businesses has “increased in recent years and looks set to grow further in future”. Recruitment, retention and pay are “current priority people issues for business leaders, potentially crowding out other areas due to the external climate”.
The report also suggests that employee engagement surveys are the most common way of gathering employee voices, with other mechanisms like advisory boards less commonly used.
People issues are most commonly discussed at the main board level, although only 12% of boards discuss people matters at every meeting, states the research.
A “significant gap” exists between data that is collected and data that is reviewed, leading to concern from HR leaders that too much information is collected without a clear aim or outcome, and that it is not being used for business decision-making.
Leaders’ dissatisfaction with the people data they receive is linked to a lack of context and data being too narrow, meaning they’re not receiving a holistic picture of the impact the people information is having on business outcomes, concludes the study.