Human Resource Analytics – Next Big Thing in the Analytics World

Human resource analytics, training & development and employee engagement have become the major human capital trends of 2016. The key aspect of HR analytics is to conclusively show the impact the HR department has on the organization as a whole. HR analytics is all about establishing a cause-and-effect relationship between what the HR does and business outcomes – and then creating strategies based on that information.

Lot of data on employee’s personal information, compensation & benefits plan, performance, succession planning, retirements, attrition, is collected by the HR. HR Analytics helps the organisation to have  systematic record of all these data and therefore making it very important to use it properly. It is also used to prepare cost and investment report on the talent pool like cost per hire, cost per participation on training, revenue and expense per employee. It helps in providing opportunity for defining strategy for hire, plan and retention of employees. It plays a major role in giving a complete picture of an organization’s headcount based on demographics – age, gender, geographic, departments, qualifications etc. HR analytics helps the organisation in various processes such as:

  • Measuring resource utilization for improved business performance and forecasting workforce requirements
  • Managing applicants in a better way on basis of qualification for a specific position
  • Improving organizational performance through high quality talent related decisions
  • Optimizing talents through development and planning
  • Determining the individual’s KPIs on the business requirement
  • Recognizing the factors for employee satisfaction and productivity
  • Identifying the primary reasons for why high-value employees are leaving and attrition in general
  • Enabling HR to demonstrate its contribution to achieve corporate goals

Predictive Analytics is also being employed in HR by organizations worldwide to accelerate their progress in areas like recruitment, retaining talent, scheduling of workers etc. HR softwares like Kenexa, SAP and Workday has helped organizations have better access to organizational data. HR analytics has actually made HR more active when it comes to organisation’s planning and decision making. Applying HR analytics can help companies better analyze turnover, identify top performers in the organisation, conduct more effective succession planning, stay on top of certifications and training, and therefore ensure human talent resources are efficiently deployed and engaged. According to me, the major 4 matrices which can be used, under HR analytics, to analyze the core function, an HR department is entitled to, are as follows:

  1. Recruitment: Recruitment, internal movement and satisfaction effectiveness are few areas where HR analytics plays an important role. Examples include new hire ratio, net hire rate, new position recruitment rate, promotion rate etc
  2. Performance Management: HR Analytics also provides assistance in performance and career management. Examples include employee turnaround rate, peer review rate, self review rate, manager quality index etc
  3. Training & Development: Training & Educational development is yet another area which can employ analytics. Examples include average training class size, development program penetration rate, employee satisfaction with training etc
  4. Organisational Effectiveness: Organisational effectiveness can be achieved only when every data worked on is effectively analysed. Examples include human investment ratio, corporate expense rate, operating profit per full time employee, operating expense per full time employee etc

Please visit this presentation on SlideShare to read in much more detail about areas where analytics can be employed for HR.

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