Data in HCM: An Introduction to HR Analytics

Data has been invaluable to firms in predicting customer trends, analyzing the impact of marketing on target audiences, and monitoring sales forecasts – so it’s hardly surprising that data analysis can be used to evaluate and predict trends in HR.

It’s not about reducing talented, valuable staff to data and numbers, but using analytical tools for important tasks including employee retention, staff training and development, and hiring and firing. Making the most of data that can be collated, and ensuring trends aren’t missed, can benefit both employers and employees. Insights into staff or candidate behavior not only helps companies to maintain the best workforce, but also shape HR policies in line with these behavioral insights.


Where is data useful in HR?

Useful data metrics in assessing recruitment can include ‘time to hire’, which measures how long the recruitment process takes (which in turn can be used to determine impact on company productivity and workforce engagement), and ‘quality of hire’, which measures the overall effectiveness of new employees. These metrics are important for planning new roles (or filling vacated ones) and ensuring the best candidates are found for the job.

Performance review
Using data to determine company strategy – and how staff competencies and development drives that strategy – adds another dimension to annual performance reviews. How does an individual’s progress contribute to company goals, and which new skills are the most beneficial to their job role?

Staff retention
Analytics can help in measuring an employee’s progress and value to a company – but it’s also useful in ensuring staff are supported in developing important competencies, while management, HR and other key cogs in the organization are working efficiently to ensure workforce optimization. By addressing issues or problems that might negatively affect an employee’s ability to perform, conflicts or even resignations could be avoided – and staff feels supported beyond the numbers and spreadsheets.

Key HR metrics can also be used to ensure a workforce is adequately equipped to face predicted challenges or busy periods. Tracking the staff – and productive hours available – against a schedule of work and company goals can prevent departments being left short for crucial periods, and can also determine when additional hiring – or alternatively, reduction in staffing levels – can be beneficial.

Employee engagement
Measuring the impact and success of human resource strategies is important to ensure maximum staff productivity, wellness and engagement with a company’s goals. Taking the time to analyze the data that comes from staff feedback surveys, productivity reports, the effectiveness of HR policy implementation and staff turnover can shape future policies and steer HR management in a direction that reflects the behavioral insights which the data provides.

While the use of HR metrics and data analytics can appear intimidating to a company exploring data for the first time, the insights it can provide are invaluable when addressing workforce behavioral trends, the cost of human capital and the progress being made towards company goals. Taking the time to explore which data and individual metrics can be employed across departments, projects or company strategies can help shape forward-planning and more accurately measure performance against forecasted productivity and growth.

Data analytics doesn’t mean reducing your valued staff to simply numbers, but analyzing how employee progress and competencies can be integrated with wider company strategies to ensure management structures are providing staff with the tools to deliver optimized performance.


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