In the present world, the digital transformation of business processes generates extensive data for decision-making. With the HR industry experiencing a prevalence of widely used HR tools, there has been a tremendous increase in the use of data and analytics. Besides flooding data, the introduction of the tools also indicates that the HR departments across organizations lack the knowledge to analyze and synthesize those data. HR professionals need to be data literate if they want to thrive in the current and future business world.

In this article, we will explore the concept of data literacy, the importance of data literacy, and the steps to developing data literacy.

HR Data Literacy: Understanding the Concept

Data literacy is understanding, interpreting, and applying data to create business value for the organization. It’s a skill that empowers all workers to ask the right questions regarding data and machines, build knowledge, make decisions, and communicate meaning to others.

Poor data literacy is the second-biggest internal roadblock to the success of the CDO’s office. By 2023, data literacy will become essential in driving business value, and its formal inclusion will bring change to over 80% of data and analytics strategies and change management programs.

Data literate professionals can analyze, gather relevant information, and apply the right data at the right time and place. Organizational leaders and professionals can easily translate raw numbers into actionable, useful insights when they are data literate.

Alongside business acumen, digital proficiency, and data literacy, it emerged as one of the core HR competencies. If your organization’s HR professionals possess data proficiency skills, they can extract valuable insights from the data for developing strategic decision-making and enhancing innovative HR processes.

Why HR Data Literacy?

Since digital processes generate abundant data, HR professionals must know how to filter relevant information. The research found that organizations investing in data literacy and upskilling across departments experienced dramatic benefits, such as improved customer experience, better decision-making, a positive employment experience, and higher retention. Another study states that leaders from various industries and business verticals showed that approximately 89% considered data literacy a high priority because data has an evident impact on their business results.

Data literate HR professionals can leverage data better to reap the following advantages.

1: Make evidence-based decisions

A lack of information leads to unproductive decisions, and a wrong decision has an enormous impact. The rapid shifts in workforce contexts often create challenges for employers. According to a recent study, about 9% of organizations believe they have a better understanding of which talent dimensions drive performance.

Evidence-based decisions supported and verified by research mitigate the risks to improving quality in every field. HR professionals’ ability to analyze and visualize data brings insight into what’s happening within the organization. Your human resources team can create a measurable impact through strong data literacy in HR processes and outcomes. It helps organization leaders to connect the dots from HRM activities and approaches to the outcomes, further connecting to your organizational goal through the HR value chain.

2: Achieve operational efficiency

Widespread use of analytics is effective in spotting underlying causes of problems. HR departments, with this knowledge, can help the organization design new programs to increase talent development and retention. Departments across organizations use data analytics to set new targets and measure their effectiveness. Moreover, a thorough interpretation of information stimulates continuous improvement methods and new efficiencies.

3: Boost operational excellence

More data is available for innovation with increased digital tracking of organizational aspects. Organizations capable of interpreting the information would soon emerge as leaders. According to a data literacy guide, organizations using people analytics to support HR functions and organizational decision-making experienced an 82% higher than average profit over three years. Does your organization lag behind in data literacy? In that case, your competitors who prioritize data literacy will experience better leadership development.

Your organization must utilize data analytics to explore, solve, and create new prospects. When more teams in your organization access and interpret data, it boosts collaboration. Enhance process optimization by turning the data into actions.

Steps to Develop Data Literacy

Do you want to develop data literacy in your organization? Here’s how you can.

1: Understand where to start

Unless you know where to start, it’s challenging to design a data literacy initiative. The first step is to identify the existing levels of data literacy before introducing any programs. You can utilize numerous assessment and measurement tools that you can use to measure the current status of talent acquired across your organization’s teams.

Once you grasp some data that fits your role’s scope, never waste it. Put actionable data to work for your organization, and share it with your team for effective decision-making. When you have enough data literacy to understand the relevance of data, you can help others understand the data. For instance, if your organization conducts a meeting on the following year’s recruitment strategy, you can bring data to the table during the discussion to determine the fill and yield ratios for effective and better planning.

2: Training the employees

Do your employees lack technical skills? Worry not, as they don’t need to possess advanced math or technical skills. Let your employees not get intimidated by data. Instead, encourage your professionals to embrace the idea that learning new skills helps in talent development, making you a more marketable HR practitioner.

Source some data literacy instructions that work for your employees. Engage your employees in training, even if you developed it for another function. You can also offer your employees self-paced online courses on people analytics, HR metrics, and dashboarding. Visual examples help the employees understand the concept, which will help your organization to drive digital transformation in HR.

3: Focus on your goals

Every organization clearly defines short-term and long-term goals that require achieving and devising policy measures and programs accordingly. In the absence of your organization’s concrete goals, you will experience chaos in terms of time and money. In such a scenario, the entire process will be cumbersome for the organization.

Once you determine the baseline for your organization’s data literacy level, outline your business-related goals and chart your expectations of where you and your staff are and their levels of data literacy. For instance, if your organization’s objective is to leverage data for process optimization, your professionals need to outline the following:

  • The respective departments were involved in the discussion.
  • The leaders involved requiring advanced data literacy skills.
  • The employees require knowledge of data literacy.
  • An adoption period to get familiar with and run data trials and mini-projects.

When you define your business goals, you can effectively lead your organization systematically to bridge the data literacy gap and score wins during the journey. It helps motivate your employees, create business values, and hit the core KPIs at stake.

4: Encourage curiosity

Encouraging curiosity is an essential element of building data literacy. If your teams aren’t open to exploring data, they are unlikely to uncover insights that help your organization innovate. A study conducted by Harvard Business School stated that approximately 92% of employees credited curious people for bringing new ideas across teams and organizations. It viewed curiosity as a catalyst for job satisfaction, motivation, and performance excellence.

When you receive a wider perspective, it strengthens your data and the validity of what you take from it. Since humans derive data, it is better to involve more employees for better interpretation. Questions like, Are we missing anything?

How does the data help us achieve our goals? are valuable conversation starters that help us discover more about the story your data is telling.

5: Assess continuously

Ensure you schedule regular reviews to access progress to date, measure incremental improvements, identify gaps and make changes to your data literacy programs. Successful data literacy programs are not a one-hit-wonder or set-and-forget activity. Instead, these programs will adapt to the organization’s evolving needs and technological advancements. Do keep an eye on reports and analytics, as your employees need to keep them in mind and focus on improving their data literacy. Your HR team must have access to a specific system that helps generate their basic and advanced reports for all the key metrics about their hiring process and utilize them to determine specific components. These include cost optimization, time to hire, and turnover rates, which help your team draw meaningful conclusions, form their hiring pipeline, and bring improvements into a slow process.


Data literacy empowers team members to succeed in their roles and makes cross-functional collaboration more straightforward and impactful. While there are endless ways to encourage team members to better navigate the complex world of data, the most important thing is ensuring your company emphasizes data literacy as a valuable skill across all levels.

Organizations can help employees by allocating specific periods to emerge as data literate or rewarding those who level up their data skills. Whatever your organization’s data literacy journey looks like, it will be worth going. If you want to outsource your organization’s non-core activities to a well-reputed company, search online with the terms “talent outsourcing services in Thailand” and talk to the professionals.

Author's Bio: 

HR digital transformation is the conversion in the way HR functions, using data to guide all areas of HR like payroll, benefits, and performance.