With the HR function playing a more strategic role than ever in many organisations, the ability to make evidence-based decisions has quickly become a critical skill for practitioners.

As HR leaders know well, in an era defined by rapid change and disruption, the stakes are too high to rely on gut instinct alone. By grounding strategies in evidence, HR practitioners can offer clarity amid uncertainty and ensure their efforts are aligned with the broader business goals.

In recognition of this, recent years have seen the concept of ‘evidence-based HR’ (or EBHR) grow in popularity. Evidence-based HR is an approach that emphasises the use of data, research and empirical evidence to make decisions about HR practices and strategies.

The term has become increasingly recognised in the HR community, with many employers placing more focus on data-driven decision-making. The rise of AI and more sophisticated analytics tools has also made it easier to collect and analyse large amounts of HR-related data to inform an evidence-based HR practice. 

According to Tanya Hammond FCPHR, Founder and Chief Collaborator at Tailored HR Solutions, while the increase in awareness of evidence-based HR is a welcome development, there is still some progress to be made in terms of how HR harnesses the right evidence in the right way.

“What we’re observing is that evidence still means ‘what we can get out of an HR system’,” she says. “But I think the world has evolved beyond saying that people analytics is something that’s purely systems-based – it’s way bigger than that.

“It’s about unlocking the data in the HR system, and being comfortable asking questions and considering the data against a variety of factors to draw out meaningful insights,” says Hammond, who will be speaking about reconfiguring a healthy, resilient and high-performing organisation fit for now and tomorrow at AHRI’s National Convention in August.

What does evidence-based HR look like?

One of the most important principles of evidence-based HR is to incorporate a variety of sources and forms of evidence into decision-making. Relying too heavily on one system or process as a single source of truth can prevent HR from noticing subtleties behind workforce trends.

“This will include unlocking relevant information from HR information systems, but also branching out further to leverage other sources of evidence, such as external expertise and research findings,” says Hammond.

In a report published last year, the Corporate Research Forum broke down the sources of evidence typically drawn on by a well-rounded, evidence-based HR practice into a four-part framework, as shown below:

Source: Rob Briner and CRF

As an example of evidence-based HR in action, picture a scenario where an organisation finds its employee engagement scores have declined significantly over the previous year. 

Using the principles of EBHR, HR gathers data through engagement surveys, focus groups and individual interviews to understand the main drivers behind this decline. 

They identify that employees feel a lack of recognition and growth opportunities. They then examine research on effective recognition programs and talent development initiatives and decide to pilot a new program focusing on employee recognition and career advancement. 

The program tracks engagement metrics before and after its implementation, showing an improvement in employee engagement and satisfaction. HR then scales the program company-wide and continues to monitor its effectiveness through regular engagement surveys.

“Drawing on a broad range of evidence allows HR to effectively define the problem and help identify important nuances behind organisational opportunities, issues and trends,” says Jaye Matheson, Chief Insights and Transformation Expert at Tailored HR Solutions.

“People analytics or evidence-based HR is a method to uncover the root cause of an issue, and by gaining varied perspectives, you’re going to get better insights and a more impactful solution. Sometimes you need to slow down to speed up,” says Matheson, who is also speaking at AHRI’s National Convention and Exhibition.

Getting started with evidence-based HR

One thing that can hold HR practitioners back from embracing the shift towards EBHR is the misbelief that they need to be experts in data and analytics. 

“In fact, many HR practitioners have the right capabilities, tools and resources to undertake EBHR, like problem-solving, a curious mind and strong business acumen – all foundational elements for effective HR decision-making,” says Matheson. 

“Often, people want HR or people data to be perfect before they do anything,” she says. “But you can’t let perfection get in the way of making a start and delivering something impactful. If you want to run a marathon, you’ve got to start running.”

The more evidence HR is able to leverage, the more likely they are to uncover places where data is being reported inaccurately or inconsistently, and support continuous improvements.

“Instead of saying, ‘My headcount doesn’t line up,’ ‘My turnover numbers are wrong,’ and letting the conversation end there, we should be using this information holistically to help answer a question,” she says.

“When faced with inaccurate data, people often decide to stop there,” says Hammond. 

“[Maybe] it’s wrong by two or three per cent because it’s live data, and it’s constantly changing. But even if it’s [slightly] wrong, a trend is a trend. And it’s not ‘wrong’ for the purpose in which we’re going to use it.”

“You can’t let perfection get in the way of making a start and delivering something impactful. If you want to run a marathon, you’ve got to start running.” – Jaye Matheson, Chief Insights and Transformation Expert at Tailored HR Solutions

Given the sheer volume of evidence considered in EBHR, both Hammond and Matheson advise HR to ensure they are dedicating enough time to assessing and acting on the information and insights.

“The tension is the desire to move quickly,” says Matheson. “There tends to be a bias to action. People tend to want to go forth and solve a problem. 

“But, if they want to make the right decisions and know with confidence that they’re investing in the right initiatives to achieve their desired outcomes, they need to take the time to exercise diligence to fully examine the information from various different perspectives.”

Risks and ethical considerations

As with all branches of data collection and analysis, employers need to be aware of the relevant legal safeguards and their ethical responsibilities to their people. 

“You need to understand the basic foundations of people analytics and the principles to make sure you’re thinking about data ethically,” says Matheson. 

“[With evidence-based HR], the world is your oyster. But just because you can [use some sorts of information], it doesn’t mean you should.”

She recalls an example of a large organisation which, in an effort to optimise its supply chains, gave its employees wearable devices to track their work tasks. In addition, they also captured how long employees spent taking breaks, which was then used to manage employee performance. 

This example demonstrates an instance where data can be collected to solve an intended problem (supply chain optimisation), but can also be used in a way that may contravene the original intent, leading to questions around the ethical use of data.

“Think about what information is going to have a positive impact on the business and a positive impact on the workforce,” she says. 

The recent proliferation of new AI technologies means that HR is now able to gather and assess information at greater speed and volume than ever before. However, these machines cannot yet replace humans’ ability to think critically about data and spot ethical nuances like this.

As a result, getting the most out of this technology will mean striking a balance between harnessing its processing abilities and maintaining a critical human eye.

Given their expertise in all things people, HR is in a prime position to manage this balance, says Hammond.

“Ultimately, it’s about how we source the greatest people, and how we ensure that people perform at their best,” she says.

“If we don’t use evidence-based HR in the work that we do, then we’re not providing the services that are truly required – we’re not being that trusted, critical, credible partner that our organisations need.”

Understand the principles of data-driven decision making and learn to apply a data-driven mindset to HR strategies and challenges with AHRI’s short course in People Analytics.

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Never underestimate the influence that HR has in a business, says Joanna Bell FCPHR, General Manager, People, Culture and Governance, Pharmaceutical Society of Australia.

“A proactive board will be asking you questions; a great HR leader will be able to anticipate the questions with a well informed paper and strategy,” she says.

Whether you’re reporting directly to a board or a sub-committee, the skills you’ll need to develop are the same – the ability to succinctly summarise key information (an underrated skill), tell a compelling story with data, and communicate with clarity and conviction.

What to include when writing a board report

The contents of a board paper will be specifically tailored to your business’s goals and needs, but there are some common metrics that Bell suggests benchmarking and reporting back on, such as:

• A review key HR policies (such as flexible working policies)
• Employment data, FTE, turnover rates and time/cost to hire
• Remuneration and performance data
• Governance and market disclosures
• Talent management and succession planning
• Diversity, equity and inclusion strategies and progress
• Work health and safety updates
• Engagement surveys and action plans

Some of these will be consistent, standing items on the agenda, others will only pertain to specific times of the year, says Michael Rosmarin FCPHR, Chair and National President of  AHRI and Chief People  & Group Services Officer at Link Group.

“For example, performance and remuneration discussions are likely to occur in alignment with the organisation’s review period, but other topics such as progress against your people strategy or retention risks will be more regular agenda items,” he says.

Bell suggests prioritising information – cherry pick the data the board will most care about. For example, she says the board is always concerned with attracting and retaining key talent.

“They want to know if we have the right capabilities to deliver on our strategic plan. What are the risks and mitigation actions around this? Show how your people and culture team can add value as an enabling function to deliver against this strategic plan.

“There’s so much available data you can get from an HR system, so highlight key takeaways for the board,” she says

She also suggests benchmarking your statistics against your own internal year-on-year or month-on-month metrics and, if possible, against other external organisations.

“Then you can better forecast what you need and understand the story your data is telling.”

How to present your information to the board

First and foremost, your people strategy has to reinforce the overall business strategy, so make sure your data is directly speaking to that goal.

Perhaps your company is in hyper-growth mode, for example, so you could emphasise the talent and skills that you’re helping to cultivate. Or maybe the company is undergoing a merger or acquisition, in which case you might focus on your change management processes.

“Your people strategy has to be clearly aligned to achieving the business goals and strategy ,” says Rosmarin.

He also suggests developing a dashboard that you can easily use to measure and track performance and identify trends.

“This might look like a simple traffic light system with some commentary that gives a good indication of the company’s health and how it’s performing.”

He also emphasises the importance of keeping the end goal in mind – is the paper for approval, information or discussion? Structure your action items and agenda around this.

“I suggest starting with your ‘for approval’ items, so they don’t get missed. Then you’d go into your ‘for discussion’ items. Anything that’s ‘for information’ might be assumed to be read and only explored in the meeting if there is a specific question, because you want the meeting to focus on discussing the important issues.”

“Remember, what you highlight will be questioned, so make sure your data is accurate, anticipate and be prepared with answers.” – Joanna Bell FCPHR, General Manager, People, Culture and Governance, Pharmaceutical Society of Australia

“I always tell people who are providing papers to a board that directors will read all the information you provide and to therefore be thoughtful and only include information that is relevant and important. Try to keep each paper to one or two pages, and make sure it is clear and easy to understand what you’re saying.”

It’s also important to be explicit on what you’re recommending versus what you’re asking for input on, he adds.

When it comes to presenting information, Bell follows the three C’s method: keep it concise, clear and captivating (i.e. ensure it’s visually appealing).

“It should grab the attention of the reader and compel them to dive deeper into the sections of your report. Tell them what they need to know at a high level. And remember, what you highlight will be questioned, so make sure your data is accurate, anticipate and be prepared with answers.“

To keep things concise, Rosmarin says it’s paramount to provide background materials ahead of the meeting, so the conversation can focus on solutions and strategic issues rather than regurgitating information.

It’s also worth considering the activities of other functions which may impact your work in HR, he adds.

“For example, the Sustainability team may be involved in charitable giving or partnerships which have a potential people engagement piece. Think about how to bring those areas together to achieve greater impact.”

Developing business partner skills

There are useful complementary skills you can build that will help you to become a stronger board presenter, says Bell.

“Get to know your board. Speak with them; your board are people who have their own interests and concerns. So learn what keeps them up at night. 

“And if you haven’t already, ask to sit on a governance, risk, finance or P&C board subcommittee. Then get the backing of the subcommittee to support you to present to the board.”

This helps you to be seen as a true business partner, she adds.

You also have to be commercial, adds Rosmarin.

“You have to understand the business strategy and the financial plan. All people initiatives need to be seen in the context of how they are helping shape the business. The nice thing about working in HR is that you are often able to think longer-term, and I think that’s a real gift. You’re focusing on how to create a truly sustainable organisation.”

Need help writing a board report? Learn how to write clearly, professionally and succinctly to capture the attention of your intended business audience with AHRI’s short course in professional writing skills.

Common mistakes to avoid

Be careful of overloading a paper with too much information, or using inaccurate data, says Bell.

“Avoid reporting on all the issues and not having any strategic initiatives aligned to address them or producing a report that has a lack of structure. A board report has the ability to effect great and lasting change, so make it impactful,” she says.

When writing a board report, don’t bury tricky or complex matters in a mound of other information, says Rosmarin. And try to avoid addressing these for the first time in the meeting.

“It’s often a good idea to seek out the Chair and speak to them before the meeting and say, “I’ve got something challenging that I’d like us to discuss in the meeting”. These meetings aren’t about just presenting your work for approval; they’re about getting input and feedback and often working through challenges together. Remember, the board is there to help – they want to add value. “

Effective board reporting is a fantastic way to demonstrate the value of the people function to the broader business and further boost HR’s influence, says Bell.

“It can help businesses to make better decisions. Sometimes HR professionals feel frustrated at not being heard or valued. But I think there’s an opportunity for every HR professional to influence and be seen as a trusted adviser by the board.”

A longer version of this article first appeared in the February/March 2024 edition of HRM Magazine.

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