An introduction to HR analytics

1. An introduction to HR analytics

2. In general, most non-HR professionals have a limited view of the HR function. Some professionals think that it is limited to recruitment and employee engagement. HR Analytics can prove these professionals wrong. HR analytics can be used to provide valuable insights which can help improve the performance of any team. • What is HR Analytics? - HR Analytics can be defined as the methodology of applying statistical methods on human resource data to develop insights. The data can be used to increase revenue, reduce expenses, optimize efficiency and so on. The data used for HR analytics is not strictly data from the human resources function. It may be taken from talent management, operations and data from other functions of the firm.

4. Although these two terms are often used interchangeably, there is a slight difference between HR Analytics and People Analytics. HR Analytics refers to the metrics of the HR function specifically, such as optimizing training and hiring processes. Whereas People Analytics is mostly referring to HR Analytics only, it encompasses ‘people’ related to the organization in general. Hence it may also constitute customers. • Importance of HR Analytics - One way to think about HR analytics is to treat it as analogous to improving the customer experience. Just as an organization works to improve all aspects of the customer experience, it can use HR Analytics to improve the employee experience. This leads to direct improvement in employee engagement, performance and retention, which has direct business benefits.

5. The HR analytics strategy is developed by the top management in collaboration with senior HR managers. For instance, there are dozens of metrics that are developed by HR analytics, such as training cost per employee, time to hire, offer acceptance rate and so on. According to the priorities of the management, various strategies can be developed which focus on the HR metrics which are most important for business strategy. In fact, the senior HR managers can themselves analyse all relevant HR metrics and propose the high priority ones to the senior management. In this way the HR managers who possess the analytics skill set can rise from being middle managers to being part of the decision-making group in their organization.  • Some common metrics tracked by HR Analytics are: revenue per employee, job offer acceptance rate, training expense per employee, voluntary turnover rate and involuntary turnover rate (of employees leaving their jobs), time to fill, time to hire etc. These are some of the basic metrics which can give lots of insights to the HR department regarding the performance of their function, the workforce satisfaction, and other aspects of the organization.

6. Next steps of action – Once the organization or the senior HR management has determined that the HR analytics should be integrated, all relevant data regarding employees, from recruitment to departure and everything in between must be tracked and collected. Along with that, the organization must train its HR managers in HR analytics or hire HR analytics specialists. Finally, the HR analytics team must be supported by providing them access to analytics tools and dashboards, prompt data collection, a planned strategy of implementing HR analytics, and any other necessary support. • It should be noted that once the organization identifies the numerous advantages to implementing HR analytics in their processes, step by step integration of HR analytics can be done into the organization with actionable, measurable steps.