Frequently asked questions

Your questions answered

How is analytics used in HR?

Analytics are used in HR to reveal insights from data about the workforce that help define workforce experiences, plan HR strategy and support company goals. The discipline of analytics in HR is sometimes called People Science. It means applying data-driven approaches to improve workforce visibility—and how you both manage and engage your workforce. It’s about understanding people and their behavior in your company, and generating more actionable insights to help you make better business decisions about your workforce.

In the digital era, using HR and People technology and tools along with company performance data, organizations can collect and collate a huge amount of data relating to their people. The challenge is processing and creating meaningful, actionable insights from that data. HR and People teams are now embracing sophisticated analytics approaches to help them understand and engage with employees, just as marketing teams have been doing for years to shape customer experiences.

People Science and HR analytics are proven to support organizational performance. A Deloitte survey showed that organizations with highly evolved People Science practices typically delivered a substantially higher profit than organizations at the beginning of their HR analytics journey.

Here’s how HR and People teams use analytics effectively:

  • Establish a single source of truth – one data repository with all People and performance information, so the base data is reliable and trusted
  • Report on the data, showing how HR KPIs are contributing to business KPIs. For example, for a fast-growing company, the HR and People team might have a KPI relating to rapid and accurate talent acquisition, because this contributes to an overall business expansion KPI
  • Use data to predict future performance and highlight potential risks or opportunities. Looking back at historic performance can reveal trends in attrition, diversity or recruitment campaign success. Analyzing leading metrics can assess the likely impact of continuing trends in the future
  • Test hypotheses and predictions based on previous analyses to establish People insights that help shape strategy. This could mean modeling to understand what would happen if one or more metrics could be improved or changed

Some examples of basic HR metrics are:

  • Time to hire
  • Top and bottom performers
  • High potential employees
  • Skills gaps
  • Attrition levels
  • Flight risk

Accurate HR data is vital to an organization’s success. Find out how Sage People’s HR and People analytics software can help you make the right business decisions by providing a wealth of invaluable information and insights. Back to top