405.627.6326 matt@whyhr.guru

Data-driven HR decisions can save businesses from spinning their wheels and misspending money. Sometimes, rather than looking at data from a strategic angle, businesses hire staff in crisis-mode and base their pay structure either on what they’ve always had or what they think they can afford.

In reality, there is data available that shows how much money an employee costs in salary and benefits, how much it costs to retain the employee, how much revenue they create, and how much harm they might be doing to a business. Analyzing these different pieces of data can help you form a strategy for utilizing your resources that is advantageous both immediately and for future growth. WhyHR is here to help you do that.

Data analysis begins with thinking about where employees fall on a graph that charts both the performance of an employee and how well they fit with the culture of your company. These measures will indicate what you need to do to make your business even better.

High performance and high culture fit

The first type of employee to consider from a data perspective is one who is both high performing and has a high culture fit. These are the individuals your business relies upon. The goal for these employees is retention, and that’s where retention data can help.

Too many owners fall into the trap of thinking there is nothing more they can do to retain an employee, because they believe they can’t pay a person any more than current wages. Oftentimes, this is a false notion. If you are letting employees leave because you feel you don’t have the budget to pay more, consider that there is a cost to employee turnover.

The process of hiring and training new employees has a price tag that you can compare to the cost of retaining the current, valuable, high-performing, and high-culture-fit employee. It is a good idea to regularly communicate with these employees and see what they are seeking from you as their employer. If there is a need they have or a benefit they’d like, see if that will cost less than what it would cost to replace the worker.

Low performance and high culture fit

For employees who are low performers but a high culture fit, you need to analyze data regarding the cost of training and growing them into high-performing employees. It’s natural to want to keep this type of employee around because they fit into the culture of the company.

However, this type of thinking is not strategic for the company. The key points to analyze are what it would cost to replace them and what it would cost to train them. It’s easy to think that you don’t have money for training, but by not training your employees and growing them into high performers, you often pay for it many times over when you eventually let that employee go and hire someone else.

Looking at the data can help clarify whether it is worth the cost of investing in an employee or letting that employee move on. This requires probing the deficiencies in their work and what it will take to correct those deficiencies, or perhaps even considering if there’s another position in your company that might be a better fit for their existing skills.

High performance and low culture fit

Workers who are high performing but a low culture fit are an interesting group that needs data-driven analysis. This type of worker brings in revenue, and you may feel they are irreplaceable in your company. However, they often run over others and are not team players. They have lots of leverage because they are driving revenue, and you may feel like you have to keep them on the team because of their revenue production.

Thankfully, there is data that informs decisions surrounding these employees as well. Here, you have to look at the collateral damage they are doing to your company against your return on investment—how much are they bringing in versus how much are they costing you. Looking at the employee from this standpoint draws a clear line of when it is time to let that employee go. Remember that they are bringing money in currently but may not be doing much for the future of your company.

Making solid, data-driven HR decisions about each type of worker can have an impact on other staff as well. For instance, if you can move a low performance but high culture worker into a high-performance, high-culture employee, you are less dependent on those who bring in revenue but aren’t team players. Being strategic about these decisions helps protect your company and improve overall employee retention.

If you need help making data-driven HR decisions, WhyHR can lead you through the process of analyzing your current team and helping you analyze the data available. Contact us today for more information.

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