Chapter 2

Rise of HR Analytics
 Learning Objectives

• To understand the scope of HR analytics

• To understand the requisite skills for HR analytics managers
• To understand the different levels of HR analytics
• To gain glimpse into the future of HR analytics
 What HR Analytics Is?

• The application of a methodology and integrated process

for improving the quality of people-related decisions for
the purpose of improving individual and/or organizational
performance.

• Demonstrating the direct impact of people data on

important business outcomes.

• The integration of relevant HR data from different sources,

the performing of organizational and workforce analysis on
this captured data, and ultimately the gleaning of insights
from the findings to shape decisions for better organization
performance.
 What HR Analytics Is Not?

• Not just about efficiency metrics or scorecards.

• HR scorecards do not automatically mean HR analytics.
• Departmental performance is outside the purview of HR
analytics.
• Correlation analysis and benchmarking are not HR
analytics.
Comprehensive Definition of HR Analytics

• A systematic, strategic, and evidence-based approach of

statistically analysing data to understand the effects of HR
variables on employee, group and/or organizational
outcomes.
 Pitfalls of HR Analytics

• The HR manager or analyst needs to justify their stand.

• HR managers or analysts often make attempts to gather
more data if the results are not as per the expectations.
• Researchers try to augment their objective of contributing
to the already existing theories.
• HR analytics may well be misused in order to convince the
stakeholders on the story ‘the’ powerful or influential
person would like to convey.
 Evolution of HR Analytics
• Its roots can be traced back to 1978 when Jac Fitz-enz called for
a radical, anti-establishment action in HR departments.

• For almost three decades, that is, almost till 2008, Fitz-enz
worked on making the top management understand the
importance of measuring HR activities.

• Almost for about two decades (i.e., from the year 1980 to
1999), the refining and improving of these benchmarks had
been in progress.

• Since 2000, HR analytics has undergone several developments,

thanks to the technological advancement.
 Adoption of HR Analytics

• Using analytics approach, Dow Chemicals reduced its hiring

cycle from 90 days to 30 days.
• Major firms acquiring one or other talent
management/analytics suites provided by major players
such as Kenexa (IBM), Cornerstone (Xerox), Visier (P&G)
and Taleo (Oracle).
 Compelling Benefits of HR Analytics

• Recognition of HR as a strategic business partner

• Linking HR initiatives with ROI
• Optimal utilization of human resources
• Focus on areas such as talent retention and performance-
based pay
• Enhance credibility and influence of HR with key decision-
makers
Levels of Analysis
Conducting HR Analytics
 Matrix for Decision-making in HR
Positive and significant
(Strategy: leverage)
If the results show that the relationship
between HR activity and outcome is
positive and significant, the
recommendation should be to invest
increased time and efforts in such
activities.
Negative and significant
(Strategy: depart)
If the results show that the relationship
between HR activity and outcome is
negative and significant, the
recommendation should be to drop
such activities as soon as possible and
keep a record to not to invest in them
again.
Positive and insignificant
(Strategy: minimize)
If the results show that the relationship
between HR activity and outcome is
positive but insignificant, the
recommendation should be to invest
lesser time and efforts in such activities.
Negative and insignificant
(Strategy: avoid)
If the results show that the relationship
between HR activity and outcome is
negative but insignificant, the
recommendation should be to avoid
investing time and efforts in such
activities to the extent possible.
 Who does It?

• HR-accounting analyst, talent analyst, human capital

analyst, and workforce analyst carry out analyses relating
to HR variables.
 Future of HR Analytics

• The next challenge in the future would be to resolve ethical

dilemmas based on the numbers.
• The managers need to ascertain the situations and
conditions in which HR analytics may be used and the
conditions in which it is to be avoided. According to
Rebecca Foreman Janjic (a partner in Heidrick & Struggles’
Menlo Park office and a member of the Global Technology
& Services Practice) and Brad Warga (a principal in the San
Francisco office and a member of the Global Technology &
Services Practice), many companies are yet to utilize
predictive and prescriptive analytics to their full potential.
• The next big thing in HR analytics seems to be
implementing machine learning in HR functions.
 The Scope of Big Data in HR Analytics

• The access to information in terms of both quantity and

speed has become much more than ever before. Given the
benefits of big data, a lot of companies are going beyond
the publicly available platforms such as Google, Facebook
and LinkedIn.
• They are making all efforts to collect data from within their
organizations extensively at the individual, group and
organizational levels.
• These data are no more limited to the traditional measures
such as sales and productivity. They are keeping track of
the changes in the employee behaviors by observing them
on daily basis.
Scope of Text Analytics in HR Analytics
THANK YOU