6 reasons why HR analytics is required for a great HR function

HR analytics has been rising in popularity in the past 5 years

Human Resources experts, well-versed in psychology and organizational development, have been relatively slow to integrate analytics into their operations and decision making. Once HR leaders realized benefits of advanced analytics, interest in the area quickly increased as you can see explosion in google queries above.

HR analytics enables HR managers to improve their operations and decision making with data. HR analytics enables HR personnel to run advanced analytics to enable:

Improved HR performance

  • 1- Improved hiring: Running machine learning algorithms on existing workforce allows companies to identify which traits lead to success. However, this may also formalize existing biases in the company. Therefore HR managers should question machine learning outputs and make sure that irrational past biases based on attributes like gender or race do not get incorporated into the decision making. Once managers know who will be the right fit for the company they can shape their brand building, outreach and candidate engagement efforts accordingly.
  • 2- Improved retention: Running machine learning algorithms on churn data can uncover churn patterns and predict employees who are likely to churn. This can enable HR to manage churn proactively. Such insights can also help improve onboarding, training and performance management systems if they cause issues which can trigger churn.
  • 3- Objective performance management: The dreaded mid-year reviews end up being subjective and demotivating. Granular performance data can be used for objective, frequent and automatic feedback which can support face-t0-face reviews backed by data.

Improved understanding of the company and its progress

  • 4- Better understanding of productivity and motivation: Uncovering what drives motivation and productivity can help shape HR strategy, including training, performance management and other HR policies. For example if productivity of remote workers can be analyzed, then company’s policy of remote working can be fine-tuned.
  • 5- Better understanding of company culture: Sentiment and network analysis of anonimized communication between employees can help HR managers understand company morale and culture in detail. Since this requires analysis of confidential and personal data, care needs to be taken to ensure anonimity.
  • 6- Accurate record of progress: By tracking key HR data over time, companies can compare themselves in different time periods and observe changes.

If your company is not working with an HR analytics solution provider already, feel free to explore our comprehensive list of vendors for HR analytics. Read more