Why data is HR's most important asset


May 9, 2022

Just as business data is essential for building, marketing, and selling new products, employee data is also vital in developing and maintaining an impactful workforce. Business data, and platforms like Salesforce that digest it, have long proven their value. However, only recently has employee data been considered of equal worth, and has there been technology to use it in a meaningful and integrated way.

Employee data unites companies 

Employee data is a linchpin that can be used to connect and bind together all the different point SaaS systems in use at a company.

Think of the data that systems like payroll, benefits, and time & attendance generate. Such data can be coupled with the data generated from systems not traditionally associated with HR, like customer service, device management, security, and more. Once a company integrates its HR and IT systems, it can begin to automate workflows across those systems, run reports on combined data sets, and more. 

As Parker Conrad, Rippling’s CEO, notes, “For database nerds, we think employee data is the secret ingredient required to create a single, unified schema across all business software. Because almost all business systems have a dimension table for an employee in their own schemas, you can use employee data as a join condition to bind all these systems together.”

Data is at the heart of HR’s profound transformation

In its report, The new possible: How HR can help build the organization of the future, McKinsey & Company notes that in a post-pandemic era, “a management system based on old rules—a hierarchy that solves for uniformity, bureaucracy, and control—will no longer be effective. Taking its place should be a model that is more flexible and responsive, built around four interrelated trends: more connection, unprecedented automation, lower transaction costs, and demographic shifts.”

This observation underscores two decades of profound transformation in HR. What was once primarily a tactical unit charged with onboarding/offboarding, intrapersonal employee management, and related tasks is now a profoundly strategic component of the overall business. 

In its significant Global Human Capital Trends report, Deloitte says, “The HR function is taking on a new role as the steward and designer of these new people processes…This means that HR is redesigning almost everything it does—from recruiting to performance management to onboarding to rewards systems.” 

The McKinsey report similarly notes, “HR should manage talent rigorously by building an analytics capability to mine data to hire, develop, and retain the best employees.” And “To engage business leaders in a regular review of talent, they [HR leaders] can develop semi-automated data dashboards that track the most important metrics for critical roles.”

Such dashboards were traditionally available only to companies with the resources to build their own. But, with Rippling, they’re standard. And just the tip of a customizable and unified workforce platform. 

You can’t manage what you don’t measure 

So notes the Wharton School at the University of Pennsylvania in its HR Management and Analytics course. The course also highlights three surprising statistics:

  • Only 5 percent of big-data investments go to HR, the group that normally manages HR analytics
  • Only 9 percent of companies believe they have a good understanding of which talent dimensions drive performance in their organization
  • Only 11 percent of companies have rewards systems that are highly aligned with their organizational goals, and 23 percent do not know what rewards their workers value.

What can we infer from these numbers? Businesses understand that HR data is valuable, but gathering such data, and extracting value from it, remains challenging. The ability to passively source data and automate analyses will help HR teams positively impact the trajectory of the business and its employees. 

A quantitative approach that uses data and established analytical techniques can help businesses develop effective and fair processes that eliminate bias and help bolster the entire workforce.

People analytics in practice 

Google’s Project Oxygen is one of the first and best examples of HR data being used to redefine company-wide managerial practices. Kicked off in 2008, the project “defined manager quality based on two quantitative measures: manager performance ratings and manager feedback from Google’s annual employee survey. This data quickly revealed that managers did matter: teams with great managers were happier and more productive.”

The project is a prime illustration of the power of people analytics. Broadly defined, people analytics uses “analytical techniques, ranging from reporting and metrics to predictive analytics to experimental research” to “uncover new insights, solve people problems and direct your HR actions.” 

Traditionally, HR would address challenges through primarily qualitative debate “based on emotions, instincts, and anecdotes.” However, a quantitative approach that uses data and established analytical techniques can help businesses develop effective and fair processes that eliminate bias and help bolster the entire workforce. 

Rippling is data-driven HR 

Rippling Unity enables companies to connect every system that touches an employee into one source of truth. That means more data, about more things, delivered in a digestible, insightful way. It helps HR teams use quantitative metrics to bring out the best in employees organization-wide. 

With such integration also comes the ability to automate nearly any workflow. Whether they be HR alerts that trigger when pay disparity is detected, to IT alerts that notify employees when there are security lapses, as well as finance and engineering workflows of any type—there are hundreds of workflows and reports preset and ready to go. 

For HR teams, such automation means an end to the mountains of administrative work that get in the way of the human side of the business. At its core, the automation within Rippling is highly configurable, meaning the platform can grow and flex with the needs of an HR team. New business directive? Anticipating a surge in hiring? Need to issue a company-wide policy change? Rippling’s got your future covered.

last edited: March 26, 2024

The Author

The Rippling Team

Global HR, IT, and Finance know-how directly from the Rippling team.