It’s referred to by many names: HR analytics, workforce analytics, talent analytics and people analytics (albeit they’re not exactly the same). HR analytics is about analysing an organisation’s people problems,  using data to answer crucial questions about an organisation.

Data is important because it helps HR professionals  answer these questions:

• Which employees will be the most likely to leave your company within a year?
• How high is your organisations annual employee turnover?
• Has your employee annual turnover increased or decreased since last year?
• What quantity of your employee turnover consists of regretted loss?

Most HR departments would be able to identify their annual turnover quite easily by using  data from Performance Management and Human Resources Information systems. However, it would be harder to answer the remaining questions without extensive data and analysation - hence the need for HR analytics.

HR Analytics 101

Many departments in of an organisations focus on being able to measure their activities. This is visible in finance, operations, marketing, and sales to name a few.  Traditionally, measuring results isn’t something associated with HR.

HR departments are not new to collecting data - in fact they collect vast amounts. The issue is this data often remains unused. Until now.

So what is HR analytics?

HR analytics is when an organisation starts to use the data they’ve gathered to examine their employee and HR issues. When data is used for this purpose it is HR analytics.

Why the confusion?

There is still a lot of confusion surrounding what HR analytics is because it’s relatively new to the limelight. This is because for most of the 2000s, HR was used solely for strategic purposes,whereas now it’s also being used to improve other areas of business too.

However, as a hot HR trend, many people want to know what it is and how it can benefit them. HR Analytics helps HR professionals to make decisions based on data, thus increasing efficiency and cementing HR policies.

What’s the fuss about?

HR analytics is revolutionising HR by enabling professionals to:

• Make better, data-driven decisions
• Analyse the effectiveness of HR interventions
• Set up a business case for HR interventions
• Move from an operational focus (prioritising cost saving), to a to a tactical , or even strategic focus maximising business results.

Trying to fit into a data driven economy

For a long time, HR departments have reported employee data. However, in order to maximise business results we must add strategic value, therefore collecting employee data alone wouldn’t cut it.

To ensure that strategic value is added, you need to consider various characteristics such as:

• Demographics
• Pay
• Engagement
• Performance
• Applicant Tracking Systems

These characteristics are  exported from existing systems and factored  into one system. Data is then analysed to examine any consistent patterns: Through analysing  patterns and causal relations, predictive models can be built to help develop a data driven decision making process.

Ask the right questions

To get the most out of HR analytics, the right questions will need to be asked. This will help you to narrow down your data selection to collect more suitable data. You would then need to clean the data to make sure it is accurate and applicable. From there on out you can analyse the data to determine actionable insights.

Need more help?

Ultimately, HR analytics are the future, this is why our next addition in the HR Analytics trilogy will focus on People Analytics and how to get started with it.