HR Analytics: The HR Manager’s Edge

Posted in Human Resources Articles, Total Reads: 2272 , Published on 19 January 2014
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“In God we trust, All others must bring data”- the famous saying by the great statistician, William Edwards Deming , holds ground in today’s complex business environment where the field of data analytics is growing in acceptance as well as importance.


No dimension of an enterprise is more important than its people. HR Analytics is a comprehensive and continuous assembly and evaluation of data on “who is doing what?” and “how well?” An organization can make decisions based on facts rather than gut feeling and measure the impact of all HR initiatives by using HR Analytics tools.


HR Analytics provides competitive advantage to organizations by promising better and faster decision making in a timely manner. The HR managers are not only equipped for monitoring the performance but also for analyzing and improving the same.

Image COurtesy: freedigitalphotos.net, pong


Workforce analytics applications refer to software products that help a company draw conclusions from its human resources data. These tools are considered vital for most of the strategic tasks, which include recruiting the right employees, measuring their performance, helping them develop and compensating them effectively.


To make smart decisions around talent acquisition, optimization, promotion and pay, development and retention, firms ideally need to sift quickly through data such as performance reviews, salary levels, benefit programs, career planning, employment equity, grievances, education levels, leave usage patterns, language skills, training and certifications, considerations for promotion/transfer, salary, average work-life of an employee etc.


Analytical tools support the HR managers to generate useful business insights from the available data to comprehend the overall performance of an individual employee as well as the whole organization. Analytics is the most powerful discipline for deciphering the past performance of an organization, the expected performance and measures to improve its performance in future. The information must be provided in a way that best suits the good business decisions.


The HR leaders can establish business linkages to HR initiatives by looking at the expected business outcomes to arrive at business driving processes.

HR Analytics covers most of the...

• Respond to business in advance through Predictive Analytics for Human Resources.

• Improve organizational performance through high quality talent related decisions

• Optimize the talent supply chain

• Increase Return On Investment (ROI) on Talent

• Serving as a source of competitive advantage for organizations

• Execution of business strategy


According to Deloitte Analytics Advantage Survey conducted in North America, Asia and United Kingdom with senior executives of 35 companies in 2013, 96 per cent of the respondents feel that analytics will become more important to their organizations in the next three years and nearly half of the respondents assert that it benefits in better decision making.


The increasing usage of HR Analytics is also backed by the fact that the worldwide business analytics software market is expected to grow at a 9.7 percent compound annual growth rate (CAGR) through 2017 (According to a new forecast in 2013 from International Data Corporation

*A comprehensive road map to conduct HR Analytics includes:

• Determining the critical outcomes

• Conducting objective analysis of data

• Building and executing the programs

• Measure the progress and re prioritize the outcomes


In Human Resources, with the automation of many HR transactions from recruitment to retirement along with the need to perform strategically, HR Analytics is more important than ever. Analytics is about the total amount and the quality of talent, knowledge, and expertise to move your organization forward and stay ahead of competition. It's about measuring the return on human capital investment and measuring the impact and how HR is driving performance, productivity, and profitability.


The late management guru Peter Drucker rightly said that “What gets measured, gets managed”.


At the end, it could be said that a deep understanding of business needs and processes is required to extract best results from HR Analytics tools and proper implementation of processes is the key to make HR a strategic function in any organization.


This article has been authored by MANISHA VASHIST (SCMHRD-PUNE) and ANSHUL CHHABRA (UBS-CHANDIGARH)



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