Data Literacy: An Essential Skill for HR Professionals


Digital transformation of businesses is directly causing the generation of extensive amounts of data for decision-making and execution. If you need to stay relevant as time goes by and stay current in business, you will need to be data literate. So what exactly does it mean to be data literate in HR? Let us dive into that this week.


What is Data Literacy in HR?

Literacy is the ability to read, write and comprehend a language. Similarly, data literacy is the ability or skill to understand, interpret and apply data. People with such skills have the aptitude to critically analyse and deduce the relevant information from the data. The data a company possesses is its most important asset. The data can be representative of any given information. For an HR professional, the relevant information that is of use is the data on the organization’s employees. HR professionals must be able to collect insights from any source possible to retrieve meaningful information for strategic decisions and actions that add value to the business. This process is called ‘being data-driven.’


Let us look at an example. BBVA is an American banking franchise that deals in commercial banking, retail banking, and wealth management. When they compared their employee turnover against other banks of the same scale, they learned that they had an above-average turnover in certain key roles. First, they looked at the turnovers by region, branch and demography and found that 10% of all their branches were responsible for 41% of all turnover in a key revenue-producing role.  Having identified the branches, they were able to target their rectification measures at the problematic branches. Second, they took a survey from existing and former employees that revealed concerns in compensation structures, onboarding and new hire and manager training. Empowered by this data, they were able to implement branch-level action plans addressing those specific issues; BBVA was able to reduce their turnover for that all-important position by 44%. This directly resulted in the decrease of recruitment costs and improved retention of customers.


In short, data literacy is a crucial part of the new standard for HR professionals. Digital literacy, together with business acumen, people advocacy, and digital proficiency, are the four HR core competencies that are essential now and for the future. Having these four competencies combined with at least one functional HR competency makes a T-shaped HR professional.


Not only being a T-shaped HR professional helps you stay relevant in the field, but it also helps your organization achieve business objectives and drive business value.


Why is data literacy important for HR professionals and businesses?

Digital processes create zillions of data that needs special skills to read and comprehend its meaning and utility. HR professionals must be educated to look at this data, filter out the irrelevant information, and make decisions based on what is left. HR pros who can read, apply, create, and communicate data can leverage it better to reap the following advantages:


·       Make evidence-based decisions that are supported by research and verification.

·       Achieve operational efficiency through identifying underlying causes of problems.

·       Create business impact through HR processes and outcomes. 

·       Increase productivity and profit while staying competitive

·       Find new opportunities to improve day-to-day practices