The Importance of HR Analytics and How to Use Them

If you’re an HR professional, you’re already well aware that technology constantly changes how you work. Leveraging it effectively is key to helping your company thrive. 

That’s why it’s important to understand how your HR department can use analytics to their advantage. This guide will introduce you to the topic, and help you learn ways to implement analytics and performance management software to improve your approach to various tasks.

How to Use Data Analytics in HR

Analytics is the practice of using data and statistical models to make more informed decisions and predictions. According to Deloitte, HR analytics can be broken down into four distinct levels: 

  • Level 1 – Operational Reporting: This stage involves reviewing past data to better understand its significance, and past trends.
  • Level 2 – Advanced Reporting: Data collection and reporting is much more frequent at this stage. At this point it should be automated and/or routine.
  • Level 3 – Strategic Analytics: At this level, HR professionals begin to create models with data, learning how different variables impact each other. 
  • Level 4 – Predictive Analytics: As the name implies, this level involves using data to make predictions about the future, and to plan accordingly. For instance, companies are analyzing various factors, such as performance review results and time spent in a given position, to determine how likely certain employees are to stay with the company.

Use this model to simplify your analytics methods. By breaking it down into steps, this process becomes much easier to adopt and implement into your practices.

The Importance of Collecting Data

You can’t easily analyze data you don’t have easy access to. Thus, one of your first steps should be to gather all pertinent information and store it centrally. This may be a time-consuming task, requiring you and your team to pore over old files, but the future benefits will be worth the effort.

It’s also a good idea to use a dashboard for managing this data. With a wide range of options available to you, take some time to explore the features of various programs in order to decide which is right for your needs. You want a program that allows you to analyze all relevant data while organizing it in a manner that’s easy to digest and visualize. 

For example, perhaps you want to determine where most people who apply to your company find your job listings. An HR dashboard could represent this in the form of a chart or graph, telling you which percentage of applicants applied through a listing on a job search site, which applied directly through your portal, etc.

HR Analytics

How HR Technology supports the use of analytics in HR

HR teams are increasingly starting to leverage the power of their data. They take matters into their own hands by creating their own internal reporting dashboards. But on the other hand, there has been an emerging trend from the business side as well: embedded analytics.

This means that the HR business applications you are using as an HR professional are offering more & more data insights, directly inside the application itself. More & more HR tools are starting to embed interactive reports in their platform, to support you in data analytics.

Choosing for a platform that offers built-in analytics can save you time & offer out-of-the-box insights into your HR strategy. All without having to build the reports yourself.

Training is Key

The technologies of today have made data analysis easier than ever before. BI tools have become increasingly simplified, so you don’t always need a background in data science to get started with your data. As an HR professional, simply picking the right toolstack can help you to make a jumpstart.

However, do keep in mind that you may not be the only person analyzing data within the HR department. Odds are good your team members will also be involved in this task. Thus, you need to ensure they are properly trained.

This might involve hiring an outside expert to offer a training session. However, if other departments at your company already use data analytics, employees from those departments may be able to train your team instead, saving the company money.

Always Improve

Be sure to consistently monitor your analytics to determine if there are ways to improve your methodologies. Look for inefficiencies, errors, and any other issues that may need to be corrected. To take full advantage of analytics, you need to be willing to constantly improve.

Applying direction to your strategies with data will pay off. With analytics, HR can predict turnover rates, whether new hires are likely to succeed, and how you can what exact improvements should be made. These points will help you get started as you introduce the practice of analytics to your company.

About the author

David Mizne is Marketing Communications Manager at 15Five, continuous performance management software that includes weekly check-ins, objectives (OKR) tracking, peer recognition, 1-on-1s, and 360 reviews. David’s articles have also appeared on The Next Web & The Economist Blog. Follow him @davidmizne.

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