People Analytics – Why HR Analytics is Important?

HR Analytics

Also known as people analytics. Is the use of people-data in analytical processes to solve business problems in the hope of improving employee performance and therefore getting a better return on investment.. HR analytics uses both people-data, collected by HR systems such as payroll, absence management and business information e.g operations performance data.

HR analytics  is about analyzing an organizations’ people problems. For example, can you answer the following questions about your organization? How high is your annual employee turnover?. How much of your employee turnover consists of regretted loss?. Do you know which employees will be the most likely to leave your company within a year?

HR analytics does not just deal with gathering data on employee efficiency. Instead, it aims to provide insight into each process by gathering data and then using it to make relevant decisions about how to improve these processes.

The Scientific Definition of HR Analytics

It is the systematic identification and quantification of the people drivers of business outcomes. “Heuvel & Bondarouk, 2016”. In other words, it is a data-driven approach towards HR. Furthermore, analytics helps to test the effectiveness of HR policies and different interventions.

Core Functions Of HR Analytics

Functions that can be enhanced by applying processes in analytics. These are acquisition, optimization, paying and developing the workforce of the organization. HR analytics can help to dig into problems and issues surrounding these requirements, and using analytical workflow, guide the managers to answer questions and gain insights from information at hand, then make relevant decisions and take appropriate actions. It provides an overview of the quantitative and qualitative forms of HR data, including the cause and effect relationships between data sets.

How HR analytics helps Human Resource Management

Like marketing analytics has changed the field of marketing,HR analytics is changing HR. It enables HR

  • make Better decision
  • Create Business case for HR intervention
  • Test the effectiveness
  • Move from an operational partner to tactical or even strategic partner
How does HR Analytics Shape the Business?

You can imagine that HR analytics holds an enormous value for an organization. These examples are only the beginning. Indeed, analytics enables companies to measure the business impact of people policies. By applying complex statistical analyses, HR acn predict the future of workforce. This enables managers to measure the financial impact of Human Resource practices.

Knowing the impact of HR policies will also help HR to become a strategic partner and get rid of its ‘soft’ image. It helps HR to aligh its strategy with business goals to quantify the value it adds to the business.

Custom-built Solutions

This is perhaps the first thing that comes to mind for large enterprises. You have the resources and you have the time. However, building a custom HR analytics solution ground up from scratch requires careful consideration:

  • Does your IT team have any experience building data and analytics solutions?
  • How important is customization to your business model?
  • Do you intend on having a full-time data team to support data-verification and sourcing?
  • How will you go about data-integration and system maintenance?
  • What is the total cost of ownership , that is;hardware, software, staff?
  • How do you ensure data security and privacy?
  • How frequently will major enhancement be implemented?
  • Who are the stakeholders and users of the application?

If you have the answer to all of the above questions, then, you can certainly consider building a custom analytics solution in-house.

Leave a Reply

Share This