Data literacy benefits: Understanding the advantages and disadvantages

Introduction to data literacy benefits

Data literacy isn’t just for Chief Data Officers, data scientists, and the IT teams responsible for data management. Data literacy has always been an advantage for business professionals. But while developing data literacy used to be a way for high achievers to excel, it’s now a competency everyone needs.

With enormous amounts of data informing modern business decisions, data literacy has become a key skill set across industries. All kinds of professionals, from operations to finance, marketing to HR, are leading data initiatives, using data to build business intelligence, and making data-driven decisions.

This guide to the benefits and advantages of data literacy will help you understand why prioritising data literacy is critical for professionals and for organisations. We’ll also cover the advantages of continuing to develop data literacy and best practises for applying data literacy skills.

And if you’ve ever heard there may be potential disadvantages to data literacy training, don’t worry. We address that sticky issue as well.

Data literacy benefits

Most professionals understand the general importance of data literacy, but let’s take a closer look at the specific benefits of data literacy. For example, how data literacy supports data-driven decision making, problem-solving, and critical thinking.

Basic data literacy gives you the awareness to cheque data sources and apply critical thinking to data. That alone can lead to profound impacts:

• Shifting from a reactive position to a proactive one with real-time data
• Taking confident action based on better decisions
• Identifying and dismissing misleading graphs and cherry-picked data

Benefits for professionals

Most professionals will at some point need to write a business case for a manager or to the finance team. Data literacy is vital for any professional to make a valid business case to their stakeholders.

Data literacy becomes increasingly important as the stakes grow. Executives must have excellent command of data to present data-driven reports to a board of directors. A startup CEO who masters data literacy can create and convincingly present a data-driven pitch deck for fundraising to investors. On the other hand, managers, board members, and venture capitalists on the receiving end of presentations and reports must be highly data literate to evaluate the material they’re presented with. It’s up to them to make data-driven decisions about which projects to support.

Evaluate your level of data literacy, and seek out opportunities to build relevant data literacy skills. There is always more to learn, so aim to keep improving your level of data literacy throughout your career.

For example, there is a time and place for spreadsheets, but most businesspeople can do more if they learn to move beyond Microsoft Excel. Teams can perform more functions in Microsoft Access, get better visualisations in Tableau, or even automate reporting with Qlik.

This list of benefits just scratches the surface of how data literacy helps professionals:

• Participate in data culture — become conversant with data scientists and data analysts, and be a data steward for the data you know best
• Become a better communicator — create compelling, convincing narratives with data storytelling, and supporting your reports and presentations with data visualisations
• Prove your value — data literacy helps you identify meaningful KPIs (Key Performance Indicators) and track and communicate your success based on SMART goals (specific, measurable, achievable, relevant, and time-bound)
• Build marketable skills — as you develop your data literacy and master new tools, you increase your value as an employee and grow your salary potential

Benefits for organisations

As discussed above, data literacy improves each individual’s capacity to do their job, participate in their work community, and excel in their career. When you fill an organisation’s ranks with employees like that, the benefits of a data-literate workforce will become clear.

• Reduced risk — Data privacy and compliance are higher-stakes than ever, but data governance policies can only succeed if everyone understands them and follows them
• Management with metrics — Data-literate teams have the critical thinking skills and data analytics skills to set and report on meaningful Objectives and Key Results (OKRs)
• Data as a value centre — A data-literate workforce can ask the right questions and make sure enterprise-wide data returns business insights that bring value
• Empowered business leaders — Dashboards and data analysis skills help decision-makers act faster without relying on IT to process data for them
• Confidence failing fast and learning fast — A “fail fast” philosophy isn’t just about testing new ideas to their breaking point; it’s about iterating on your ideas with data so data-driven teams can put key learnings into action quickly

Data literacy advantages

A data-literate workforce supports a data-driven company, which can be more efficient and productive. But more than that, data is one of the biggest drivers of innovation. The benefits of data literacy translate into competitive advantage for your business:

• Cut costs and raise revenues with better, faster decisions
• Increase innovation with data
• Create better customer experiences with customer data
• Improve employee and applicant experiences

Advantages like these translate into tangible business value. According to Dataversity, "organisations with the top tier of data literacy had a greater enterprise value of three to five percent. This translated to hundreds of millions of dollars of value and better return on equity."

Developing data literacy

Growing data literacy has not kept pace with market changes spurred by the pandemic. This has led to a serious data skills gap. As a Data Literacy Project article puts it, the "pandemic has accelerated the speed and scale of digital transformation, which of course presents a huge opportunity. Yet, a deficit in digital skills now — on the part of an organisation or an individual — has the potential to jeopardise the future competitiveness of both."

The good news is that the shortfall in data literacy isn’t about ability. It’s about training. According to a survey Forrester conducted with Tableau, there’s a gap in leaders’ data literacy expectations, and the data literacy training employees receive.

Employees across all departments reported that the most important skills for success in their roles were basic data skills. But only 40% of employees said their employer had provided training on the data skills expected of them. This suggests a failure to accurately assess baseline data literacy and match training to employee needs.

Learn best practises for developing a data literacy training programme in our article about building a data literacy framework. You can also find lists of data literacy training resources in our ultimate guide to data literacy training.

Data literacy disadvantages?

Rest assured, data literacy training is always an advantage. A lack of resources could force an organisation to deprioritize data literacy, but that doesn’t make data literacy a disadvantage. If someone sees a data literacy programme as a waste of resources, they’ve failed to recognise the overwhelming benefits of a data-literate workforce.

In the wake of the Great Resignation (or Great Reshuffle), many employers are wary about turnover. Some leaders may wonder if investment in data literacy has disadvantages. Is upskilling employees going to encourage them to leave?

This isn’t a question that should keep HR managers up at night, because data literacy is without doubt an advantage for businesses. Employee training is a recognised retention strategy, especially when it’s framed as a career-long employee development programme. In particular, data literacy can increase job satisfaction and retention. So make data literacy training part of your employer brand. If data-literate employees do move on to other employment, they’ll only improve your reputation as a great employer.

Try these tips and tricks to keep data-literate employees engaged by applying their data literacy skills:

• Provide continuous, relevant training opportunities that frame data literacy training as an ongoing process.
• Develop mentorship opportunities that pair highly skilled employees with those who want to build data literacy skills.
• Encourage employees to present informal peer training sessions, such as data literacy Lunch and Learns like “What is an algorithm, anyway?” or “Data science basics for aspiring business leaders.”
• Establish professional reading circles as a space for employees to apply their data literacy skills by discussing data in the context of industry news and white papers.

Using these strategies to keep data-literate employees engaged will bolster your data-driven culture.

Conclusion and further resources

There are endless advantages to growing your data literacy skills — and there is no disadvantage to investing in data literacy skills training.

But data literacy isn’t a single skill set that can be learnt at once. From students to professionals to managers, everyone should plan to continue developing data literacy skills throughout their career. If you’re a student, a parent, or an educator, learn more in our article about the benefits of data literacy in education.

Companies have an opportunity to lean into data literacy skills to improve job satisfaction and return business value. Read more about developing and applying data literacy in businesses.

If you intend to prioritise data literacy at your organisation, you’ll need to give decision-makers and business users access to enterprise data and data analytics tools. That means investing in modern data management.

If your organisation is ready to take advantage of the benefits of data literacy, Talend can help. Reach out to a Talend expert today at Talend.com/contact-sales.