HR & People analytics is the analysis of employee-related data using tools and metrics. The goal of using analytics is to understand, quantify, manage, and improve the role of Human Capital in the execution of strategy and value creation. It entails collecting data from both internal and external sources, processing, storing, and analyzing it to get insights about human and working traits within the organization.
HR Analytics capture and measure the functioning of the HR team itself – for example, analyzing KPIs such as employee turnover, time to hire, cost to hire, etc. Such analytics are relevant to the operations of the HR Team and they can be held accountable for.
People Analytics use metrics to help you make strategic decisions, like how to make the best employee experience, understanding how teams collaborate or how well your business culture is being adopted.
HR & People Analytics insights allow HR Professionals to make informed decisions related to the whole of the HR Cycle (Recruitment & Selection, Training & Development, Compensation & Benefits, and Performance Management) which will also facilitate the process of formulating an HR strategy and align the same within the overall Business Strategy.
Generally, HR Professionals apply two types of analytics to get insights about a company’s Human Capital:
Descriptive analytics: Mainly used to gather and analyze data that represents the current state of things or historical events. With descriptive analytics, we answer questions like “what happened?” or “what is happening?” For example, we can define the average employee tenure across departments or in a company as a whole, highlight critical reasons for people exiting.
Predictive analytics: Forecasting future outcomes, events or values based on the analysis of current and historical data is done with predictive analytics. With predictive analytics we tend to answer questions like “what is likely to happen?”. Predictive analytics requires numerous statistical techniques.
Process of introducing HR / People Analytics in an organization.
With HR & People analytics, HR leaders can confidently report on the ROI of their projects, policies and initiatives or identify where improvement is required. The reality is that a data-driven HR approach is a key component to reducing turnover, retaining your best talent and increase engagement let alone have a solid impact on the overall business performance.