Using Analytics in HR: What You Need to Know

Using Analytics in HR: What You Need to Know

This blog recently pointed out that the role HR professionals play in organizations is expanding. As company leaders increasingly recognize HR’s value, they’ve given professionals in the field more opportunities to make more important decisions.

That’s why analytics in HR are more important than ever before. Quite simply, in order to solve business problems, it’s often necessary to use statistical analysis to examine data. Analysis transforms raw data into valuable, actionable information that can reveal a problem, show you where you’re succeeding, or point to a solution.

For example, an HR manager might use data analytics to determine how to improve his or her organization’s new hire success rate. By analyzing past data, the manager could identify the factors that affect this rate. Perhaps the analysis would reveal that new hires are more likely to stay with the company for at least 90 days when they participate in at least two days of in-person orientation, rather than just one day of virtual onboarding via a computer.   

Clearly, prioritizing analytics is necessary and valuable. If you haven’t developed a process for applying analytics to your work yet, the following points will help you better understand how you can go about doing so.

Gather Your Data

You can’t analyze data that’s not readily available. The first step in embracing analytics is to gather your data in its many forms and put it in some kind of central repository. This data might include results from employee surveys, salary and promotion histories, employee attendance records, annual reviews, demographic data, or any kind of information collected during the recruitment, onboarding, and review processes.

Make no mistake: centralizing your data is a huge task, because it might exist in several different formats, such as Excel spreadsheets, disparate software programs, paper records, and maybe even information in emails or MS Word documents. You may discover gaps in your data, too. However, analytics will be much simpler in the future if your data is contained in one central digital location. You want your team to have easy access to your data, and you want the data in a format that allows for analysis of different variables.

client business research

Gain Insights

Again, analytics are valuable in HR because they give you deeper insights into your organization, allowing you to answer questions like: What is our average employee retention rate? What is the average number of applicants we receive for a posted job? What factors affect retention?

To illustrate this, think of a problem you may have casually noticed at your organization. Perhaps it seems as though employees aren’t as engaged as they were previously—you’re noticing more absences, lower productivity, employees not talking to one another, and other signs of disengagement. With analytics, you can more precisely measure employee engagement if you have data on turnover, vacation days used, and other information. This analysis can help you identify the departments that have engaged employees and those that do not.

Once you’ve conducted your analysis, it’s possible to examine how different variables have a positive impact on engagement. Doing so can help you develop an engagement strategy for departments that aren’t performing as well.

Invest in the Right Technology

You’re probably not a statistician, so you’re probably going to need HR analytics software to transform all that data you’ve collected into actionable insights. Fortunately, there are a plethora of options in this respect; companies like IBM, Infor, SAP, and Oracle all offer workforce analysis and people analytics solutions, in addition to their many other enterprise resource management products. Smaller companies that also offer excellent HR analytics solutions include Zoho, Crunchr, BizRun, TrenData, and many more. Research the best option for your organization.

Focus on Improvement

Don’t make the mistake of assuming your approach to data analysis will be perfect. Remember, this can be a complicated process. You need to review your approach frequently to better determine how to improve it.

For example, perhaps you’re using analytics to help create stronger employee retention strategies. Unfortunately, despite your best efforts, you’re not making any significant improvements.

This might be due to the fact that you’re overlooking certain information or data sets when analyzing past trends. Maybe you’re not collecting information about the way in which employees with flexible work schedules differ from others in terms of retention. Include this variable in your analysis, and you might find workers are more likely to stay with the organization when they have the freedom to work from home or set their own schedules. This insight may not have occurred to you if you hadn’t included that important variable in your process.

That’s the most important point to keep in mind. With analytics, HR departments have greater insight into their operations and are more able to help their organizations thrive.  

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