The What, How and Why of Human Resource Analytics
Human Resources Analytics, also known as HR analytics, is used to gain insights from data to contribute to your company’s core values, goals and mission. It uses a data-driven approach to work on employee performance, talent management and workforce analytics.
Human resources has undergone tremendous changes in promoting sustainable business and employee practices in the last decade or so. For some reason, their work is generally regarded as unimportant, and the management has no way of quantifying and measuring their success.
Human Resources Analytics, also known as HR analytics, is used to gain insights into a team and evaluate it to contribute to your company’s core values, goals and mission. Using HR analytics, professionals use a data-driven approach to work on employee performance, talent management and workforce analytics.
Once we calculate the appropriate hiring costs, identify employee turnover patterns and invest in our employees, we can determine critical insights that would automatically reduce HR-oriented expenses.
What is HR analytics?
In simple terms, Human Resource Analytics (HR Analytics) analyzes the company’s employees to improve employee retention and performance. It also evaluates the impact of HR initiatives on the company’s strategies, enhances talent management performance and generates actionable insights at the workplace.
As a result, they improve company revenue, mitigate risk, execute strategies and minimize expenses by using statistics to analyze financial, operational HR and talent management data.
How is HR analytics connected to workforce and people analytics?
This analytics deals with HR function metrics, such as training expenses per employee, time to hire and promotion.
- People analytics
Even though often interchanged with HR analytics, people refer to the employees and customers working with the organization. Also called talent analytics, it consolidates data from different management and executive heads to help them make data-driven and informed decisions regarding their talent management processes. They are also used to make strategic talent decisions, such as rating systems, talent satisfaction monitoring and hiring statistics.
- Workforce analytics
Solely concerned with the employees in an organization, workforce analytics focuses on employee performance and productivity to boost employee experience retention rates. The employment force includes gig workers, on-site employees, remote employees, consultants and freelancers. The standard metrics used are part-time employees, internal mobility and gender ratio.
What are the benefits of HR analytics?
Human resource analytics enhance employee and customer experience, which maximizes sales, improves performance and experience, and boosts outcomes. HR professionals are now expected to draw valuable insights and analyze data to help the organization reach its goals.
- Boosts employee efficiency and performance
Organizations measure their success by tracking performance and efficiency, which can be done by offering work-life balance and flexible schedules. HR analytics tracks training costs, overtime, absenteeism, employee productivity and much more. By retaining engaged and satisfied workers, the company will enjoy lower business costs. Recruiting itself will become more proactive, to render a competitive advantage and increase brand image and value.
- Speed up recruitment processes
Recruiting is a cost and time-intensive business, and analytics in HR helps determine who could fit in with the company culture. Choose candidates who fit the features described in their job profile, highlighted in employee satisfaction surveys, annual reviews, team assessments and exit interviews. All of these can be equipped to save time, save costs and prepare impactful salary and benefits packages.
- Enhance talent processes
HR professionals know that talent processes go beyond pre-hiring, hiring and annual performance reviews. They also include counselling, training and recreational activities. HR data analytics identify challenges, monitor talent acquisition analytics, get employee feedback (such as current experience, benefits and possible changes) and work on the challenges.
- Improve productivity
Employee productivity lies on multiple factors such as work environment, office infrastructure, leadership and colleagues, salary and benefits and job satisfaction. Implement employee engagement strategies to analyze the same and note the results.
- Enhancing employee experience
Apart from checking applications to fill up open positions, HR professionals also run through the employee experience and implement suggestions for improvement. Happier employees are better engaged and promise higher retention, higher productivity and enjoy higher professional success. Metrics such as productivity, engagement and attendance are generally evaluated. Thus, the HR department understands its strengths and weaknesses regarding vacation policies, training and development and compensation.
- Gaining employees’ trust
Talk to employees, make them feel heard, record responses, suggest ideas and make a plan. Now that you have an armful of employee data and feedback, HR analytics helps realise what needs to stay and what needs to be improved. Making positive changes to workplace policies are noticed by the employees, gaining their trust. Use the data to remedy existing issues, drive initiatives and help the management make wise decisions. All of this builds employee retention, employee productivity, employee wellness, employee success and work culture.
What are the metrics used to gain HR analytics?
HR metrics influence business value, and a conversation between HR professionals and C-Suite employees determine the right strategy. These factors impact the key performance indicators (KPIs), such as employee positions, employment duration, skills, cause of leaving and replacement costs:
- Offer acceptance rate
Formal job offers reflect the talent acquisition strategy of a company in a given period.
- Training efficiency and expenses
Test scores, performance improvement, and promotion transitioning to analyze one employee’s training costs.
- Turnover rate
Calculated by dividing the number who voluntarily left the organisation by its total number of employees.
- Time to fill and time to hire
The number of days taken between a job advertisement and new hire and the hire’s time to accept the offer.
- Revenue per employee
This refers to the average income every employee generates.
It is calculated by dividing the number of missed days by the all-encompassing total of workdays.
- Human capital risk
Having significantly less qualified employees in leadership positions, relationships with managers, no succession plan and compensation.
What does the HR professional need?
In most cases, HR professionals need internal data, such as employee tenure, compensation, appraisal data, training records, reporting structure and possible disciplinary action.
External data can be achieved by establishing professional relationships with the other departments and data sourced through external means. These include passive employee data, company-specific data, historical data and financial data.
How does HR analytics work?
HR professionals who are interested in HR analytics must incorporate the following into their strategy:
- Prepare the organisation and teams for analytical-driven workflow.
- To know how HR analytics adds business value, choose smaller projects that offer a high impact quickly.
- Data scientists can evaluate the analytics solution, such as the predictions and statistical modelling.
- HR professionals collect data, which must comply with the laws, such as employees’ consent regarding the type and amount of data, aim of data collection, employee anonymity and privacy, IT security and location of data storage.
- The best HR analytics examples include easy accessibility, unified metrics, cloud-based operations, machine learning and statistical analysis technology, predictive analytics, subscription models and visualization technology.
As an HR professional, use the power of analytics to make strategic business decisions that contribute to company profits. If you are looking for expert HR analytics metrics to source the right candidates, please contact BetterPlace.
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