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What is HR Analytics?
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question “what is HR analytics?” In this post, we will explain what HR analytics is,
how to get started, and how it will shape businesses in the future.
Contents
What is HR analytics?
Using data in HR
What is HR analytics?
HR analytics, also referred to as people analytics, workforce analytics, or talent
HR analytics is a fairly novel tool. This means it is still largely unexplored in scientific
shifted from an operational discipline towards a more strategic one. The popularity of
the term Strategic Human Resource Management (SHRM) exemplifies this. The
By using people analytics you don’t have to rely on gut feeling anymore. Analytics
By the way, HR analytics is similar to people analytics but there are some subtle
throughout the global pandemic. Moving towards a post-pandemic world, there are
hybrid work or the increased use of automation. In this age of disruption and
uncertainty, it is vital to make the correct decisions in order to navigate our new
realities.
Using data in HR
Of all the departments in an organization, the Human Resource (HR) department
Picture your role from the other side – when you ask an employee to come by your
office, it’s likely that something bad is about to happen. You may need to reprimand,
put on notice, or even fire your colleague. Good news, like getting a promotion, tends
HR is based on ‘gut feeling’. We’re doing things a certain way because we’ve always
done it that way. HR doesn’t have a reputation of bringing in the big bucks or playing
a numbers game like sales. HR also struggles to quantify and measure its success,
HR data analytics changes all of this. A lot of the challenges we just described can
Do you know which employees will be the most likely to leave your company within a
year?
These questions can only be answered using HR data. Most HR professionals can
easily answer the first question. However, answering the second question is harder.
To answer this second question, you would need to combine two different data
Management System.
To answer the third question, you would need even more HR data and extensively
analyze it as well.
As a HR professional, you collect vast amounts of data. Unfortunately, this data often
remains unused. Once you start to analyze human resource challenges by using this
The majority of HR departments just record, and store employee data. This doesn’t
the words of Carly Fiorina: “The goal is to turn data into information and information
HR data sources are combined, cleaned, and used for reporting and people analytics purposes
A few examples of HR Analytics
To get started with HR analytics, you need to combine HR data from different
systems. Say you want to measure the impact of employee engagement on financial
engagement survey with your performance data. This way you can calculate the
departments.
Key HR areas will change based on the insights gained from HR analytics. Functions
like recruitment, performance management, and learning & development will change.
Imagine that you can calculate the business impact of your learning and
development budget! Or imagine that you can predict which new hires will become
your highest performers in two years. Or that you can predict which new hires will
leave your company in the first year. Having this information will change your hiring
If you want to read more about how data can change hiring practices, check out
Laszlo Bock’s book ‘Work Rules’. Laszlo Bock was the senior VP of People
We’ve published some practical case studies in the past that show a step-by-step
potential for progression and leadership?” You can answer this question using quite
simple statistics. Doing this helps to quantify the relationships between people’s
abilities and organizational outcomes. In this way, analytics can help your
AIHR, we offer our People Analytics Certificate Program. These three courses are
The HR Analytics Leader course. This course is for managers who are heading an
analytics department. It teaches all the skills and tools needed to do this successfully.
The HR Data Analyst course. This course is for HR professionals who want to learn how
to work with HR data using simple tools like Excel and PowerBI.
The Strategic HR Metrics course. Metrics are the foundation of analytics. If you think
you’re not yet ready for analytics because you’re not working with the right metrics, this is
Analytics makes HR (even more) exciting. The insights provided can lead strategic
And if you know what makes your employees tick, you can create a better work
environment and identify future leaders. Imagine that you could predict which
employees are most likely to leave the company. This information helps in long-term
planning for succession management – it benefits strategic workforce planning. A
People analytics only adds value when it is driven by a business question – and thus drives
business results
After asking the right question, you have to select the right data from your different
systems. This data is then combined, cleaned, and analyzed. This analysis leads to
insights.
Not all insights are equally interesting, or valuable. That’s why you need to ask
questions about things your HR department can have an impact upon. For example,
you can’t change the wider economic trends, such as if your country is currently in a
recession. However, you do have influence over your management styles and
These examples are only the beginning. Indeed, analytics enables companies to
By applying complex statistical analyses, HR can predict the future of the workforce.
practices. To read more about the tools used for these analyses, check our overview
analytics (Lawler III, Levenson & Boudreau, 2004). This is often done by calculating
a Return on Investment (ROI). It is the most powerful way for HR to increase its
strategic influence.
Common topics
in HR analytics
The aforementioned examples have an impact on both the cost and the revenue side
of the business.
Knowing the impact of HR policies will also help HR to become a strategic partner
and get rid of its ‘soft’ image. It helps HR to align its strategy with business goals and
to quantify the value it adds to the business. It takes the guess-work out of HR.
guesswork out of employee management and is, therefore, the future of HR. Or, to
put it in the words of Edwards Deming: “Without data you’re just another person with
an opinion”.
on people analytics. It contains the major challenges that the field is facing in terms
of skills, data quality, data integration, and reporting. To download the full infographic
critical questions about your organization. This enables better and data-driven
decision-making.
Common data sources include internal data like demographic employee data,
External data sources can include labor market data, population data, LinkedIn
data, and much more. Any data that’s relevant for the specific project can be
used.
bring everyone together and enable the people analytics project, and
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