HR Goes Digital: 4 Reasons to Embark on HR Analytics
HR Department’s role has expanded beyond its conservative focus on administrative processes, transactions and talent management. To play a more relevant and strategic role in the organization, the HR function needs to move beyond mere reporting to accurate prediction. For the past 5 years, HR is witnessing the beginning of two major areas, so called The Big Data and HR Analytics.
Companies have realized that employees are the principal bodies of the organization and HR Department plays an important role to take care of these bodies. HR is the main data collector in an organization which collects employees’ basic information, hiring requirements, salaries, attrition and so on. However, this useful data has been scattered and idle due to the absence of a suitable HR analytics tool, while in fact a proper interpretation of this data-driven analytics can be transformed into improved capabilities in various areas.
Here are 4 Reasons to Embark on HR Analytics
It Provides an Easier Predictive Analysis
Application of predictive analytics in HR entails utilizing relevant data to solve specific business problems. The new opportunities offered by predictive analytics are applicable to all core HR processes, companies will be able to mine revolutionary data related to quality of employees, turnover, and results of investing in training programs as well as other critical parts of HR management.
For instance, the attrition score of individual department can be used to perform some estimation hence preventing any potential attrition to ensure business continuation. HR can help spot and retain better performers for the company. For teams with high turnover of staff, building up the right employee profile can help reduce this churn as well as improving results. it can be very expensive to recruit new hires into the business. Spending some time on internal development and keeping existing employees happy can save more in the long run compared to recruitment expenses and loss of productivity. The right use of data can help, both for the HR team as well as the organization in a holistic view.
It Covers a Critical Talent Management
Training is the ultimate need of any organization. Gaps in the process of training can lead to many big problems and can increase the cost to the company. The various professional development programs offered by the companies, if not handled properly, can lead to being a major part of their budget. It is highly suggested to make an investment for the training by collecting data and learn from the pattern. HR analytics provide the full swing to the training program. It helps the organization identify if employees are making the full use of the opportunities. Based on this, the HR department can design learning programs or new opportunities for these groups. Training objectives should be aligned with specific goals to help measure the impact of HR initiatives and plan for the future.
It allows HR to demonstrate the business impacts
Working with the CFO’s offices, it is possible to quantify the dollar impact that HR actions have on business goals. Quantifying the business impact in dollars makes it easy to compare your business impacts to those of other more visible business functions. Last year a study by the Harvard Business Review group found that advanced user firms that most effectively managed their workforce using analytics improved their firms profit by as much as 65 percent. Metrics help you accurately funnel resources into those high-business-impact areas — once you know the highest-business-impact programs and the ones that are not working, you can more accurately allocate your budget and staff to the areas where they can have the highest impact and ROI. Metrics will increase funding/executive support — since CFOs love metrics, incorporating them into your plans and proposals will increase the likelihood that you will get more executive support and funding. If you report the ROI of individual talent programs, you will be able to compare their effectiveness to those of other business functions.
It increases everyone’s attention
Widely distributing the information of a best-to-worst ranked list of each groups performance on a particular HR topic helps at least the lower ranked managers to focus on the problem. Widely distributing metrics reports also increases best practice and problem sharing across boundaries and between the best and the worst performers. It may also create some healthy internal competition, and yes … some embarrassment among the lower performers, which may set a fire under them. top-performing employees demand that you keep score (champions always keep score and they love accountability). Employees will have to suffer through fewer surprises because their performance level, successes, and errors will be measured and reported to them periodically.
If used properly, HR Analytics will without doubt help HR gain credibility and impact on the business. Much of the HR data needed to conduct HR Analytics sits firmly in HR. HR Analytics is really about creating knowledge to make better HR decisions which are many times made in HR by HR. This very much resonates with our motto, Frontier e-HR, Built by HR for HR.