What Is Evidence-Based HR? Examples, Benefits, and Decision-Making Steps
Organizations increasingly utilize data to make decisions that ultimately impact their bottom line. This has provoked the transition into an evidence-based approach to HR functions. How does evidence-based HR benefit organizations, and how can you put it into practice at your business?
Contents
What is evidence-based HR?
Examples of evidence-based HR
Benefits of evidence-based HR
Obstacles to practicing evidence-based HR
Sources of data for evidence-based HR
Steps to making an evidence-based HR decision
What is evidence-based HR?
Evidence-based HR is the practice of making decisions supported by evidence from the following sources to help ensure the desired business outcomes are reached:
- Available internal data
- Research findings and empirical studies
- Expert judgment and real experience
- Values and concerns
This method shifts away from basing HR management on trends, biases, quick fixes, or word-of-mouth success stories. Instead, it progresses toward critical thinking about what works and doesn’t work for tactical decision-making. After all, a U.S. survey referenced by a Society for Human Resources Management article exposed inconsistencies between what HR practitioners often believe to be valuable and what research proves to be effective.
The field of medicine pioneered the evidence-based approach. Medical practitioners started relying on relevant evidence to enhance their expertise for added certainty in their clinical decision-making. This resulted in more effective healthcare. Evidence-based practice has spread into many other disciplines, such as education and public policy, with HR joining in as well.
Examples of evidence-based HR
Seeing what evidence-based HR management looks like in practice can demonstrate the value it offers. Here is one hypothetical illustration:
An organization’s leadership has asked HR to address the problem of high absence rates. Instead of just suggesting an anecdotal method you recently read about, you would start with some research. Were any previous initiatives to manage absence rates, and were they impactful?
It turns out that some managers had sporadically followed up with employees when they come back to work, but it wasn’t consistent enough to affect the absence rate. You find credible sources on how to conduct successful return-to-work interviews and take on the responsibility of a trial program, tracking the feedback. That data is compared to the previous absence rates, and a slight reduction in the absence rate surfaces. Managers are then trained to efficiently conduct return-to-work interviews themselves. HR continues to review that data for absence patterns and alerts managers to the trigger points that seem to precede employee absences.
One real-world instance is that of PNC Bank, which embraced an evidence-based mindset on performance management. Its HR team employed tools and analytics to better understand the risk pertaining to their numerous incentive plans. Thinking through all stages of the talent cycle provided better knowledge of the nature of certain jobs. HR was then able to create a framework to mitigate risk instead of simply doing away with the bonus policies.
Now for a case of how evidence-based HR principles could have saved one employer a great deal of money:
The city of New York invested $75 million in incentive payments for teachers in 2007. The assumption was that it would motivate teachers to be more satisfied and productive and lead to improvement in their students’ performance. As it turned out, the program had no impact on how the teachers performed or student achievement. If school officials had done some research, they would have discovered evidence that this approach was unlikely to deliver their presumed results.
Benefits of evidence-based HR
Today’s fast-paced, highly competitive business world requires sound decision-making for organizations to stay competitive. When HR adopts an evidence-based mindset, it can better support company goals. The many benefits of this include:
- Aligning HR practices with strategic organizational goals – An organization’s most important asset is its workforce, which can have a direct impact on the organization’s business performance and bottom line. Using an evidence-based approach, HR will be able to, for example, balance the amount of compensation offered with the existing resources of the organization, or decide on the number of new talents they need to hire to help the organization further expand.
- Systematic and consistent decision-making that generates effective interventions – Think of recruitment, for example. By utilizing hiring data, HR professionals can help their organizations increase recruiting efficiency by 80% and decrease up to 50% of attrition rates.
- Reducing speculation, uncertainty, and errors in judgment – Every professional, no matter how senior or experienced they are, will always have their own biases. The presence of data and evidence in people management and HR decision-making will help reduce those biases and allow the team to make judgements based on a shared objective reality instead of just gut instinct.
- Improve credibility and stature of the HR profession – Gone are the days when HR is seen as merely an administrative team with no real strategic value. By utilizing a data-driven approach to an organization’s people issues and applying HR best practices, HR can directly contribute to increasing the business’ bottom line and realizing business goals.
- Ensuring solid risk management – With data, HR people can not only understand what has gone wrong in the past, but also have an insight into what might happen in the future. This means that HR can make decisions and plan accordingly in order to effectively minimize the possibility of failure when implementing their future initiatives.
Obstacles to practicing evidence-based HR
As with any new way of doing things, there are always obstacles to overcome. When trying to promote evidence-based HRM, these are the hurdles you may face:
- Resistance to change – Many people are skeptical about new methods and resist leaving their comfort zones. They might also fear that a new approach will reveal flaws in current practices that reflect poorly on their efforts. Consequently, it can be challenging to convince them that it’s safe to move beyond “the way things have always been done.”
- Low data literacy – HR practitioners might not have the knowledge and skills needed to read and interpret workforce data and other figures and translate it into action. They may also be apprehensive about the process of learning what they need to know.
- Lack of access to data – If HR does not have essential company data at its disposal, it hampers the effort to make evidence-based decisions. HR needs the right resources and the ability to analyze data from all functions of the organization.
- Perceived time issues – Decisions often need to be made quickly, and going through the process of gathering and analyzing data might be seen as time-consuming. However, the reduction of errors and improved efficiency outweigh this.
Sources of data for evidence-based HR
Evidence-based HR professionals must consider data from an assortment of sources and confirm that it’s applicable within the context of each situation. The following four tools are the main sources for HR professionals to consider when researching evidence-based practices. They are equally significant; however, you may find that some are more readily available and better suited than others for the area you are focusing on.
Scientific research/literature and empirical studies
HR should critically evaluate the best published scientific research because it’s objective, dependable, and provides a general idea of the current studies in a specific area.
High-quality academic research is intended to be accessible to the public. It may seem intimidating to read and attempt to interpret scholarly research, but in fact, readers without a technical background can understand most articles.
Scientific research results can support HR decisions with all kinds of data, such as:
- Common factors that cause employees to leave
- Recruitment methods that successfully predict strong performance
- Average absence rates in other similar jobs/industries
You should choose only sources that offer validated research from credible experts, but don’t default to just one or two. In fact, comparing insights from multiple sources gives you a better assessment. Such references can include:
- Management journals (e.g., Harvard Business Review)
- Academic journals and publications (you can search for them with Google Scholar)
- Professional advisory networks (e.g., Deloitte or Gartner)
- Human Resources research and development groups (e.g., SHRM)
This type of evidence is very valuable and should be considered when making decisions. That being said, what you learn is not always guaranteed to lead to success. Evidence is simply one means of weighing the likelihood that a particular solution will be effective before you put it into action.
Internal company data
Today’s organizations are consistently collecting all kinds of data. Drawing the relevant raw information from this pool supplements your scientific research with useful evidence to suit the context and vice versa.
You can look through the numbers, such as productivity, retention, and turnover rates. Carefully reviewing current and past employee satisfaction surveys can help you understand how the work environment, company culture, and leadership are perceived. You can also review internal precedents and start asking questions. What approaches or initiatives have worked in the past? And, on the contrary, which ones failed?
Comparing the different types of internal business and people data can help you get to the root of problems and provide insight into potential solutions.
Professional expertise and judgment of practitioners
Those with specialized education or professional experience have accrued tacit knowledge that gives them good judgment when reflecting on a situation. Such people include business leaders, HR executives, managers, and consultants. Their expertise allows them to offer not just an opinion but input based on lessons learned from processes or outcomes played out over a history of repeated similar circumstances.
You can expand on your research and data with these individuals who offer a vital contribution. They can help you decide if the research directly applies to the situation, if your data is reliable, and whether a proposed solution is likely to be successful.
Do keep in mind that personal experience can also come with a personal bias. Be aware of how someone might have a particular agenda to push or something they’re trying to sell. If this is the case, weigh their input accordingly.
Stakeholder values and concerns
Too often, business decisions are made without consideration for the varying perspectives of all the groups or individuals that will be affected. When operating under evidence-based methods, HR must engage with those involved to gain an appreciation for their expectations and concerns.
The decisions or their consequences likely affect some of the following key stakeholders:
- Employees
- Managers
- Applicants
- Customers
- Board members
- Shareholders
Collaborating with stakeholders to gather input is not only courteous, but it also provides more influence to expand your frame of reference. In other words, taking into account the scope of what is important to stakeholders may lead you to a different conclusion. This can also result in an improved perception and reception of the decision.
Steps to making an evidence-based HR decision
Since evidence-based HR has several facets, there is a procedure that you should follow. Here are six steps that will guide you through the decision-making process:
1. Identify the problem and pose an answerable question
What is really going on? Spending time asking yourself what is at the heart of the issue will pinpoint exactly what you need to solve. Often the problem that has surfaced is merely indicating that there is another underlying matter that you need to uncover. This is an excellent time to get input from others to learn if they see the same nature of the problem.
Once you have identified the business challenge that you must address, explain it in the form of a question. (What responsibility does our organization hold as an employer in the increasing employee absence rate?) This will help you form better hypotheses toward the right solution.
2. Develop hypotheses
Start brainstorming why the problem/issue has occurred and what the potential solutions to the problem can be. Again, this should not be left up to one person, so get colleagues, managers, employees, etc., involved. At this stage, come up with plausible reasons for the problem and possible remedies. (A lack of employee engagement is affecting the absence rate. Improving employee engagement will motivate people to be at work.)
3. Gather data
Using the four types of data sources listed above, search methodically for evidence that will help you prove or disprove your hypotheses. Inventory your internal data to see if it can serve your purpose and find diverse external sources for a variety of unbiased input.
4. Analyze data and aggregate evidence
Pull together all the data and evidence you have collected, so you can identify what you have and may still need. Be sure to consider everything and not just what proves your theory. Your findings may prompt you to fine-tune your original hypothesis.
Examine the evidence critically to weigh its reliability and relevance to the situation:
- Is this the best of the available information?
- Is it biased in any way?
- Does it support the hypothesis adequately?
- Does it justify the proposed solution?
Be aware of any partiality that lurks in the evidence because it can affect the outcome. The professional expertise sources are the most disposed to holding a bias, so you should consider the following:
- Is the situation in the evidence a similar environment to ours?
- How frequently has this person encountered this particular issue?
- Did they have a clear view of how the situation actually turned out?
5. Apply the evidence
Now it’s time to analyze what evidence is implying about your hypothesis and turn it into action. What is it telling you to do, and how will you execute the solution? If there are risks involved in the final decision, decide whether they are worth the potential gains.
Move into the implementation phase with confidence and provide the necessary tools or training to those who will be affected.
6. Assess the outcome
The final phase of evidence-based decision-making is evaluating its outcome against your expectations. What has your decision resulted in? Gather feedback to see how it has performed and how different stakeholders have received it. Furthermore, understanding whether the action panned out the way the evidence indicated can help shape the future business strategy.
Carrying it forward
An evidence-based HR approach can’t guarantee perfect results every time. However, it is an intentional way of bringing in a wider range of information for a better chance of getting it right. Implementing evidence-based decision-making can seem like a daunting task, but it is well worth the effort. Not only will it help you make more effective decisions, but it will also ensure that your department is truly contributing to the strategic goals and financial performance of your organization.
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