Human Resource analytics (HR Analytics) is defined as the area in the field of analytics that deals with people analysis and applying analytical process to the human capital within the organization to improve employee performance and improving employee retention.
HR analytics doesn’t collect data about how your employees are performing at work, instead, its sole aim is to provide better insight into each of the human resource processes, gathering related data and then using this data to make informed decisions on how to improve these processes.
Learn more: 50+ FREE Employee Evaluation Survey Template
For example, using HR analytics you can answer the following questions about the organization’s HR system:
- How high is your employee turnover rate?
- Do you know which of your employees will leave your organization within a year?
- What percentage of employee turnover is regretted loss?
Most human resource professionals will be easily able to answer the first question for their organization. However, answering the other two questions will be tricky, especially if you don’t have a detailed data for it.
In order to answer the other two questions, as a professional, you would need to combine different data and analyze it thoroughly. Human resources tend to collect a good amount of data but are unaware of how to use this data. Well, here is the answer! Use it now to analyze your human capital and make informed decisions. As soon as an organization starts to analyze their people problems using the collected data, they are engaged in active HR analytics.
It goes without saying, that employees are an asset and vital to the success of any organization. I can say without a doubt, that any business that can attract the right resources, manage talent acquisition, and utilize their resources to the optimum is setting a long-term path for success.
Here are the 5 HR analytics every manager must know:
1. Employee Churn Analytics: Huge investments are involved when it comes to human resources and this holds true for any business or organization. Employee churn analytics is the process of assessing your workforce turnover rate. Employee churn analytics helps predicts the future and reduces employee churn. Historical employee churn is the data collected from the past and specifies the employee churn rate since the start of employment. Predictive and historical churn data both are important for employee churn analytics.
2. Capability Analytics: Undoubtedly, the success of any business to an extent depends on the level of expertise of the employees and their skills. Capability analytics refers to the talent management process that helps you identify the core competencies of your workforce.
Once you know what those capabilities are, you can set them as a benchmark and compare them to the capabilities of your workforce and measure any gaps.
3. Organizational Culture Analytics: Culture is not only notorious to pinpoint but also, tough to change. It is often the collective unspoken rules, systems, and patterns of human behavior that make up for the culture of your organization or business.
Organizational culture analytics is a process of assessing and understanding better the culture at your workplace. When you know what is the culture of your organization, you can then evaluate and keep a track of the changes you might observe. Tracking culture changes helps to understand the early signs if the culture is getting toxic.
4. Capacity Analytics: It’s true, capacity affects revenue. The aim of capacity analytics is to establish how operationally efficient is your workforce. For example, in an organization that specializes in designing clothes, people are spending too many times on meetings and discussions than spending that time in more profitable work, or are individuals way too casual about their tasks? This behavioral analysis is capacity analytics that determines how much capacity they as individuals have to grow.
5. Leadership Analytics: Poor leadership is as good as no leadership at all. Poor leadership costs money, time and employee churn. Employee retention for such an organization becomes extremely difficult and prevents a business to perform at its full potential. Leadership analytics analyzes and unpacks various aspects of leadership performance at a workplace to uncover the good, bad and the ugly! Data can be collected through qualitative research and quantitative research by using a mix of both methods like surveys, polls, focus groups or ethnographic research.
To get started with HR analytics, a human resource manager needs to map and collect all the relevant data. For example, consider hypothetically, you want to measure the impact of employee engagement on the financial performance of the organization.
You will need employee engagement data and your organization’s financial performance data to draw inferences based on these statistical inputs. As an organization makes sure to deploy an employee engagement survey once every year. This will help you collect the most recent data on how engaged your employees are at the workplace.
Key working areas can be analyzed based on the output of this collective data. Imagine what you can do with this kind of data! It is almost impossible to side look when you have a treasure of data that can help you make future predictions accurately.
And this just doesn’t stop here, you can make predictions in different performing and non-performing areas of your organization. Whether it is to draw an inference for budget allocation for employee training or predict which new employee will become the best performer. The range is wide!
The HR Metrics dashboard is an important part of Human Resource planning and strategy. It is a tool that forms the basis of informed decision making within the organization, specifically for the Human Resources department and other stakeholders. Before we dig any deeper let’s cover the basics first. Here are the top 3 functions of an HR dashboard:
1. To monitor human capital: Regular reporting enables HR to keep a track of the activities that are going on in the organization and amongst the employees by tracking the key workforce metrics. New trends can be anticipated and emerging problems can be addressed before they negatively impact the business.
2. Help HR perform better: An HR metric dashboard helps managers perform better at their workplace. The report can inform managers about any significant changes or development within the teams. For example, consider that the accounting department struggles with high employee turnover, managers will be more likely to put emphasis on employee retention and keep in mind the risks time taken to replace an employee if he/she quits.
3. Tackle problem areas: The metrics dashboard also offers a great way to tackle problem areas with greater transparency. In an organization HR will pay greater attention if the system is transparent and known to all, the HR metrics dashboard helps regulate this transparency since the reputation of the HR will be on line.
At QuestionPro we understand the importance of reporting and Tracking. We offer our customers and clients the next generation workforce analytics. QuestionPro Workforce offers HR Dashboard that is a one-stop solution to all your HR issues. You can track:
- Employee activities
- Submit Feedback
- Managers can perform and submit reviews
- And much more
1. Don’t go over the top with your surveys
One very important aspect of human resources is to know where to draw the line. Why send out a survey only once or twice a year, when you can send it anytime. But wait, do your employees really want to keep filling out surveys a day in and day out. I predict this approach won’t last long, especially if only limited action is taken even after collecting this amount of data.
Continuous listening cannot last for long. Employees will start getting irritable and filling out the survey will become a mere formality than giving honest feedback. In addition, the data obtained will be diluted and irrelevant.
2. Collect data only if you are planning on using it
It’s the age of technology and you can get carried away, send all those surveys and collect rich data and then get totally confused about what you are going to do with all that data. When employees give their feedback they expect to see the results. If results are not visible they will stop giving you honest feedback. Make sure to use your data at the right time for the right reasons.
3. Technology: Boon or a Bane?
HR analytics majorly revolves around studying people. Technology is the necessity of time, but let’s be completely honest, is it the right time to force it into a behavioral analysis. Machine learning and Artificial intelligence are drastically impacting day-to-day operations, so my first impression of it is, it’s a hype.
The complexity of technology makes it a barrier in the field of human capital. The first hurdle is purely predicting human behavior, letting a computer take these decisions has “DANGER” written all over it. You cannot put everyone in your organization in one bucket. You cannot generalize your workforce and if you are willing to do that let me warn you of the blunders you are about to commit.
Although this might tempt you, surely it’s too early to computerize humans, is it even appropriate?