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Forrester: Lack of Data Literacy Undermines Business Performance

March 16, 2022

Research has explored the role data skills play in driving business outcomes. The study, titled 'Building Data Literacy: The Key To Better Decisions, Greater Productivity, And Data-Driven Organizations', found that despite increasing demand for data skills, insufficient training and investments are leaving business leaders with a false sense of security.

For the global study, Forrester surveyed more than 2,000 executives, decision-makers and individual contributors in 10 countries, all working at global companies with 500+ employees.

Data skills are increasingly vital, yet training lags
Survey respondents agree, data and analytics are mission-critical to thriving in rapidly-changing circumstances—informing decisions, seeing opportunities and navigating change. As businesses embrace a digital first environment, data literacy becomes increasingly crucial.

"Data offers a key competitive advantage. Business success depends on training and enabling everyone across an organization to use data to make better decisions. To unlock the power of data, businesses must invest in their most essential resource — their people — by providing opportunities for data training and development beyond traditional data-focused roles," said Mark Nelson, President & CEO, Tableau.

Today, 82 percent of decision-makers surveyed expect basic data literacy from employees in every department — including product, IT, HR and operations. And expectations are only increasing. By 2025, close to 70 percent of employees are expected to use data heavily in their job, up from 40 percent in 2018.

While business leaders and employees agree that data skills are increasingly essential to understand and act on the vast amounts of data their organizations produce, that awareness doesn't translate to investments in data skilling.

In fact, nearly three-quarters of decision-makers believe employees should improve their own data skills through ad-hoc, on-the-job knowledge, usually from coworkers or trial-and-error. Only 39 percent of organizations make data training available to all employees, with the onus to train people usually falling to department heads or team levels.

While the global data literacy skills gap is clear, so is the opportunity
The disconnect between decision-makers' beliefs and the reality employees face may result in steep costs for businesses, but also presents an unprecedented opportunity. As companies rapidly transition to digital-first models, the need for informed insights will only intensify. Data literacy—people's ability to understand and work with data to the appropriate degree—can be a stepping stone or stumbling block to building a data-driven organization.

"We've seen a 96-fold return on our data investments. Data culture is more of a journey than a destination. Celebrate your wins along the way but always look to improve. Data's value is the existential: the existence of your business," said Clive Benford, Data Officer Director, Jaguar Land Rover. "If you don't become a data-driven business, I don't think you'll be here in 20 years. The long-term value is existence."

Even small training investments boost business performance, employee retention and innovation
Forrester found that upskilling initiatives, formal and informal, produce clear benefits for employees and businesses alike including improved performance, customer and employee satisfaction and employee retention.

Across the board, employers highly value data-skilled employees — viewing them as making better and faster decisions while being more productive and innovative. Employees agree: 83 percent believe they make better decisions and 82 percent make faster decisions when they use data.

Nearly 80 percent of employees surveyed say they're more likely to stay at a company that sufficiently trains them with the data skills they need.

About the study

For this study, Forrester surveyed more than 2,000 executives, decision-makers and individual contributors in ten countries including Australia, Brazil, Canada, France, Germany, Japan, Mexico, Singapore, the United Kingdom and the United States. Respondents work at global companies with 500+ employees.

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