In the recent years, most business functions have undergone a transformation because of the power of Big Data, Cloud Storage and Analytics. The Digitization wave that is sweeping the industry now is nothing but an outcome of the synergy of various technology developments over the past 2 decades. HR is no exception to this. HR Analytics and Big Data have provided the ability to HR leaders to take “intuitions” out of their decisions, that have been the norm before and replace that with informed decisions based on data. The use of HR analytics has made official decisions more promising and accurate.
For this reason, today many companies invest tremendous resources on talent management tools and skilled staff including data scientists, analytics and analysts.
Nevertheless, there’s a lot more to do in this area. According to a Deloitte survey, 3 out of four businesses (75%) believe the data analytics use is “important” but only 8% think that their organisation, is strong in analytics. (The same figure as in 2014).
HR Analytics can touch every division of HR and improve its decision making including Talent Acquisition and Management, Compensation and Benefits, Performance Management, HR Operations, Learning and Development, Leadership Development, etc. .
Most organizations today sit on a pile of data, thanks to HRMS & Cloud storage. However, in the absence of a proper HR analytics tool or necessary capability in HR professionals, these useful data or information we are talking about might be scattered and unused. Organizations are now getting to accept that Analytics is more about capability and less about acquiring fancy technological tools.
A HR Professional with right Analytics capability can interpret and transform this valuable data in useful statistics using HR and big data analytics to insights. HR will determine what to do on the basis of the results until trends are illustrated. The impact of HR metrics on organisational performance is analysed using analytics and that can enables leaders to take proactive decisions.
HR Analytics can also help in addressing problems that organizations face. For example, High performers exit an organisation more often than low-performers, and if so, what leads to that turnover? Data based insights can empower business leaders to take right decisions regarding talent rather than mulling over intuitions or finger pointing between HR and Business.
Here are 6 big Benefits of HR Analytics
It is very common to see that HR function in isolation vis-a vis the business. If you don’t agree with me, find out what business leaders do when HR slides are put up in Management Committee presentations and what HR head does when Business slides are put up? Most HR metrics, processes, & policies are benchmarked with respect to industry and competition, but very rarely they are aligned to hard hitting reality of their own business. For example, just by aligning HR metrics to business metrics, such as HR Cost per Revenue or HR Cost per unit sold, Revenue per employee, Average Lead time to productivity, HR professionals can take the first step towards better alignment to business strategy.
Complex decisions regarding the hiring, employee performance, career progression, internal movements, etc have direct impact on business strategy. When HR Analytics can provide insights on which employee is most likely to be productive in a new role, who is most likely to accept a internal job movement based on historic data, how long is it likely to take to close a critical position, based on data, HR seamlessly aligns with Business needs and strategy.
Not long ago, HR was marred with policy paralysis. Organizations had HR policies for everything. Processes were built for those policies and not for people who would use, manage or benefit from it. HR Automation is many ways has helped organizations their standardize processes. Whether it’s about Leave Approval, Employee Escalations, Reimbursements, Payroll, etc.
When we have meaningful data that provide us insights about processes, we will be able to take decisions that matter the most for our employees. For example, an organization introduced flexible working hours for its executives just because everyone in the market is doing that. And because few employees asked for it. Few weeks into the few flexi working system, surprisingly, they found that most employees wouldn’t avail this benefit. Data suggested that 90% of employees commute to work using company shuttle as the organization is located in an industrial suburb. So just by looking into data, organizations can build processes that are meaningful rather than what is an industry norm.
Another popular example is that of Google reducing the number of rounds of interviews based on data, thereby improving candidate experience, interviewer experience and cutting down on the lead time to hire.
Insights from the data across employee lifecycle can help HR managers emotionally connect with employees, build personalization , etc., For example, if an employee struggles to comply with certain HR policies, data of can provide timely insights on how the organization can support the employee in bettering his experience during the tenure thereby creating a win-win situation.
Data insights from HR analytics can suggest to us which candidates are likely to get selected, which are likely to perform well, if selected, thereby enabling the business to increase its performance and success rate. Such insights can be used in not only hiring, but in career progression, retention, learning and development, etc., For example, it would be an invaluable insight if HR can suggest which employees are likely to perform together without conflict, if business wants a put a new team together.
HR Analytics can help HR managers identify blind spots as far as leakage is concerned. For example, how much increment should we give a candidate, what are the increment slabs that the organization have so as to keep employee attrition within certain level, and so on.
Ultimately, it is every HR head’s dream to build an organization that employee’s love to work for -One where employees wake up every morning and say, ‘here’s another great day’. Instead of being a copy cat and experimenting with what works for other best employers in your industry or country, delving into data can cull out insights on what your employees love, relish and dislike.