Everything You Need to Know About HR Analytics

Deloitte’s 2017 Global Human Capital Trends report found that 71% of companies rate people analytics as a high priority in their organizations. But what’s driving this trend toward people analytics? And, on a broader scale, what exactly is HR analytics?

SEE ALSO: How to Effectively Change Performance Management

Human resource analytics is the process of gathering and analyzing data regarding human capital, then using those insights to make data-driven HR decisions.

The goal is to improve employee performance, attract and retain higher-quality talent, improve processes, and boost HR’s impact on business outcomes. If leveraged correctly, analytics should position human resources as a vital partner in the organization’s mission, thereby delivering a higher ROI for HR initiatives.

Common data points used by HR analysts include employee databases, performance reviews and feedback, salary and work history, attendance records, surveys, and demographic data. Once this information is processed, analytics tools produce reports and data visualizations that can inform decision-making.

People analytics and talent analytics are sometimes used interchangeably, but they really fall under the umbrella of HR analytics, with a more specific focus on an organization’s people and their behavior.

Applications

Deloitte found that recruiting is the number one area where HR analytics is being applied, followed by performance measurement, compensation, workforce planning, and retention.

Let’s look at analytics in recruiting. The objective obviously is to find and hire the best talent. The data-gathering should start within your company—by examining the attributes of your current strongest employees. Identifying trends and common traits can help recruiters focus their search for new talent. Maybe the data leads them to certain colleges or cities. Or it could highlight the websites that furnish the highest percentage of quality candidates or help recruiters craft messaging that will reach the desired candidates. Using this data, recruiters can ideally deliver a higher ROI for each new hire.

Recruiting is the number one area where HR analytics is being applied. Click To Tweet

If an organization wants to increase employee retention, HR analysts could look at churn rates, turnover within each department, attributes of longer-tenured employees against those who left the organization within 1-2 years, and the onboarding process for different employee groups.

The data could help HR leaders pinpoint why employees are leaving and provide actionable steps to keep those people in-house. Maybe the problem is a manager, maybe the new onboarding process isn’t effective, or maybe the commute is too long for employees who live beyond a certain distance.

HR analytics is a relatively new field that will continue to evolve in the years to come. But the sooner an organization can integrate analytics tools into their HR processes, the sooner they’ll have a leg up on the competition.

DOWNLOAD FREE E-BOOK: How Google Manages Goal Setting and Performance Management

Strengthen your whole team with
Real-Time Feedback

Get Started Today