Introduction
Human Resources is a critical department of every organization, which non-arguably plays the most important role in driving business success. It majorly involves recruiting, selecting, training, and managing employees to ensure that the organization achieves its objectives; however, in recent years, the use of data analytics in HR has become immensely popular.
Areas that were previously used to determine solely through human feedback and review, including promotions, salary rates, turnover and retention, and training and development, have now evolved and become entirely data-driven decisions that are informed by artificial intelligence-powered analytics.
A key differentiator of these data analytics is that they can be gathered and analyzed in real-time to help support current decisions. In this guide, we will explore the world of data analytics from an HR point of view, which will help you discover positive ways it can influence your organization and how to implement it within your current business strategy.
The Ultimate Guide to Integrate Data Analytics in HR
Analytics and data have revolutionized the way Human Resources operates. With the help of high-end technologies, HR departments can now gather and analyze large amounts of data to make informed decisions. The use of analytics in HR has become increasingly popular because it helps organizations identify areas of improvement and make data-driven decisions accordingly. Almost all of the recent HR certifications & courses have a dedicated module about HR Analytics. In fact, some of the popular institutes like HRAcademia or HRCI have also introduced stand-alone certification in HR Analytics. This shows the understanding of large-scale data management in the human resources field.
What is HR Data Analytics?
The term HR data analytics also referred to as people analytics, means gathering data on an organization’s workforce based on certain predetermined HR metrics. The information extracted from this data can be used to improve that organization overall. For example, HR data analytics is commonly used to gain insight into metrics like employee engagement and retention which can help you determine which policies most positively influence employees.
Who is Responsible for HR Data Analytics?
Handling HR data analytics can vary from organization to organization. Some might have HR representatives solely focused on gathering the data and extracting results from it, while others might divide their HR teams to analyze assigned sections of the workforce. Third-party analysts are also a commonly used option for organizations that have a large workforce.
Four Levels of HR Analytics
There are four levels of HR analytics, which are as follows:
Descriptive
The Descriptive level is simply a surface-level observation of what is going on within an organization or a particular department. Descriptive analytics helps HR professionals build an initial case or give insight into a potential issue which further shows how HR data analytics can help solve it.
Diagnostic
The Diagnostic level starts to dig into why an issue is occurring. This level offers context and understanding of why the observations that are made within the descriptive level are happening.
Predictive
The Predictive level makes an educated assumption that something may occur and takes steps to prevent it before it does. This might not be as common as descriptive and diagnostic levels, but some organizations prefer to adopt this model to stop issues before they can even start.
Prescriptive
The Prescriptive level develops and deploys a solution and is built upon descriptive, diagnostic, and predictive levels. In the case of using HR data analytics, the collected information is used to identify, guide, and implement the proposed solution.
Benefits of HR Data Analytics
Here are a few benefits of using HR data analytics:
Enhances Hiring Practices
Hiring the right candidate can be quite tough, however, this process can be improved with the help of HR data analytics. You can collect data from previous hiring sessions and implement these insights for future ones, this helps in determining how successful your company is at acquiring optimal employees with the help of monitoring metrics such as time to fill, costs in the hiring process, etc.
Improves Employee Experience and Performance
By analyzing metrics such as the absenteeism rate, overtime hours, training costs, and employee productivity, organizations have the chance to improve the overall employee experience, stimulate productivity, and reduce business costs. By keeping your employees engaged and satisfied, your organization can benefit from it, which will ultimately create a better working environment and improve organizational culture.
Reduce Employee Turnover
By using HR data analytics, you can keep your employees satisfied and can also significantly reduce turnover rates. Since employee retention is becoming difficult every day, you can use HR data to your advantage and take a deeper look into common reasons for turnover and find appropriate solutions to reduce these numbers. By looking into individual employee performance, you can also ensure to keep them satisfied by tailoring your strategies effectively.
Automate Tasks
By integrating modern technology into everyday life, HR professionals can optimize their repetitive tasks and eliminate the workload that was done manually. In today’s time, HR professionals don’t deal with manual calculations or exporting multiple files, the information is updated automatically and the only thing they need to do is to optimize the report schedule. Automation is a huge benefit and HR departments must adopt it as soon as possible to save time.
Generate Predictions
In recent years, predictive technologies have become a critical element when it comes to extracting the maximum potential out of your analysis efforts, and the HR department is no exception. Typically, predictive methods use historical and current data to identify patterns, and with the help of that, HR professionals generate accurate forecasts about future developments. In HR, it can be used to forecast the performance of critical processes related to employee management.
Visualize Data
Most HR professionals are part of Human Resources because of the human aspect of the industry, and they don’t want to focus on pure numbers. However, due to data visualization, each variable in HR analytics can be easily visualized and interacted with. Online data visualization ensures access from anywhere and at any time, enabling professionals to access their data on the go.
Share Insights Across the Board
With the introduction of automated reports, sharing a simple URL that gives you access to the report or dashboard or assigning external viewers access to selected areas has enabled professionals to enhance their communication with real-time data. Its main benefit is that it is easily sharable across multiple devices, such as mobile, tablet, desktop computer, or laptop. Searching for the right information at the right time can be easily optimized by sharing visual examples and directly answering questions with the help of modern visualizations.
Centralized View of HR Data
Outdated means of analysis require a lot of manual work, making the decision-making process less accurate and more time-consuming. However, with modern tools, you can visualize all relevant information in one unique location, without performing heavy manual work or using various static reports.
How HR Data Analytics Can Influence Decisions
As long as you have the right tools that are needed to correctly interpret the collected data, HR data analytics can influence your organization from top to bottom. The areas where your organization can be affected by data analytics are:
Employee Recruitment and Onboarding
HR data analytics can help HR professionals even before they meet their employees in person. Your organization can collect data on new employees and identify the methods, hiring channels, and offerings that attract the highest-quality candidates. Since the cost of onboarding new hires is generally quantifiable, therefore, you can determine the actual cost of the process, and fit the process into your budget.
Payroll
Analytics can also help you with a wide range of payroll expenses, overtime costs, and other non-salary compensation that can help you adjust what employees are paid across departments. You could change policies to better manage labor costs and equalize pay within your organization using this information.
Benefits
An HR data analytics report can tell whether the benefits you offer effectively meet employee needs or not. These results provide you with insights into what your employees want in their benefits package. This can also reveal what you should consider including to improve employee satisfaction and retention rates and what you can safely remove from your benefits package as it harms no one.
Training and Development
This data can show the success of initiatives used to invest in your employees, particularly professional development programs and specialized training. You can use this information to offer these courses to more employees, expand what you offer, or explore more alternative options that are effective. Furthermore, analysis can also show where skill development is most needed in your organization, and with the help of those results, you can adapt your new training and development programs to those needs.
Employee Engagement
HR data analytics can also look at employee engagement throughout the company and identify what contributes to lower or higher levels, such as between departments. This information lets you modify your company policies to engage as many of your employees as possible.
Key Takeaways
The impact of data analytics in HR is far to be overstated. With the implementation of the right tools and strategies, HR departments can leverage data to make better decisions, improve productivity, and drive business success!
