The world of Big Data is improving both hiring efforts and employee performance. Human resource analytics are key in today’s world to drive effective decision making however not enough employers are actually taking advantage of the data available to them.

Sometimes the term “analytics” intimidates employers and other times, the numbers do not make sense to them. Either way, with practice and guidance, the world of HR analytics will become a key asset to employers worldwide. Here is a quick guide to understand how HR data is key to building a profitable workforce.

What are Human Resource Analytics?

Analytics is based on data. HR analytics is the science of gathering, organizing and analyzing the data related to HR functions like recruitment, talent management, employee engagement, performance and retention to ensure better decision making.

In other words, HR analytics (also known as People Analytics) makes sense of collected data in order to make better HR decisions for hiring, training, and promoting employees. Thanks to analytics tools, more and more HR software is able to help employers record and make sense of the data. Employers in turn better understand trends in their workforce, both good and bad.

What Should be the Goal of HR Departments and People Analytics?

In business, the goal is always one of two things (or both): to lower costs and/or increase revenue. Obviously, to hire the wrong employees or to train good employees only to lose them to turnover rates increases costs for employers. Most employers concerned with People Analytics are trying to lower their costs.

However, the key to using these data analytics is to also increase revenue. Assimilating available data on one’s workforce opens doors to capitalize on the kind of training and promotion decisions that can drastically increase company profits. From an HR standpoint, playing to win (rather than playing to lose) often causes employers to better value their employees as individuals. This sense of purpose and respect is key to keeping great employees.

How Does It All Work?

HR professionals might use a variety of labels for different predictive analytics. However, the underlying purposes are generally pretty close and many of these terms are interchangeable. Here is a rundown of the most common categories within People Analytics.

Recruiting: Competency Acquisition & Channel Analytics

Within competency acquisition, the point is for employers to know exactly what they are looking for in new hires (also known as talent acquisition). This means identifying organizational mission and values and then expressing those values into clear job descriptions. As HR teams compare job descriptions, there should be commonalities within the job descriptions. The commonalities are the pervading core competencies that the organization needs.

Identifying exactly what the organization needs in new hires allows employers to not waste time with the wrong candidates. It also helps them properly incorporate channel analytics. Employers can shed significant costs by finding out where they can find their top employees.

When it comes to channel analytics, recruiters may need to test a variety of channels before understanding which channels are the best. For some employers, their best new hires arise from freelance contractors on sites like UpWork. For others, they secure their best hires through temp agencies or full-service recruiting firms. In many circumstances, an inhouse recruiting team feels extra comfortable with certain job sites like Indeed, Glassdoor, or LinkedIn.

Turnover: Employee Churn Analytics

When employees leave, recording key information from exit interviews and such can help develop employee churn analytics. Employers can get a better understanding of the kind of employees that do not stay and their reasons for leaving. After data analysis, employers may find that they are sometimes hiring the wrong kind of employee. More often than not, something about the work environment makes it difficult for top employees to cope; and as a result, they move on.

Employee Performance Analytics

Current employees should be demonstrating that they can handle their job. In most cases, some employees are not keeping up well, while others are ready for more difficult assignments. This spectrum of employee performance, their technical skills, goals, adaptability, and work ethic are best represented through employee performance data.

These talent analytics can identify employees that need more training, more direction, or more responsibility. It can pinpoint who is ready for the next promotion and who is not. HR managers can eliminate obstacles to employee performance and help everyone reach their full potential.

Talent Management: Workforce Analytics

As the company expands, gaps in the workforce will inevitably arise. Knowing where and how to fill these gaps is best revealed in workforce analytics. It may be that the organization already has what they need to successfully expand. If not, the workforce metrics will allow employers to carefully fill workforce deficiencies, predictive analytics will ensure successful planning for further expansion.

HR software allows employers to forecast sales and growth. By doing so, the capability analytics can also predict how that employer ought to plan their hiring in the coming years.

Payroll software can equip HR professionals with enormous amounts of valuable data. From statistics on acquisitions, absences, employee turnover and consolidated employee cost reporting to information regarding employee skills, productivity, and progression.

Unfortunately, capability analytics often reveals that some managers and employers are simply not fulfilling their expected capability. This helps employers know whether or not they have the right expectations of their employees. The metrics can guide the employer to make any necessary employment changes right away versus waiting for the company to grow.

In Conclusion

For strong and struggling workforces alike, HR analytics is able to take organizations to the next level. HR analytics can guide HR managers to lower company costs and increase revenues simply by applying some principles of ongoing improvement that only good data analysis can provide. Employers need to familiarize themselves and utilize the world of people analytics. It can only catapult the organization’s talent acquisition and human resource management efforts to greater levels of excellence.

Company-wide productivity will improve overtime as new hires become more suited to their roles, vacancies are filled on time and retention improves. This is likely to have a significant and positive impact on the company’s bottom line.

Payroll software that has the ability to provide the HR and Payroll departments with consolidated reporting empowers the payroll department to provide key business insights for strategic decision making.

To learn more about reporting offered by the Payslip platform contact us today!


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