HR Analytics : How Companies Achieve Better Business Outcomes?

Somewhere over the past decade, the Human Resources (HR) department within an organization transformed from a support function into a strategic one empowering the employees to maximize their potential and deliver great business outcomes.

HR has been instrumental in driving a growth-focused business value proposition by setting up practices that encourage upskilling, continuous learning, and professional evolution among employees.

With this change of role of the HR department, companies have begun to realize the importance of investing in the data-driven digital transformation of the HR department to further improve its strategic impact. From shiny new employee management portals to automated payroll processing and intelligent talent management, several key platforms and tools have entered the fray to cater exclusively to the HR department in a company.

As time progressed, the growth of systems, semi-automated workflows, and digital channels in all operational areas where HR has presence, led to the rapid generation of data in several forms. This is when the next wave of emerging technologies began to make sense for the HR department.

One prominent technology creating an impact is HR Analytics.

Today, people and HR leaders from across industries have opined that analytics have transformed the HR department to help the company align employees with strategic objectives.

Let us examine 5 ways in which HR analytics helps businesses achieve better results:

Improve Recruitment Quality

As HR recruiters rely more on several digital channels for hiring talent, there is a lot of data generated from their search and shortlisting process. By using powerful analytical processing on this data, it becomes easier for recruiters to identify the best sources for and characteristics of the talent associated with specific job roles. Additionally, they also get insights on the pay scales that the industry demands and what candidates often expect from certain roles in line with their market demand. These insights improve the hiring quality and ensure that companies get talent that is the best fit in terms of culture. Analytics also helps the finance team to define the changes needed in their hiring budgets to bring them in line with industry trends.

Plan Upskilling and Career Guidance Practices

The world of business has never experienced as much flux as in the last few months. This has brought the focus onto organizational resilience and agility. That, in turn, has made organizations look at how they are helping their employees adapt to the demands of the future. While most companies recognize the need to encourage a continuous learning practice within their organization, very few have insights into running a successful initiative. People analytics will help the HR team assess skills that are in high demand based on the growth trajectory of the organization and create learning programs to cultivate these skills amongst employees well in time. This could also reduce future hiring costs as there would be several employees with the skills to take up newer and emerging business challenges thereby eliminating the need to hire new (and expensive) resources from outside. HR Analytics can help the organization create impactful and skill development strategies that help the organization as well as the employees.

Streamlining Performance Evaluation

One of the core functions of the HR department is employee performance evaluation. This is vital to decide on growth paths, compensation revision, and other aspects that impact the tenure of an employee in the company. For long, there have been concerns about improper evaluation wherein the HR team doesn’t have transparent access to the actual performance metrics of an employee. They end up having to depend on the feedback given by their immediate supervising manager to rate their performance. This is an extremely personality-dependent process that is prone to errors and even bias. With HR analytics, it is possible to bring in a seamless, automated, and transparent workforce evaluation culture in the workplace. By defining KPI’s for every job role and defining achievements that can be represented by data points, HR can derive an unbiased performance evaluation that is beneficial to both the employee as well as the company. By benchmarking productivity and achievement levels with historic trends, it becomes easier to set KPI’s and performance expectations.

Better Benefits Planning

Besides the salary, there are several benefits that businesses offer today to their employees to bolster loyalty and improve working conditions. From insurance to medical coverage and travel reimbursement, the list is endless. However, it is important to evaluate the merit of each benefit that you offer for the workforce. Not all benefits matter to the employees. Some are plagued by low utilization and others by a low perceived utility. By using analytics, HR can determine the likely impact of each benefit element with accurate data points collected from employees and mapped against benchmarks. By optimizing benefits along with salaries, it is possible to drive up retention and employee satisfaction while managing costs.

Fostering Employee Engagement and Experience

Employee engagement has become the key to building a sustainable work culture in any organization. When employees feel more engaged in the workplace, it automatically translates into better productivity and will result in more value generated. Various factors go into defining what creates employee engagement, or in today’s parlance, employee experience. Defining appropriate role and fitment, providing employees with opportunities and new challenges, valuing employee feedback, and also team bonding and building activities all come into play to create engagement and build an experience that maters to the employees. Insights from HR analytics can be used to make critical decisions on new engagement activities, initiatives, and messaging to maximize resonance and impact, as also in framing new people policies.

HR analytics promises to redefine how organizations will engage with their employees. From helping to reduce attrition to improving productivity and effectiveness, the spectrum of use cases for HR analytics is wide. As organizations look to become more data-driven, the people function looks set to become transformed as a result.

Please visit our Introduction video where we showcase how each organizations can leverage IBM Planning Solutions to perform their HR Planning, Budgeting & reporting requirements.