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Intuition and gut feelings don’t work for strategic business decisions. Here are eight benefits of making skills data-driven decisions for the workforce.

“When you know, you know.” This glib claim is often uttered by people who believe in their own intuition and gut feelings. What they’re saying is that, despite indicators that might contradict their preconceived notions, they are willing and confident to decide on their own what to do next.

The problem is, that this approach doesn’t work well for strategic business and HR decisions. In fact, the opposite is true. Decisions based on skills data will give companies a far greater, more predictable lift. Here are eight benefits of shifting to data-driven decisions for your workforce.


What is Data-Driven Decision-Making?

Harvard Business School defines data-driven decision-making as “the process of using data to inform your decision-making process and validate a course of action before committing to it.” In business, that means using facts, metrics, and data – rather than intuition, gut feelings, or leaders’ best guesses – to make strategic decisions about how to achieve a company’s goals and objectives.

The same is true for using skills and competency data to drive workforce initiatives. A good understanding of your employees’ and managers’ skills, competencies, performance, and related metrics can help you make smart decisions about how to direct HR and company resources for optimal outcomes.


Benefits of Data-Driven Decisions

Guessing and good intentions can lead to poor decisions and costly mistakes. Companies then must spend time and money dealing with the mistake itself as well as on taking corrective actions.

By contrast, data-driven business and HR decisions outperform guesswork. Among other benefits, skills and competency data-driven decisions help companies:

1. Predict and prepare for talent shortages. When you have a good snapshot of the skills and competencies your employees have today – and a clear understanding of what skills your workforce will need in five years – you can see where the gaps are. Then you have time to hire and build the skills you need to future-proof your workforce.

2. Make better use of personnel. Especially in larger companies, it’s not uncommon for one organization or division to lay off employees that have the skills another part of the company needs. By analyzing skills and competency data, you can find current employees whose skills are a great match for open positions in another part of the company – even if their job role is different from the open position.

3. Accelerate your hiring processes. Recruitment models that focus on skills are more efficient and effective than more traditional methods that heavily weight education and previous work experience. They also open you up to a broader talent pool, giving your company more potential employees who have the skills you need.

4 Reduce bias in the workplace. We all hold some sort of bias. Without sound information or data, we can make unfair decisions based on our own preconceived notions. By keeping skills and competency data central to hiring decisions, performance reviews, and promotions, your company will make better decisions based on the skills and results that matter. You’ll likely build a more inclusive workforce at the same time.

5. Improve Employee and Manager Performance. By giving all personnel access to their own competency and performance data, they can make better, more informed decisions about building the skills they need and pursuing the opportunities they desire. The same is true for managers who seek insights into their own performance – and that of individuals on their teams.

6. Identify trouble spots. By routinely assessing employee skills and analyzing skills gaps, it’s faster and easier to identify areas that need attention. Assess individual, manager, and team performance. Analyze development opportunities, sales metrics, and employee performance. You’ll quickly see trends that show what’s working and what’s not when it comes to management impact, learning and development effectiveness, and progress against goals.

7. Reduce turnover. If your company has unwanted turnover, take a closer look to see what’s causing people to leave. Are employees not developing new skills – or the right skills to do meaningful work at your company? Measure employee engagement to see if there is a correlation between disengagement and resignations. Conduct exit interviews to hear what departing employees identify as their top reasons for leaving your workforce.

8. Build a culture of transparency. Financial teams routinely look at all their data – good and bad – to make good decisions and keep the company on a firm financial footing. As your team starts to use skills and competency data across all levels of the organization, you’ll “establish a common language across teams,” as this Forbes article points out, and build a culture of transparency for workforce performance. It then becomes easier for employees to see and pursue career paths; for managers to provide feedback and coaching to employees; and for individuals and teams to understand how their contributions align with company outcomes.


Get Started with Data-Driven HR Practices

Utilizing data for strategic decisions doesn’t happen overnight if you’re not relying on it now. Usually, it’s not a case of not having enough data; it’s having too much. You’ll want to identify, pull, and analyze the data you need.

To begin your shift to data-driven decisions:

  • Identify the data you need. Select the most pressing business or workforce issues your company is facing. Are you planning a merger or acquisition, moving into a new market, or facing competitive market pressures? Perhaps you’re focused on improving recruitment efforts, re-skilling or upskilling your workforce, or retaining more employees. The top concerns will be different for different businesses – and for any business at different points in time.
  • Access relevant data. The best place to collect, analyze, and manage your skills data is in a technology platform designed for just that purpose. Avilar’s WebMentor Skills™ is one such competency management tool.
  • Analyze your data sets. Ideally, you have centralized access to skills and competency data for current and past employees, so you have a rich data set to see patterns over time. A robust competency management system will have flexible reporting capabilities so you can understand the impact of your decisions across the business, on specific teams, and on individuals.

Results of your analysis will help you identify the strengths and weaknesses of your workforce, take action to improve training programs, develop your workforce’s skills, and improve their performance to achieve your company goals. When tied directly to business goals, skills and competency data can help you make better strategic business and workforce decisions – and shape HR strategies to build the skills your workforce needs for the company to thrive.


If you’re exploring how to incorporate a data-driven approach to decision-making, download our Competency Management Toolkit for insights. Or contact us to find out how Avilar’s WebMentor Skills™ competency management systems could support your team.


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