In our data-centric era, businesses across all sectors recognize the value of analytics in informed decision-making. HR is most certainly no exception. In fact, HR analytics, or people analytics, can empower HR professionals to utilize data for managing their workforce more effectively.
To that end, we will consider how best to leverage HR analytics and predictive people analytics to make the most informed decisions possible within the HR field.
The Importance of HR Analytics
Before looking further into how to leverage data to make informed decisions, it’s important to understand the basis of HR analytics overall. HR analytics involves collecting, analyzing, and interpreting workforce-related data. This approach provides insights into employee performance, engagement, satisfaction, and productivity, guiding HR strategies aligned with organizational goals. HR analytics can answer important questions for your company, such as:
Which employees are most eligible for promotion or other forms of advancement?
How is it best to measure an employee’s value to a business?
How many employees currently leave each year?
Studying data and taking into account the information derived from this will help an organization be able to do the following:
Understand new employee behavior better than ever before.
Help identify potential causes for employee trends by looking at past data.
Gain insights from data that can then be given to management.
Collect data for the HR department that will help with employee engagement and behavior overall.
Help understand patterns behind employee performance relating to compensation and more.
Predictive People Analytics
A pivotal aspect of HR analytics is predictive people analytics. By scrutinizing historical data and employing statistical methods, HR can anticipate future outcomes. This proactive approach aids in addressing workforce challenges in talent acquisition, employee retention, and workforce planning.
As mentioned above, when a brand successfully leverages data and analyzes it properly, it can tell them a great deal about what employees are likely to do, think, or desire. This is a big help for HR departments as it gives them keen insight into what is going on without having to ask each employee individually. In fact, it will actually predict what will likely happen and allow the HR department to make needed corrections or changes in the plan to accommodate employees and maintain a high level of employee retention and satisfaction.
Benefits of Utilizing HR Data
Now that we have looked at the importance of HR analytics overall and have considered the use of predictive people analytics and more, it’s important to look at the specific benefits of utilizing HR data. Leveraging HR data through analytics offers several organizational advantages, such as the following:
HR analytics facilitates evidence-based decision-making, leading to effective strategies aligned with organizational objectives. This information will help a business consider its long-term goals, look at what needs to happen in order to see those goals met, and then make decisions based on those objectives. It creates a plan of action instead of a business just going through each day hoping they come out at the other end a success.
Enhanced Talent Management
Insights from HR analytics identify high-potential employees, address skill gaps, and design targeted training, nurturing talent within an organization. Talent is an immensely important aspect of any business, as proper talent management is vital to ensuring the future success of the brand. Today’s highly-skilled employees want to keep growing and learning and prefer development opportunities. Data analytics will help a business understand exactly what type of talent management is most beneficial.
Improved Employee Engagement and Retention
Analyzing employee feedback and engagement metrics helps HR professionals take proactive steps to enhance satisfaction, productivity, and retention. A Society for Human Resource Management benchmark study estimated that each new hire costs a company nearly $4,700. Some estimations have the cost even higher, being three to four times the position’s salary, to get the right talent. This means, in theory, a job that pays $60,000 could cost a brand some $180,000 to fill! Therefore, it is important for organizations to hold onto their talent when possible as going after new employees is a costly and time-consuming endeavor.
Strategic Workforce Planning
HR analytics enables forecasting workforce needs, implementing succession plans, and ensuring optimal role placement. A PwC survey stated that of those studied, some 70% of CEOs stated that “availability of key skills” was a top threat within their organization. Thankfully, through predictive people, analytics means that businesses can successfully strengthen their workforce with the exactly right candidates to fill talent gaps.
Analytics’ Role in Shaping HR’s Future
As technology advances, analytics’ role in HR becomes more vital, influencing HR’s future in the following ways;
Strategic HR Planning
HR analytics aligns strategies with business goals, identifying improvement areas and anticipating talent needs. This will help a business stay ahead of the market trends and not find itself trying to catch up with competitors.
AI and Automation
Analytics empowers AI and automation, streamlining HR processes like employee inquiries and recruitment. The more intuitive AI is becoming, the easier it is to integrate into various aspects of business management, such as HR.
Personalized Employee Experience
HR analytics tailors learning, career paths, and benefits based on individual employee data, boosting satisfaction and engagement. Not every employee will be a carbon copy of another, so it’s important for each one to feel seen, heard, and valued for their individual contributions. Thankfully, this kind of data helps make individualizing employee experience easier.
Future HR decisions will increasingly rely on data-driven insights, fostering continuous improvement and business success. Through data analytics, a business will know where it has been, where it is going, and how it is getting there, helping them make the best decisions.
Analytics and Data Matter in HR
As analytics shapes HR’s future, data-driven approaches provide a competitive edge in talent attraction, development, and retention. Contact us at TPC, where we offer more than payroll, to learn more about properly leveraging applicable data to make the best HR decisions possible.