Why HR Reporting Lacks Value

May 24, 2017

Why HR Reporting Lacks Value

Here’s the sad truth:

  • The demand for HR reporting is insatiable.
  • Accurate HR reporting is vastly harder than managers think it is.
  • Most HR reports add little or no value.

Let me underline that last point of “little or no value.” A manager at one of my workshops shared a story: An employee doing HR reporting introduced an extra zero to one of the numbers—changing headcount from 1,000 to 10,000 people. It was a year before anyone asked where those extra 9,000 people came from. Why? No one was reading the reports because there was no value added.

If you want a data savvy HR function, you need to come to grips with this reality. Your HR reporting is sucking up all your resources as you attempt to produce accurate regular reports and respond to ad hoc requests for data. This work is probably not generating a good return on investment. Making slow progress every year is never going to be enough. We need a more radical approach.

HR reporting isn’t about reporting, it’s about business decisions.

Identifying the Root Problem

What do people typically think the problem is? The usual suspects are operational problems:

  • Old technology
  • Dirty data
  • Inconsistent standards

Yes, those three operational problems are real enough, and it makes sense to work on them. However, you can invest a million dollars in technology, data cleanup, and standards-setting and still end up in a situation where people request reports and don’t use them. The fact that there are real operational problems disguises the deeper issue.

If you ask HR to dig past the operational problems, they’ll suggest that even when they are able to produce good reports in a reasonably efficient manner there are communication problems because:

  • People don’t know how to draw insights from the data.
  • People can’t tell a story with the data.

Again, good points, and sure it’s smart to work on those two communication problems. But neither of those are the deepest issue. They’re hard to teach and hard to implement until you’ve addressed the root problem, which is that the managers are not analytics savvy. They are requesting reports without being clear about how the data is going to drive action. They ask for information that seems interesting or might be useful or because they want to show off some data in a presentation. And if there’s no real value added, there’s no skin off their nose. After all, someone else is doing the grunt work.

The most impressive organizations are the ones addressing all three problems: the root problem of analytics savvy, the operational problems, and the communication problems. But the root problem has to take priority.

How to Solve the Root Problem

The first step is to shift the mandate of the HR reporting team from a service function (“We print reports when you ask”) to a decision support function (“We help you answer business questions”). In effect, we need them to be analytics savvy so that they can support managers who aren’t quite there yet.

A well-run decision support function says “no” a lot. But it says no for a good reason; it says no when the request for data isn’t going to help solve a business issue. Furthermore, it not just a flat no, the conversation moves on to helping the manager understand what data really would help them with their problem.

This shift requires some retraining of the reporting team; some changes to the process of how requests for data are managed; and changing the expectations of the managers requesting data. None of these things is hard to get rolling; it will take time for the shift to take hold, but it will mature on its own once you get the reporting team pointed in the right direction.

Secondly you need to teach the managers requesting data how to use data to make decisions. This “data savvy” or “analytics savvy” is a bit different from the usual notion of deriving insights or telling a story. It’s really about understanding how to use data to inform business judgement.

Again, getting people started on this path isn’t all that hard. To be a bit more accurate, some of your people will get on the path very quickly with just a little help. Others may be laggards but that doesn’t matter. The early adopters will pave the way and generate success stories. Once you have those small wins documented, others will follow. It’s a matter of getting people pointed in the right direction and giving them the fundamentals they need to get started.

A Winning Strategy

Dave Ulrich nailed it when he said, “HR is not about HR, it’s about the business.” Similarly, HR reporting isn’t about reporting, it’s about business decisions. Incremental improvements to reporting, even very expensive incremental investments, won’t help if the focus is on producing reports. Shift the focus to decision support and you’ll be on to a winning strategy.

The Authors: 

David Creelman, M.B.A., is CEO of Creelman Research. He helps HR leaders to identify, understand and address important new issues in human capital management. These days he is spending most of his time helping companies with Agile Analytics where the focus is on quick wins.

His most recent book, Lead the Work: Navigating a World Beyond Employment (coauthored with John Boudreau and Ravin Jesuthasan) is on the future of work and has received plaudits from business leaders at IBM, LinkedIn, and Starbucks. David can be reached on LinkedIn or by email at dcreelman@creelmanresearch.com.