As an SME, you’ll know better than any just how limited your time and resources are for HR matters. It’s tempting to think you’re “too small to worry about HR” but there are no exceptions to statutory and regulatory requirements regarding record-keeping, information gathering and reporting.

But what about some of the ‘deeper’, more sophisticated (and therefore time-consuming) HR activities? As an SME, can you, should you be a little more ambitious in your take on HR?

HR data is a prime example. All businesses record and track HR data to some extent, but the real question is, having gathered that data, are you getting the most from it?

5 ways in which SMEs can get more from their HR data:

Reward your high performers

It’s pretty uncontroversial to operate a bonus scheme or similar additional compensation in exchange for exceptional work. But just because someone is doing a lot, exceeding what’s asked of them, that doesn’t necessarily mean they’re contributing to the same degree.

Is all that effort really translating into better business outcomes? In a smaller setup, it should be relatively simple to get an organisation-wide picture of compensation (covering all the different roles and responsibilities) and map it across to performance results. You can see where your money is going but is it going to the same people who are driving your business? It should.

Hanging on to your best people

Retention is important because recruitment is expensive, arguably especially so when you’re a smaller organisation with a limited budget and other, larger employers are dangling fatter carrots to lure away your best people. One way to reduce your staffing losses is to look at what your HR data is telling you. The usual metrics are figures regarding turnover, resignation, dismissals, etc. But the key is to monitor them continuously, enabling you over time to get a more accurate picture any trends, ideally measuring the impact of turnover on your business results.

Predictive analytics

In HR tech circles, there’s a lot of talk about the value of predictive analytics – analysing past information to predict future results – and has been for some years now. The four basic levels of HR reporting are:

  1. Basic operational reports, answering various How many? questions. Comforting statistics to have, maybe, but limited application in looking ahead.

  2. Advanced operational reports using wider sources of information to benchmark and analyze performance. This level enables you to compare performance across the team.

  3. Strategic reports that rely on segmentation and statistical analysis of your data to develop ‘people models’ that enable you to look ahead with some accuracy.

  4. Predictive analytics that potentially combine all manner of people and business data, leading to scenario planning and detailed risk analyses. Now we’re talking high strategy.

Most organisations, including SMEs, tend to stick with the first two levels, if that. But even an off-the-shelf HR analytics package can offer valuable input to your succession planning, talent management, staff retention, and workforce planning.

Democratise your people data

In other words, there are benefits to making your HR data more widely available. A common SME organisational model is that of the single leader taking the majority (or all) of the responsibility. It’s an approach with a lot of consistency but it can be slow, and there’s a risk that decision-making will be based on a too-narrow perspective.

But, alongside the ‘big strategic’ uses for your HR data, there are more everyday uses possible when you share that data among your whole team. Imagine an HR ‘dashboard’ accessible by your managers and supervisors, with performance, attendance, and engagement metrics for their teams.

Often, what data analysis there is focuses on using the past to decide the future (e.g. What do last year’s figures tell us and how can we use that in the year ahead?), whereas the goal should be a more instant use of available information (e.g. What just happened and what do we do now?). This doesn’t have to be particularly sophisticated. For example, try giving your managers real-time access to basic information, such as unexpected sick leave and other absences, to help them better schedule the work and deploy their team. Such straightforward data usage can be the first step in encouraging more decisions based on facts rather than off-the-cuff, we’ve-always-done-it-this-way choices.

Know how to read your data

Finally, at the risk of pointing out the obvious: the more data skills you and your people have, the more you can potentially benefit from your HR data. Traditional HR skills haven’t tended to include data management and analysis. Which is not to say you need to recruit a dedicated data specialist, but training somebody up (or maybe retaining an outside consultant) to better understand and analyse your people information can help you beat the main challenge: using your HR data to have a real impact on business performance.


Business case for HR software