You’ve probably heard of the concept of data-driven HR and how the development of HR analytics has marked the biggest progress in the world of human resources since the spread sheet.
But what precisely is HR analytics and how is it helpful? Data is where the answer starts.
If you are still using paper files or spreadsheets to accomplish HR tasks, you are already collecting and storing HR data.
HR data includes information about the organizations and their workforce. Most HR teams use dedicated HR software to collect data on a daily basis across a number of different areas.
But collecting is only the first step if you wish to utilize the full potential of your data. You must be able to read data and figure out what it means to you and your organization. That is where HR analytics comes into play.
What is HR Analytics?
HR analytics helps HR professionals to make data-driven decisions that have a significant impact on an organization’s success. It covers the entire process of identifying, collecting, analyzing, and reporting on HR data.
Human resource management should use data to its fullest extent. Data is important because it shows historical trends, numerical values, and other types of information a business can benefit from to better develop and manage human resources.
In other words, HR analytics is the math you use to analyze the data and facts you have in front of you to determine how you are performing.
Why an HR analytics tool is the smartest move?
An HR Analytics tool is a tool that helps you collect and analyze key workforce data. It simplifies the process and make it easier to visualize the data and create insights that can drive HR decisions.
If you use an all-in-one HRIS, you are already gathering metrics. While these software applications help you manage attendance, hourly time tracking, candidate applications, job postings, hiring, and benefits, they also naturally collect a wide range of data.
The main challenge is then to identify what data to use and how to use it. That’s the reason why you need an HR analytics tool that will collect, structure, and analyze data according to a set of KPIs relevant to your organization. With the right HR analytics tool, you will be able to conduct analysis that can drive smart and growth-oriented HR strategies.
You will be able to record the number of actions you take and how much time it takes to accomplish a specific task. Based on this data, you will have insights on how you are doing with your missions.
HR analytics makes it possible to carry out operational and concrete reporting on human resources but also to predict or simulate a set of scenarios related to human capital.
What are the key features to look for in an HR Analytics tool?
There are many HR analytics tools available on the market. Some are integrated into bigger HRMS packages while others are sold as a separate piece of software.
Before you make your choice, it’s important to evaluate your HR procedures and determine exactly what you need from your software. Each of these solutions has its unique features set tailored to fit particular use cases.
That being said, here are some features every organization should look for to choose the right HR analytics tool:
Reporting and Visualization
One of the most crucial features of any HR analytics solution is data visualization —This is what enables HR departments to extract patterns and useful insights from the mountains of employee data they are storing.
So, there are a few points to consider regarding this feature:
- You must be able to customize your reports so that you can quickly access pertinent information and monitor the KPIs for your organisation.
- Your team must be able to share reports easily and access them in different formats (Excel, PDF, etc.)
- The tool must include a system of access rights in order to allow access to statistics and reports only to the persons concerned.
Security by design
All HR tools contain sensitive and confidential personal data, from contact details, bank accounts numbers and addresses to personal health information and performance reports.
Therefore, HR analytics tools or HRIS should come with built-in security features such as access rights, two-factor authentication, high security and confidentiality policies as well as compliance with ISO standards such as ISO27001.
User-friendly interface
Last but not least, your software must be simple to use. If you choose a solution that is too complex, your HR team could require further training to use it. Make sure the tool is easy to use to avoid going back to spreadsheets.
How does HR analytics greatly improve your daily management?
1 – HR Analytics improves the candidate & employee experience
Recruitment analytics allows you to monitor the time between a candidate’s application for a job and their acceptance of an offer. So why should you track such a thing?
Because the applicant experience is crucial to the employer brand. It’s important to know how much time you take to hire a new employee to measure the effectiveness of your hiring process.
Reducing the time to hire may raise your hiring success rate, which increases your chances of acquiring top talent in a crowded market.
Novative’s HR recruitment module and our Nova Smart NG analysis and report tool has been designed with high consideration of these factors. HR analytics will be a powerful ally in your recruiting process.
2 – HR Analytics can analyse the turnover rate
The turnover rate, which is expressed as a percentage that illustrates how many workers left a company during a given period of time, usually a year.
An analysis of employee turnover data can help pinpoint why employees are leaving your organization . As an example, you may analyse the turnover and then find out this happens in a specific department with a specific supervisor. Accordingly, this will let you deduce that maybe the supervisor lacks management skills. You can then take action and provide the manager with training on different management methods and how to implement them. Later, you can compare and see if the actions taken have had an impact on the turnover rate in that department.
That is why turnover analysis should not be left behind. A turnover analysis can be used to identify issues with engagement, compensation, development, or hiring.
With the use of such data, businesses can develop focused retention strategies, minimize turnover rates by identifying the root cause, and avoid losses before they occur.
3- HR Analytics helps you keep track of your expenses & save money
Organizations can use expense analytics to compare expenses to budgets and make sure they are not overspending or making unnecessary purchases.
Tracking expenses helps you stick to your budget. Keeping track of your finances is the best way to control your spending.
Our advice
At the end of each month, review the expenses you kept track of to see how much you spent compared to what you expected to spend. If you go over budget, try to reduce your expenses in that area. If you don’t spend too much, you might want to put more money toward debt repayment and savings.
In either scenario, you should use the data that your expense tracking tool provides you with and then adjust the budget for the following month.
4- HR Analytics monitors employee engagement levels
One of the hottest HR topics is employee engagement. And it’s becoming more important due to the current age of remote-based working.
The use of big data* to improve employee engagement is a lot more than using employee engagement surveys to track data. Reward and recognise top performers is also possible.
Big data can be utilized to spot employees who are underperforming and possibly losing motivation. Analyzing employee performance KPIs can all help HR to provide the support to employees in need and effectively evaluate the employee.
This information can then be used to guide and assist managers in identifying opportunities for growth, support, and engagement of their teams.
* Big Data refers to the software tools that can quickly analyse enormous amounts of data from various systems. In regard to HR management, people related data is used to better understand an organisation’s human capital, risks, and business performances.
HR Analytics and its proper use are without a doubt advantageous to HR and the business as a whole. The changes that can be made thanks to relevant analysis have the potential to be profound and far-reaching.
It’s a smart move that any business can benefit from. To start, HR people should move beyond the limitation of the manual HR process. The future of HR is promising, all you have to do is seize the opportunity.
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