What is HR Analytics?
HR analytics is a new “buzzword” in much forward-thinking, successful companies. In a nutshell, HR Analytics allows companies to use data and metrics in order to better understand their employees in the workspace, make changes where need be to better the organization. HR is now common in all the organizations; to monitor the employee performance and to evaluate in various aspects. There are many ways in which HR analytics can be used to drive decision-making within the company.
Create a survey database. HR analytics allows companies to run many different surveys simultaneously. This makes it possible to track the results over different periods of time, showcasing change, forecasting trends, and assisting in the decision-making process for organizations. Having a database also makes it possible to understand which surveys had a better response rate, as well as track responses and group sentiment. Draw Links by keeping a pulse on various metrics over time, in real time. These include people metrics such as employee performance, engagement, team consensus, and employee mobility.
By doing this, company metrics are tracked and compared and used to better your overall business objectives. These metrics include profitability, long-term retention, return on investment and much more. By combining the information about the employees with the company data, it is possible to understand the driving forces behind company performance. It also makes it possible for companies to benchmark the level of employee performance that is necessary to achieve key business objectives.
Typically there are 4 important objectives of HR Analytics:
1. Tracking company profitability.
2. Track changes over time
3. Team focused
4. Drive Skills training
1. Tracking company profitability:
There are many drivers that can affect an organization’s profitability. With HR analytics, it is possible to see not only where there were significant changes to profitability, but also the contributing factors that could cause these changes. In this way, it becomes possible to use this data and make actionable decisions for your workforce in positive ways.
Making actionable decisions for your workforce is made that much easier once you are able to understand root causes behind employee behavior. HR analytics ensures that data is front and center when companies are making important decisions such as budget splits for training, team building activities, and overall employee spend. By understanding where employees feel their skills or company experience is lacking, decisions can be made in a way that will best benefit the employees, as well as the company itself.
2. Track changes over time:
Understanding how employees’ data changes over time will assist in showcasing how successful (or not) programs have been within an organization. This can also become a precursor for predicting success, retention or turnover for employees. One of the biggest expenses a company undergoes is the recruitment and retention of employees. It is, therefore, crucial to be able to track and manage your workforce in order to ensure you are able to retain and promote top employees.
3. Become Team focused:
Certain HR analytics programs allow employees to be tracked within the teams they are operating in. The benefit of this is that you are able to ascertain which groups of people perform well together, as well as teams that might need some additional focus. In many cases, HR analytics is able to combine quantitative with qualitative data. This means we will not only be able to know which teams are underperforming but also why the team is underperforming. The “why” provided for by the qualitative data allows management teams to make informed decisions in order to quickly rectify any issues found within their operational teams.
4. Drive Skills training:
The data from HR analytics combines various different data points that can be used to make decisions regarding skills training. For example, by combining data from both the top and bottom performers, along with the contribution they each make to the profit margin, HR analytics showcases the return on investment that can be expected by investing in skills and training development for certain employees.
The list of benefits of HR analytics does not stop here. The overarching benefit provided by this form of analytics is the ability to combine people metrics with company performance metrics. In this way, HR analytics is able to use the multitude of data that is available and make sense of it in an actionable way that can benefit both the company and its employees.
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