The importance of HR analytics and why HR should embrace it
Historically, technical terms such as big data and analytics are commonly associated with computer nerds and data geeks. Today, these terms are everywhere. Big data and analytics are largely used in marketing, customer service, operations and even human resources (HR). HR professionals today need to realise that the HR landscape is more complex than ever and embracing these new technical skills will help them make strategic HR decisions.
First, let us start by understanding the definition of these terms.
The term “big data” refers to a large collection of data sets that needs to be analysed computationally to reveal insightful information on employee, customer or transactional data. These valuable information can help in making good business decisions. Often, these sets of data are so large and complex that it becomes quite impossible to process them using traditional data-processing methods.
Analytics is the process that relies on simultaneous application of statistics, computer programming and operations research to discover and reveal such valuable information from these big data. When it comes to HR analytics, it simply refers to applying analytic processes in the HR department, namely its people data. In short, HR analytics enables HR professionals to gain a deeper understanding into their workforce and use this knowledge to provide the best solutions to business issues.
Here are some credible reasons as to why you need to leverage on HR analytics:
1. Better insights
A typical HR department has tonnes of data in various systems, however the insights and intelligence of these data are seldom extracted simply because it is too time-consuming and complicated. These readily available, unused sets of data have the ability to bring better insights such as identifying top performers or list out employees who are struggling in their tasks. This leads to better decision-making when it comes to employee promotions or planning an employee training programme.
2. Better influence
A good HR data interpreter will have the ability to spot trends and answer specific questions such as “Why is there such a high turnover rate in the company?”. HR can now have a better influence in management’s decision-making with strong evidence of their data, putting them at the same level as data-driven divisions such as finance, sales and marketing. A result-oriented HR department with substantial data will appear more business-like and demands greater respect and attention from other business divisions.
3. Better hires & retention
Rather than relying on “gut feelings”, the ability to analyse a good set of data can help HR professionals weed out bad applicants and avoid bad hires. Predictive analytics allow HR to foresee the right people to hire and identify who are most likely to become successful leaders. By analysing these sets of data, HR can also understand why some employees leave, and why they stay. This can help HR plan for a better recruitment strategy as well as strategies to boost employee engagement plan.
4. Better prepared
It is always better to be prepared than to be caught off-guard. HR analytics helps you fully understand what is currently happening and what is required to keep the business operations running smoothly. In fact, generally, whatever that is measured will likely receive rectification and an improvement when errors are highlighted. Continuous improvement will then dramatically reduce the number of weak decisions and lower the rates of error.
Similar to how analytics has changed the field of every other business aspect, HR analytics is changing the field of HR. Like it or not, HR’s ability to harness and grasp modern technology will dictate just how far a business can go. HR professionals who want to succeed in today’s competitive digital world must be able to learn fast and adapt to the changing business trends. It might be big data and analytics today, but you’ll never know what new trends are coming just around the corner so it’s best to always be versatile and arm yourself with all the necessary knowledge you need to gain any immediate opportunities.