Smart tools and platforms can be crucial in assisting HR leaders leverage data and make informed decisions that support creating the right EVP, maintain competitiveness, and foster a positive work environment. 

People Matters spoke with Rahul Chawla, partner and head of human capital solutions for Aon SEA, to discuss the role of data in driving business results, motivating talent through compensation and how organisations can effectively harness the power of data to create a workplace culture that is agile, collaborative and successful. 

Here are some excerpts from the interview:  

Smart tools and platforms are critical in assisting HR leaders leverage data to make informed decisions in all facets of work. What is the role of real-time, granual data in enabling HR to raise its effectiveness to drive business results? What are crucial determinants of successfully leveraging data?  

Real-time data is very important for HR leaders to make better decisions. Now, those decisions could be regarding compensation, hiring, or performance management. All of them require a platform to capture market data as well as internal customer data, which is employee engagement/performance/assessment data. There are a number of tools in the market to enable HR to capture internal data. What is also required is to capture market data on performance metrics, compensation or demographics. I think that's where the imperative is in terms of capturing real-time data to make better decisions and also make use of predictive analytics to design systems and processes in a more elegant way.

In my opinion, these are the determinants that make data valuable

1) Data should be updated on a frequent basis helping it stay relevant in a volatile environment

2) There should be sufficient granularity in the data to provide meaningful insights within the internal context of the organization.

3) By using the data on the right platform, you should get the right insights. 

4) Data should be compliant with the regulatory framework of the country you are operating in.

Micro and macro-economic factors play a crucial role in an organisation’s business decisions. With constant fluctuations plaguing economies across the globe, how can data-driven decisions help companies stay resilient and agile? 

Human capital data is guided by economic data. If the data predicts a recession is on the horizon, companies will start bracing for it – we will see headcount numbers changing and shifting, we will see compensation cooling down. There will be shifts in headcount from one location to the other. We need to understand what the business direction is, how the organisation is going to invest in the business across capabilities, what is required from a human capital standpoint, and then leverage the data that we have. 

When you access data across markets segments, talent segments, demographics you can make better decisions so that the overall bottom line remains resilient, revenue grows at an expected pace and you're also managing risk. These risks could be financial (related to people costs and profitability of the company), operational (related to operations being located in a particular country) or compliance (covering pay equity, disclosures around DEI etc). Therefore, you need data to understand whether you are an employer that is backing, say, the narrative on DEI with actual, real-time data. 

There has been an increased focus on managers having honest conversations regarding pay and compensation with their team. What are some challenges that often come up during the compensation process? How do you see data-based insights helping elevate these conversations and take them to the next level? 

At a very fundamental level, data is your market intelligence. It takes away emotion, anecdotes and sensationalism from conversations. So, in those compensation discussions, data plays an absolutely crucial role. I can't imagine companies making decisions regarding talent, which is becoming increasingly in demand in certain segments, on the back of intuition. Data plays an important role in managing pay for performance narratives. For this, we need to understand what good performance looks like by having the right metrics in place. We understand what high performance looks like when we do, say, banking studies. We can give that intelligence to clients and define high performance for them. When it comes to pay equity, a company will either be deemed equitable when it comes to their pay policies or not, but there's always a gap that can be corrected using market data. This shows how data has various roles to play in terms of managing costs, setting budgets, managing performance holistically and driving sustainability policies.

How can organisations effectively utilise the power of data to create a workplace culture that is agile, collaborative and successful?  

Agility is the ability to embrace and thrive on change. In terms of compensation, if you want to incentivise change, then you need to have a compensation tool to accelerate change and incentivise people who embrace change. 

If you are a Java developer, and the company wants you to embrace new skills in cyber and data science, we need to think about how that change can be accelerated. First, you need to understand if that person has it within herself or himself to change, that is where intelligence on the  personality starts coming in – that’s an assessment conversation. Then you have to understand how much time would that person take to develop that change. And then, when you see that person has almost completed that journey towards adding new skills to the repertoire, you incentivise. it's not just paying for performance, it is also paying for accelerating and embracing change. 

Collaboration is rooted in how we manage performance – we have these shared scorecards where you have cascading goals and those are measured through competency frameworks and analysis and are rewarded through incentive plans, bonuses etc. Here, performance management plays a critical role. I believe collaboration is more of a conversation on culture and the ability of an organisation to be inclusive across demographics, skills and locations it operates in. 

Success can mean different things to different companies. Success for a technology company could mean turning profitable, for a bank success could be defined as transforming itself to digital. You need to set goals in place, define success and then work at developing the frameworks to enable that success. It is important to have the right incentives in place to accelerate success. 

Privacy and data security are important aspects when collecting and leveraging employee data. What does the data-driven future of work look like from a privacy and security standpoint?

Data is the oil of the future. All the data we capture can help us make a lot of decisions. But data is also something that is going through a lot of regulatory scrutiny today. If you're a company and you're a custodian of employee data, it's important you store it safely and responsibly, but it is a waste if you don't use it smartly and making the most of it. Today, data can essentially be compared to crude oil with the refining process akin to deploying analytics. Basically, you work towards extracting petrol along with all the other byproducts, getting the most bang for your buck. 

What it really means is that you have all the safeguards in place, you have to use the right platforms, the right cybersecurity frameworks, so that any personal identifiable information doesn't get compromised. Now, if you want to look at assessments that have a lot of personality information about a particular individual – do you want that information to be leaked to anybody besides that individual? No. But can you use that information to make your workplace better by defining leaders or helping middle managers become better leaders? The answer to that is yes.

But I would say, harnessing data is very important, but being compliant to the regulatory framework is even more important – because then there are huge risks, penalties, financial losses that you can incur if you're not complying. But, at the same time, if you're not harnessing data, then you are falling behind. 

Click here to watch an exclusive virtual discussion, organised by People Matters in association with Aon, in which experts from across industries came together to dig a little deeper into the power of data analytics, the future of talent management, how critical a well-crafted EVP is in today’s skill market and much more.