Human Resource analytics (HR analytics) is about analyzing an organizations’ people problems. For example, can you answer the following questions about your organization?
- How high is your annual employee turnover?
- How much of your employee turnover consists of regretted loss?
- Do you know which employees will be the most likely to leave your company within a year?
You can only answer these questions when you use HR data. Most HR professionals can easily answer the first question. However, answering the second question is harder.
To answer the second question, you’d need to combine two different data sources. To answer the third one, you’d need to analyze your HR data.
HR departments have long been collecting vast amounts of HR data. Unfortunately, this data often remains unused. As soon as organizations start to analyze their people problems by using this data, they are engaged in HR analytics.
In other words, it is a data-driven approach towards HR.
Over the past 100 years, Human Resource Management has changed. It has moved from an operational discipline towards a more strategic discipline. The popularity of the term Strategic Human Resource Management (SHRM) exemplifies this. The data-driven approach that characterizes HR analytics is in line with this development.
By using HR analytics you don’t have to rely on gut feeling anymore. Analytics enables HR professionals to make data-driven decisions. Furthermore, analytics helps to test the effectiveness of HR policies and different interventions.
Like marketing analytics has changed the field of marketing, HR analytics is changing HR. It enables HR to:
- Make better decisions using data
- Create a business case for HR interventions
- Test the effectiveness of these interventions
- Move from an operational partner to a tactical, or even strategic partner
Today, the majority of HR departments focus on reporting employee data. This doesn’t suffice in today’s data-driven economy.