HR data management software: is your data an asset or a liability?



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12 mins


Good HR data management software should make compliance simple – but more than this, HR systems can turn your people data into a true asset. Does yours?

Organisations with better mastery over their data are better placed to weather storms – and there’s been no shortage of those over the past few years – which means HR analytics have been at the forefront of HR leaders’ minds recently as they’ve responded to challenges such as the expansion of remote working and hybrid working, and an increasingly difficult financial environment.

While HR analytics are important from a compliance perspective, which is understandably a major concern for many HR teams, modern HR data management software goes much further – turning your people data into a source of insight that enables sophisticated data-driven decision-making and improves the employee experience.

Let’s explore that, so you can evaluate how your HR data management software stacks up.

In this article


HR data management software should keep your data private and secure

HR holds sensitive data about employees, like personal details, salary data, and performance review data. It’s your responsibility to protect this info, keeping it both private and secure. Typically, this is done through using HR data management software.

These are closely related concepts that sit under the data protection umbrella. As Data Privacy Manager explains: “Data privacy is concerned with proper handling, processing, storage and usage of personal information… Privacy, in general, is an individual’s right to freedom from intrusion.” On the other hand, “data security is focused on protecting personal data from any unauthorised third-party access or malicious attacks and exploitation of data.”

In an HR context, data privacy means your employees have the right to know which data you collect about them, how you use it, and who has access to it.

Your HR data management software should ensure employee information (particularly if it is sensitive, personal information) is collected, stored and used in compliance with the GDPR and that employees have control over their own data. It should also help ensure employees are informed about the data you hold and enable you to delete data promptly when employees leave.

Data security means implementing cyber-protection measures to keep your people’s data safe from unauthorised access, breaches, or attacks. This could include measures like encryption, access controls and permissions. It should also include processes to respond quickly if a breach does happen, and training for your employees to help them identify breaches and potential cyberattacks.

And breaches do happen. According to a 2022 government report, two in five UK businesses reported cybersecurity breaches or attacks in the previous 12 months. WHSmith is one of the latest to join an increasingly long line of affected employers, after a cyber attack in March 2023 meant that details of current and former staff were accessed illegally.

Such breaches are a nightmare for HR (and C-suite leaders), and the consequences of mistakes can be severe:

  • Infringement of the GDPR can incur a ban on how you use data and a fine of up to €20 million or 4% of the business’s total annual worldwide turnover
  • Data breaches can expose sensitive employee data, risking identity theft, financial loss, and emotional damage. This opens the organisation to legal action: costly, time-consuming, potentially expensive, and altogether better avoided
  • Data breaches can erode employees’ trust and damage morale, contributing to reduced productivity and increased attrition
  • Breaches risk major reputation damage, both from a consumer and an employer brand perspective. Issues like this can impact your ability to successfully attract, hire, and retain talent – and also hurt the bottom line by impacting customer spend and loyalty
  • Breaches can also be expensive to investigate, even before fines. If you suffer a cyberattack, you need to conduct thorough investigations to search for the source of the breach and close vulnerabilities, to restore consumer and employee confidence, and ensure the same doesn’t happen again

The right HR data management software helps protect against these risks, equipping you to collect, handle, and store employee’s data with confidence, in accordance with data protection regulations.

Your HR software provider should have robust security measures in place to keep your data safe. This is likely to include secure data storage, backup, and recovery protocols, plus tools to protect against cyber-threats.

Ciphr offers top-tier data security:

  • We’re ISO 27001 accredited and Cyber Essentials Plus accredited, and are audited externally annually to maintain compliance
  • Our applications and infrastructure are regularly assessed with internal and external vulnerability and penetration testing
  • Our internal security forum – which includes certified GDPR practitioners – meet regularly to review security measures, policies and procedures
  • We deliver regular data security training to all Ciphr employees, who are all background-checked to a minimum of the BS7858 standard
  • Our HR data management software features tools to assist with GDPR compliance, and includes a data retention dashboard for employees and leavers so you can manage and delete data appropriately
  • Ciphr is a cloud-based platform. Cloud systems are typically more secure than on-premise solutions because security is baked into design and delivery, and it is easier to make frequent upgrades to the software to keep it secure


HR data management software brings together various data sources to help you make better decisions

The right HR data management software can also fuel better decision-making

Data protection understandably tops most HR professionals’ priority list when it comes to people data. But where things get really interesting is the next step: where your data becomes a true asset to the organisation.

Your HR function generates an ever-growing wealth of data, including:

  • Job applications and CVs
  • Recruitment and onboarding data
  • Performance data and feedback
  • Disciplinary and termination data
  • Benefits data
  • Time and attendance data
  • Learning and training data
  • Diversity and inclusion data

This data isn’t just a source of information that needs protecting. It’s also a source of insight, to leverage in service of better decision-making.

That’s the real question HR professionals should be asking: does our HR data management software empower us to make the best use of our most powerful asset, with sophisticated HR reporting and analytics?

With the right human resource management software, you can not only fulfil your basic reporting obligations but also conduct more sophisticated analysis and modelling. Good HR data management software should make this process simple, with reports customised to deliver insight into what your organisation cares about most, and these reports automatically compiled and sent to the right people.

Moreover, HR shouldn’t be gatekeepers of data. The real value of data is seen when everyone across the organisation can leverage relevant data, to make better decisions every time.

Which key people metrics does HR data management software typically support?

Modern HR data management software can help you report on everything you collect information about. That is, on everything that happens digitally within your people processes. For example, you might want to track metrics such as:

  • Equality and diversity in the workplace metrics like representation, diversity flows through the organisation, and employee satisfaction with diversity initiatives
  • Succession planning metrics, to track employee development and grow your leadership pipeline
  • Performance and performance distribution, to track how employees are performing and whether managers are fairly measuring performance
  • Turnover rate at organisation, department, and team level, to understand trends and reduce or mitigate the impact of churn
  • HR costs, to measure the cost of your people functions and spot opportunities to improve efficiency
  • Attendance and absences, to better understand absences, quantify and reduce costs, and prepare with foresight

Although even a standalone HR system offers reporting benefits – especially if you’re not currently using specialist HR software – the biggest advantages come when you choose an integrated HR platform that unites all your people functions, their software, and their datasets.


Use HR data management software to get better insight into your teams

The benefits of choosing integrated HR data management software

A major issue with HR reporting and analytics is that data is often spread across numerous disparate systems, not integrated into a single source of truth. For example, HR analyst Josh Bersin finds that the average large company now uses an average of 9.1 core talent applications.

This fragmentation has big implications for your people data, introducing potential vulnerabilities, areas of overlap, inaccuracy, and an all-round loss of visibility and control.

This single source of truth is a particular concern within the education sector because of the single central record safeguarding requirementHR software for schools must enable organisations to maintain this single integrated record.

An integrated HR system connects all your people-related systems into a single source of data, either through robust third-party integrations or by choosing a provider with a suite of solutions that already work seamlessly together.

That way, your data is much more accurate and you can gain a bird’s eye view over the employee experience, connecting employee data across systems. When that happens, you can report on a broad range of people metrics. Like:


Recruitment metrics

1. Time-to-fill. Understanding how long it takes to fill open roles helps fuel smarter decisions to improve recruitment and allows for more accurate performance projections. For example, if your average time-to-fill for project managers is two months, you know when to start requisition before your big project kicks off. Or, if time-to-fill is increasing and you’re losing hires accordingly, you might make the sensible decision to amalgamate recruiter and hiring manager interview stages.

2. Cost-per-hire. Understanding how much it costs to recruit helps identify areas to reduce costs, and powers smarter budget requests and allocations. For example, if you know your average cost-per-hire you know whether your headcount targets are achievable with your current budget, or whether you’ll need to explore process changes. You might allocate activity towards more efficient hiring sources and then track whether that decision has been cost effective.

Integrated HR and recruitment software often also reports on recruitment metrics like:

  • Applicant source
  • Quality of hire
  • Candidate experience
  • Offer acceptance rate


Payroll metrics

If your core HR data management software integrates with your payroll software, you’ll also be able to report on a wide range of specific payroll metrics, including:

1. Payroll error rate, measuring the percentage of payroll transactions that contain errors, requiring rework. Understanding this helps the payroll team make changes to reduce errors and save time. For example, if you’re consistently seeing errors during manual data transfer from system to system you might decide to automate the process with integrated HR and payroll software.

2. Payroll processing time. Understanding how long it takes to process payroll from data collection through to pay distribution helps payroll teams spot bottlenecks and optimise processes. For example, a common bottleneck for payroll is during data entry and verification, because teams often rely on manual input that generates a high number of errors. Verifying data, reconciling sources, and resolving errors can take a long time: time that could be saved by capturing more accurate, complete payroll data, with payroll software that integrates seamlessly to your other systems.

Integrated HR and payroll software typically also reports on payroll metrics like:

  • Gross-to-net ratio
  • Payroll compliance
  • Payroll costs
  • On-time payment rate
  • Error resolution time
  • Payroll overtime


Training and learning metrics

When you invest in HR data management software with an integrated LMS, you create opportunities to report across your L&D function, too (and without manual data entry or duplication). For instance:

1. Training effectiveness. Understanding how well the organisation’s learning and training programmes have helped employees grow relevant skills can help L&D teams make better decisions around training investment and prove training return on investment (ROI). For example, say you’ve invested into workplace inclusivity training. Understanding whether employees completed training, were engaged, and retained their knowledge informs continued investment decisions, to optimise your training impact on culture and mitigate compliance risk. It also helps you prove value upwards.

2. Time-to-productivity. Often part of onboarding, understanding how long it takes new employees to become fully productive helps ensure new hires are getting the right support. This improves new hire retention and accelerates how quickly new starters add value. For example, imagine one department consistently has a longer time-to-productivity than average. This could prompt further investigation into training and onboarding and allow for more accurate performance projections.

A robust LMS can typically also help you understand:

  • Skills gaps
  • Training completion
  • Training engagement
  • Training spend
  • Knowledge retention
  • Collaborative learning metrics
  • Training support metrics

Employees and managers alike will realise benefits from HR data management software

Benefits of HR data management software managers and employees

To transform your people data into a true asset, it shouldn’t be siloed but available to employees and managers, too. This empowers everyone across the organisation to make better decisions.

Good HR data management software should allow managers to track, measure, and analyse their team’s performance, confidently and compliantly. That way, they can provide support where needed and grow team performance.

Employees should also ideally have a personalised dashboard where they can access data about their own progress and performance. An HR platform with self-service functionality gives employees this control and visibility over their data.

This is a major boon for employee engagement and productivity, and saves HR many hours being an unnecessary middleman.

Embrace data as an asset for organisational success

Data security is crucial for HR teams – but the true potential of HR analytics extends far beyond making compliance easier. Good HR data management software should not only protect you but empower you to report, analyse, and truly get value from your data.

How does your HR software stack up? If you’re thinking you’d like to explore your options, we’d love to chat. Download our brochure to learn what Ciphr brings to the table. Or book a demo to see our tech in action.


This article was first published in July 2023. It was updated in October 2023.