What is HR Analytics? A Guide

You’re asked to identify and deploy data-driven HR practices, but you aren’t exactly sure where to start. You might have some HR data stored in spreadsheets, filing cabinets, and various systems but aren’t sure what to do with it or how to make the data-driven decisions you’ve been asked to make. How can you use the data you have to help your leaders transform the organization?

The answer is through HR analytics. What is HR analytics, and how does it help you make the most of data? Keep reading to find out.

What is HR analytics?

HR analytics, sometimes referred to as people analytics, talent analytics, or workforce analytics, collects, analyzes, and uses employee data to inform and transform HR decisions. 

HR analytics allows an organization to make data-driven decisions based on various types of HR data collected. Some examples of HR data that the HR team might gather as part of their analytics include headcount, compensation, work location, onboarding details, turnover rates, employee engagement, learning and development opportunities, and more. 

In the same way that marketers gather data about their target customers to plan campaigns and marketing efforts, HR collects data about their employees or candidates. HR teams can use HR data analytics to better understand an organization’s workforce and better plan for the business’s future success. 

Why use data in HR?

Data might not seem like part of the puzzle when it comes to HR, but that couldn’t be further from the truth. When gathered and used in a meaningful way, HR departments have an opportunity to reap a variety of benefits from HR data. Here are some of the advantages of gathering and using HR data:

  • You can unlock powerful insights about the employee journey. HR data can provide solid insights about your company. You can gather data on the experience as a candidate pre-hire, how candidates move through recruitment and hiring stages to become employees, and how employees experience and perceive the company culture over time. Data in these areas helps identify areas of opportunity based upon actual feedback (as opposed to guesses or assumptions) for more significant change.
  • You can better forecast resource needs. HR teams and employers can use HR data to predict and forecast hiring and resourcing needs. Managing recruiting and hiring can also reduce employee burnout from heavy workloads, leading to higher retention rates. It’s a win-win for everybody when you use data to grasp who you need to hire and when to do so to maintain steady streams of productivity.
  • You can make HR processes more efficient and effective. Gathering data on HR processes can help you spot ways to make things more efficient that may have otherwise gone unnoticed. These improvements will not only benefit future employees who walk through these processes, but HR will also save time and energy spent on these projects.

Challenges of HR analytics

Gathering data when implementing HR analytics comes with its own unique set of obstacles, as evidenced by some of the most common challenges HR professionals experience when starting to collect HR data:

  • Data can come from many different (and potentially inconsistent) sources. No matter what specific types of analytics you focus on, you’ll likely need to pull data from various departments and tools within your organization. For example, you may need to gather compensation and payroll data from finance. When collecting data sets from different departments, it can be tricky to consolidate and unify them in one centralized place. Some data sets may not align with others depending on each department’s process for gathering and maintaining their own information.
  • Privacy and compliance can lead to murky waters. HR professionals aren’t strangers to working with sensitive information, but abiding by privacy and compliance laws can get complicated if you have to bring in other departments (like IT, for example) for technological assistance when working with sensitive data. Not only that, but HR always has to pay attention to protected characteristics and types of data from candidates or employees that can’t be stored or used.
  • HR professionals may not have a data analytics background or the skills needed to run with the HR analytics strategy. Generally speaking, analytical and quantitative classes aren’t a part of formal HR education programs. HR professionals dabble in the “human” side of things, not the numbers, right? The problem is that HR analytics expands beyond high-level data sets, creating a steep learning curve for those who aren’t data proficient.
  • Some argue that HR analytics takes the “human” out of human resources. HR analytics and gathering data can allow you and your teams to make better informed and data-driven decisions, but don’t forget that HR is ultimately about human beings. It’s important to understand that data can work alongside the human elements that make HR beneficial to an organization. 

Examples of HR analytics in action

The use of HR analytics has grown in recent years, and companies across the globe are now using HR analytics to achieve big goals. If you’re unsure how HR data and analytics can help your organization, read through these real-life examples of HR analytics in action.

Google

People analytics has a significant impact on major corporations like Google. Google began to think seriously about using HR analytics in 2006 to support its People Operations organization. In a project known as Project Oxygen, Google set out to better understand and define the role of managers within their organization. Using observations and data from performance reviews, productivity metrics, and double-blind interviews, Google identified eight behaviors exhibited by the company’s best managers.

European telecom company

McKinsey & Company helped a major telecom company develop a talent and leadership strategy to drive their recruiting efforts. After identifying key findings such as a shortage of leaders and doubts about the HR team’s credibility, McKinsey & Company helped the organization lay out a strategy based on the data findings. Ultimately, recruiting time for the telecom company was cut in half. Once the three-year plan concluded, the company’s talent pipeline was strong enough to fuel company growth for the next five years.

How to implement HR analytics

Are you ready to implement an HR analytics strategy at your organization? There are a few tips to keep in mind as you get started. 

1. Identify a business problem that needs to be solved

What are you trying to solve for? Perhaps your organization wants to boost its retention numbers or reduce onboarding time for new hires. Choose one business problem to start with and focus on only one at a time. If it makes sense for you and your team, you can create a complete list of business problems to solve and prioritize them for future reference.

2. Identify relevant data you’ll need to get started and where you can locate it

You’re going to need a centralized hub to unify and store all of your data. Start by identifying what data you need, where it’s being collected throughout the company, and how to gather and consolidate it. This step will likely take you some time, but it’s sure to pay off in the end. 

3. Find a mix of analytical tools that work best for you and your team

HR professionals aren’t necessarily trained in analytics, and that’s okay. You’ll need to develop your team’s analytical capabilities through training and development, and then you should choose tools that make sense for your team to use. Keep in mind that you don’t have to select the fanciest, most complicated analytical tools to help you achieve your desired results.

4. Analyze and transform your data

Conduct data analysis and be prepared for insights that will help transform the data and your organization. This is where various methodologies, data models, and hypotheses come into play. With these key findings and insights, you should determine recommendations to help your business improve and solve the business problem you identified at the start of the process. Communicate your recommendations clearly to the key stakeholders and decision-makers.

5. Implement data-driven changes and evaluate their success

Once you’ve communicated your data-driven recommendations to the organization’s key stakeholders, you’ll need to identify what changes are agreed upon and implement them. Test your hypotheses, start preparing your organization for changes, and then put a plan in place to monitor the success of those shifts.

How to use Wrike as your HR analytics software

You’ll need a tool to help you organize and analyze your HR data, and Wrike is a great option to use as your HR analytics software. Here are just a few of the features that make Wrike the perfect software option for you and your team:

Are you ready to put your HR data to work? Sign up for a free trial of Wrike today.

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