Why HR Analytics Is Important

Human Resource (HR) analytics is the process of collecting and analyzing data related to the people in an organization, with the aim of improving their performance and well-being. HR analytics can also be called people analytics, workforce analytics, or talent analytics.

3 key reasons why HR analytics is important for organizations:

1. Make Informed Decisions

First, it can help your organization make data-driven decisions that are based on evidence rather than intuition or guesswork. How? With HR analytics, you can identify the factors that influence employee turnover, engagement, productivity, and satisfaction. By understanding these factors, you can design and implement effective interventions to retain and motivate your talent.

2. Measure the Impact of HR Policies

Second, HR analytics can help measure the impact of HR policies and practices on business outcomes. It can help you evaluate the return on investment (ROI) of learning and development programs, recruitment strategies, performance management systems, and employee benefits.

Ultimately, you’ll be able to quantify the value of HR initiatives, justify your spending, and allocate your company’s resources more efficiently.

3. Anticipating the Trends

And the third reason why HR analytics is important is it can help shape the future of work by anticipating and responding to emerging trends and challenges. HR analytics can forecast the demand and supply of skills, assess the readiness and adaptability of the workforce, and optimize the use of technology and automation.

By leveraging data and insights, your organization can stay ahead of the curve and gain a competitive edge in the market.

LEARN MORE: What is HR analytics?

Simple Steps to Follow

To get started with HR analytics, organizations need to follow some basic steps. These include:

• Define the business problem or question that needs to be answered
• Identify the data sources and metrics that are relevant to the problem or question
• Collect and clean the data to ensure its quality and validity
• Analyze the data using appropriate methods and tools
• Interpret and communicate the results and recommendations to stakeholders
• Implement and monitor the actions and outcomes

Keep in mind that HR analytics is not a one-time project but a continuous process that requires collaboration, experimentation, and learning. Organizations that embrace HR analytics can benefit from improved decision-making, enhanced performance, and increased agility. It is not only a tool for HR professionals but also a strategic partner for business leaders. This is why HR analytics is important to businesses across industries.

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Examples of HR Analytics Skills

There are many skill sets in the market that can help organizations with their HR analytics needs. Some of these skills are:

• R: It is a programming language that is widely used for statistical analysis and visualization. It can handle large data sets and has a rich library of packages that enable various types of analyses and visualizations.
• Python: Another programming language that can be used for data analysis. It is easier to learn than R but offers slightly fewer functionalities. It also has a large number of packages that support data analysis.
• Excel: Spreadsheet software that is commonly used for basic data analysis. It can perform calculations, create charts, and apply filters. However, it has limitations in terms of data size, complexity, and automation.
• Power BI: A business intelligence tool that allows users to create interactive dashboards and reports from various data sources. It has a user-friendly interface and supports data visualization, exploration, and sharing.
• Tableau: Another business intelligence tool that specializes in data visualization. It enables users to create stunning charts and graphs from different types of data. It also supports data blending, filtering, and storytelling.
• Visier: A cloud-based HR analytics platform that integrates data from multiple sources and provides ready-made dashboards and reports on various HR topics such as workforce planning, talent acquisition, diversity and inclusion, employee engagement, retention, performance, learning, compensation, etc.
• Crunchr: A cloud-based HR analytics platform that consolidates data from different HR systems into one place. It offers pre-built dashboards as well as customizable ones on various HR topics such as workforce planning, talent management, employee experience, etc.
• Qualtrics: A survey software that helps organizations collect feedback from employees on various aspects such as engagement, satisfaction, well-being, culture, etc. It also provides analytics tools to analyze the survey results and generate insights.

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The Importance of HR Analytics Application in the Workplace

HR analytics can be applied to various areas in the workplace to improve HR processes and outcomes. Some of these areas are:

• Hiring: HR analytics can help organizations hire the right talent by using competency acquisition analytics, recruitment channel analytics, and classification analysis. These methods can help identify the skills and attributes that are required for different roles, evaluate the effectiveness of different sources of candidates, and predict the success rate of teams based on their composition.
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• Attrition: HR analytics can also help reduce employee turnover by using attrition analysis. This method can help identify the factors that influence employee retention, such as job satisfaction, engagement, performance, compensation, etc. It can also help segment employees into different risk groups and design targeted interventions to retain them
• Training: With HR analytics, organizations can personalize training programs for employees by using learning analytics. This method can help assess the learning needs and preferences of employees, customize the content and delivery of training courses, and measure the impact of training on employee performance and behavior
• Capacity: Companies can optimize their workforce capacity and utilization by using capacity analytics. They will be able to forecast the demand and supply of labor, allocate resources based on skills and availability, and monitor the utilization and productivity of employees
• Performance: By using performance analytics, organizations can improve employee performance. This can also help set and track performance goals, provide feedback and coaching, and reward and recognize employees based on their achievements
• Anomaly: HR analytics can help businesses detect and prevent anomalies in HR data by using anomaly detection analysis. They can identify outliers, errors, frauds, or irregularities in HR data that may indicate potential problems or risks

Real-Life Examples

There are many real-life examples of successful HR analytics implementations that have delivered business value. Here are some of them:

• Credit Suisse: The bank used an algorithm to predict who might quit the company and why. They also trained special managers to retain high-performing employees who had a high flight risk. This program saved Credit Suisse approximately $70 million a year.
• Best Buy: The retailer used HR analytics to relate employee engagement with store income. They found that a 0.1% increase in engagement resulted in over $100,000 in annual operating income per store. This motivated Best Buy to make employee engagement surveys quarterly rather than annually.
• Experian: The credit reporting agency used HR analytics to get ahead of employee attrition. They used a combination of internal and external data to segment employees into different risk groups and design targeted retention strategies. They also created a dashboard to monitor attrition trends and drivers.
• E.ON: The energy company used HR analytics to tackle employee absence. They analyzed the patterns and causes of absence and identified the factors that influenced it, such as workload, stress, health, etc. They also created a predictive model to identify employees who were at risk of long-term absence and intervene early.

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An HR Analytics Tool That Elevates Your Hiring

Manatal brings automation to the hiring process while ensuring that you are landing the right talent on open roles, but it also comes with a Reports & Analytics feature that reveals all of the key metrics in the process.

Manatal’s candidate report provides users with access to candidates' data by source, from by their team, career page, and employee referrals, to by recruitment. Users can also track the number of candidates sorted by different types of channels over time.

Moreover, Manatal’s comprehensive hiring report provides full visibility of the total number of hires made over a given period of time. You can go see the number of matches and added resumes in specific recruitment projects.

Plus, Manatal comes with the Recruitment CRM (Customer Relationship Management) feature that streamlines the sales pipeline from end to end and its sales report will show you the sales performance throughout the CRM funnel, based on your client pipeline stages.

All of these insightful reports will help you anticipate the coming trends and prepare a stronger hiring strategy.

LEARN MORE: Manatal’s Reports & Analytics feature

In Conclusion

HR analytics is a powerful tool that can help organizations improve their HR processes and outcomes. By collecting and analyzing data related to the people in an organization, HR analytics can help make data-driven decisions, measure the impact of HR initiatives, and shape the future of work. These are just some of the key reasons why HR analytics is important. There are many examples of successful HR analytics implementations that have delivered business value in various areas such as hiring, attrition, training, capacity, performance, and anomaly detection.

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