HR of yesteryears was dependent on instinct and intuition but today modern HR specialists see the benefits of using people analytics in making better decisions. Infact analytics have given HR the much needed facelift from being regarded as soft and old fashioned.
People analytics is a method of analysis that helps managers make informed decisions about their workforce. Realtime employee data is used in order to arrive at several decisions regarding employees. Mick Collins, Global VP at SAPS defines people analytics as a methodology for creating insights on how investments on human capital assets contributes to the success for 4 principal outcomes:
- Generating revenue
- Reducing expenses
- Mitigating risks
- Executing strategic plans
This is done by applying statistical methods to integrated HR, talent management, financial and operational data.
How Can People Analytics Help The Business
People analytics can support the business needs of an organisation by providing better insight into learning and development, performance management and organisational decisions. If people analytics is used effectively, HR departments will be instrumental in improving employee development needs, staff morale and improving the ROI of the business.
The main advantages of using people analytics are
Today companies look for candidates who fit the culture of the company rather than someone talented and/or qualified. Candidates historical data offers much insight into which candidates fit the existing workforce culture.
People analytics help in identifying churn patterns using various machine learning algorithms. This helps HR in being proactive and taking the necessary steps.
- Improved Productivity
People analytics help in identifying the factors that drive productivity. They help in shaping HR strategy, which include training, performance management and other related HR policies.
Once the organisation has all the performance-related data for employees it becomes easy to structure the compensation packages.
- Employee Satisfaction
The people analytics tools help to gather information using feedback forms, surveys, interviews, performance reviews, customer feedback and so on to make more informed HR decisions.
What Does HR Analytics Do For The Company
The analytics can provide timely records, data and statistics that could help in investigating, reporting and further understanding human capital.
- HR Analytics Help to Minimise Human Error
Reports generated by HR analytics is a better option compared to manually encoded reports using basic database software.
- Spares More Time for Analysis
Less time spent gathering the information would automatically mean that more time is available for analysis of the data so generated. With a HR analytics program, all dashboard, monthly and daily reports can be generated instantly as an unified common source of data.
- Provides a Macro Level View of HR
The top management can easily monitor all kinds of data such as salary, general expenses, administrative expenses with HR analytics option.
- Helps in Anticipating Risks
HR analytical software provides a kind of a warning system for the management regarding any issues that require immediate action. Any alarming figures can pinpoint the exact problem area accurately such as a higher attrition rate compared to the previous year or a dip in the job satisfaction of the workforce.
- HR Analytics Improves Productivity
HR analytics reduces the burden on employees by way of reducing time spent on gathering and processing such information manually. Employees will definitely perform better if they feel their time is being used well.
Common Data Sources For HR Analytics
Common data sources for HR analytics include the following areas:
- Internal Data such as
- Demographic Employee Data
- Payroll Data
- Social Network Data
- Performance Data
- Engagement Data
- External Data such as
- Labour Market Data
- Population Data
Implementing A Successful People Analytics Strategy
The following 4 steps will help in the implementation of workforce analytics in the HR function.
- Encourage Data Driven Decisions
Building a company culture that encourages data based decision is of paramount importance.HR leaders must encourage innovation among the workforce and emphasize ongoing learning and knowledge. This will shift the company culture from being instinct based to a data based decision making one.
- Identify Areas With Issues that Data Must Address
Taking an objective look at the challenging areas in any organisations will be the first step towards the adoption of a data driven process. Determining the metrics and then gathering specific data will be the way forward.
- Data Collection
This step will involve opting the software for data collection, one that is most suitable for the organisation in question. Several choices are available in the market today and a bit of research will yield the right one. The software should ensure that data can be gathered consistently, identify patterns and generate actionable HR data analytics.
- Data Driven Decisions
Once the data is collected and analysed, identify the outcome from those readings. Based on the analysis, informed decisions can be made based on the pain areas within the organisation. Once the course of action is identified not only is Implementation important, so is tracking the same in order to understand that the solution is in line with the data present.
In the coming years, the main differentiator between successful organisations and the not so successful ones will be the management of talent. As the value of data continues to increase, the opportunity for HR to leverage this data will become better and bigger. It will also help HR to align its strategies with the business goals of the company and to quantify the value it adds to business.
Predictive analytics takes about 24 months to show meaningful results but the time to begin is absolutely now.