Definition: 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.
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.
Top 5 types of HR Analytics Every Human Resource Manager Should Know
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:
- Employee Churn: 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.
- Capability: 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.
- Organizational Culture: 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.
- Capacity: 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.
- Leadership: 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.
HR Analytics Software
HR Analytics software is essential to keep track of your workforce. It helps in collating and maintaining data across various office locations, departments, roles, etc. Here are some key advantages of using HR Analytics software:
Ease of use: These tools or platforms are very user-friendly and don’t require lengthy training sessions or certifications. You can use demo videos or help videos if you run into any issues.
Data analytics: Data is centrally collated and displayed on dashboards. You can look at historical and current data across several parameters such as tenure, roles, reporting, etc. This helps managers in making informed decisions.
New features: These tools or software are frequently updated with new features in terms of usability, security, reporting, etc. You can customize your platform to reflect your brand colors, needs, and requirements.