HR Data Analytics: Using Metrics to Drive Informed Decision-making

Rolling Plans Pvt. Ltd. Jun 8, 2024 1842 0
“What gets measured gets improved.” This quote by Peter Drucker unriddles that measuring the factors gets the potentiality of enhancements or development. If the factors are left as they are, there is no room for embracing new changes and updates, And data plays a crucial role in analysis and decision-making. The field of HR is habitually changing and centric to new directions and innovations in technology and the workforce management sector as technology is always evolving and HR Data Analytics act as the pivotal tool for HR professionals to implement HR strategies into meritorious actions. In a nutshell, HR Data Analytics is the summation of data that lays the foundation for HR analysis and decision-making. 


The modern technology is unfolding several changes and innovations. HR Data Analytics is backed up with such dynamic tools that plunk for making informed and data-driven decisions for optimizing workforce performance, employee engagement, and other HR programs and initiatives. HR data analytics helps HR professionals to undertake a data-driven approach to extract knowledge and insights from HR data to use them on various human resources functions from the hiring process to employee development programs. It is a kind of scientific methodology for collecting, organizing, and analyzing huge employee-related data such as employee performance, demographics, turnover rates, sabbaticals, and many more for the identification of patterns, trends, and correlations to make strategies and plans on human capital management including workforce planning, hiring and onboarding process, and many more.


It is momentous for any organization to drive informed decisions backed up with spot-on data concerning the human resources processes and functions providing insights on the trends, patterns, and correlations that enable the HR personnel to get wind of the improvement areas in the workforce. The use of HR data analytics assists HR professionals in various HR functions from employee pays to learning and development programs in the organization. Using HR Data Analytics doesn’t need a huge chunk of dedicated data scientists and labyrinthine technologies but with the use of the exact metrics, decision-making can be quite easier and efficient. 
 


But how does HR Data Analytics help to drive informed decision-making? Let’s find out. 


1. Recruitment and Onboarding

The application of various HR metrics enables to finding of the best methodologies for sourcing, evaluating, and hiring the recruits. Cost per hire, the cost of recruiting including advertising, and recruitment fees can be addressed and assist HR in streamlining the recruitment, onboarding, and hiring processes. 


2.  Payroll management

With the use of HR Data Analytics, overtime expenses can be tracked per the employees’ position, working department, and the amount of work completed due to his/her dedication after original hours too. With the accessible data for tracking down such payroll expenses, HR can initiate planning to manage the costs and workforce per budget and organizational capability. 


3. Diversity and Inclusion 

When there is access to data about the workforce, HR can easily bring policies regarding diversity, inclusion, and GESI which is one of the top priorities in many organizations. They can introduce possible programs concerning the diverse and inclusive culture in the organization. 


4. Training and development programs 

The T & D programs are to be frequently organized within the organizations to enhance employees’ caliber and talent. The use of HR Data Analytics enables HR to track down if the benefits the organization is offering meet the employees’ needs and if the programs organized can bring positive enhancements within the workforce. 


5. Employee Engagement and Experience 

Employee surveys and evaluation feedback are measured to compare the answers generated with the previous years. Absenteeism and turnover rates are used to examine the lack of employee engagement but why do these happen? HR Data Analytics finds out the answers. For example, due to excessive flu, employees were absent and couldn't attend work and others. Also when employees bid their Goodbyes to the organization, their feedback may help HR to introduce changes in the workstations. Hence, exit interviews should be standardized to discover the key areas of improvement. 


Hence, with the aid of HR Data Analytics, various sectors of HR can be made efficient as it helps to overcome challenges of turnover, weak talent pipeline, absenteeism, and many more by generating the exact reports leading to data-driven decision-making. 
 


HR Data Analytics: Using Metrics to Drive Informed Decision-making


How does the use of metrics in HR Data Analytics help to drive informed decision-making? 

HR Metrics and HR Data Analytics are two different approaches used in the HR sector. HR metrics serve as the foundation for HR Data analytics. HR metrics are the specific measurements that assist HR professionals in assessing various aspects of HR functions such as workforce performance, recruitment effectiveness, compliance, training outcomes, and many more while HR Data Analytics analyzes, interprets, and demystifies these HR metrics to introduce the significant insights with the application of statistical tools, methodologies and data visualization tactics and identification of trends, patterns and conditions within such HR metrics. 


Also referred to as People Analytics and Talent Analytics, HR Data analytics provides a more holistic view of the raw data provided by HR metrics by transforming the raw data into more actionable and insightful constructs. With the effective integration of HR metrics and HR Data analytics, there can be the establishment of effective workforce management. Google, Walmart, and Microsoft like bigger giants use HR Data Analytics. This helps to reduce attrition and bring positive outcomes in the organization along with planning for new recruitments. Along with these HR functions, HR Data analytics can be used in tracking revenues, discovering the optimization opportunities for employee engagement, and many other HR functions and processes. 


Some of the HR metrics that can be used for HR Data Analytics are illustrated below: 

1. HR Services and Software metrics 

- Cost of HR per Employee 

- HR Software Employee Participation Rate 

- Ratio of HR Professionals to Employees 

- ROI of HR Software 


2. Recruitment Metrics 

- Acceptance Rate 

- Cost per Hire 

- Demographics 

- Headcount 

- New Hire Turnover 

- Time to Hire 

- Time to Productivity 


3. Engagement and Employee Retention Metrics 

- Employee Satisfaction 

- Retention Rate 

- Retention Rate per manager 

- Total Turnover Rate 

- Talent Turnover Rate 

- Voluntary Turnover Rate 


4. Time Tracking Metrics 

- Absence Rate 

- Absence Rate per manager 

- Overtime hours


5. Performance Management Metrics 

- Company Performance 

- Employee Performance 

- Goal Tracking 

- Performance and Potential 

- Revenue per Employee 


6. Training and Development Metrics

- Training Completion Rate

- Time to Completion

- Training Effectiveness

- Training Expenses per Employees 


People have begun to understand the importance of data, metrics, and analytics after the frequent events of Quiet Quitting, the Great Resignation, and the over-competitive marketplace. Some of the best HR Data analytics tools with their features that the organizations can use to optimize the workforce recommended by popular HR websites and HR professionals are enumerated below: 

1. ChartHop

- Facilitates far-sighted planning 

- Allows feedback system within teams 

- Easily addresses common HR complications 

- Includes modules for headcount planning, performance planning, performance management, and employee experience 

- Plenty of HR Analytics templates available with easy integration


2. IBM ILOG CPLEX Optimizer 

- Advanced UI with better data integration 

- Assistance for newer cloud architectures 

- Good for complex organizations with complicated scheduling decisions

- Supports in optimizing workforces for new corporate expansions and launching new products in the marketplace 

- Various tools available for complex workforce optimization 


3. Microsoft Excel

- Translates complex data into understandable form 

- Availability of programming tools for capturing information from different systems 

- Automated report generation and easy sharing across team members

- Industry leader and quite popular in all the departments of any organization 


4.  Microsoft Power BI

- Well-documented and extensive integrations into major HR applications and systems 

- Constitutes multifold options for analyzing, presenting, and visualizing data 

- Enhances communication amongst the team members 

- Customization options with analytics dashboards and metrics 


5. Python 

- Flexible tool for the automation of complex data engineering workflows 

- Requires strong collaboration between HR, development teams and data scientists 

- Quite popular for AI and machine learning applications 

- Helps with data engineering and data preparation 


These are some of the HR Data Analytics tools for optimizing the workforce recommended by popular HR websites and HR professionals. Besides these, there are various HR Data Analytics tools such as Qlik, R, IBM SPSS, Tableau, Visier, and many more. HR and the team must address the challenges and requirements of the organization to buy and use these tools.


To sum up, HR Data Analytics with the integration of HR metrics undoubtedly helps to drive informed decisions backed up with data that assists in translating the raw data into actionable and knowledgeable insights supporting employee development and business decisions for competitive advantage. Hence, the organization should invest in HR Data Analytics for data-driven and informative decisions that work for both organizations and the human resources of the organization.

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