HR Metrics & Analytics

“That which is measured improves. That which is

measured and reported improves exponentially.”
Karl Perason
 Index
 What is HR Metrics?
 What is HR Analytics?
 How HR Metrics & Analytics relate
 Common Metrics measured by HR Analytics
 Data Required By HR Analytics Tools
 Implications of HR Analytics for HR Professional
 Types of HR Analytics
 Advantages of HR Analytics
 Disadvantages of HR Analytics
 Case study
 CONCLUSION
What is HR Metrics?
 HR metrics are measurements used to
determine the effectiveness and efficiency of
HR policies.
 Metrics don´t say anything about a cause,
they just measure the difference between
numbers.
 HR Metrics are indicators that enable HR to
track and measure performance on different
aspects and predict the future.
 Human Resource Metrics are measurements
that helps you to track key areas in HR data.
What is HR Analytics?

 Systematic identification and quantification on how

people strategies can lead to business outcomes.

 It drives Data Driven Decision Making and Evidence

Based HR Practices.

 HR analytics, also called people analytics, is the

quantification of people drivers on business outcomes.

 Analytics measures why something is happening and

what the impact is of what’s happening
This is show how
HR Metrics &
Analytics relate
Common Metrics measured by HR Analytics
 Revenue per employee: Obtained by dividing a company’s revenue by the total
number of employees in the company. This indicates the average revenue each
employee generates.
Formula Revenue per employee =
For example, company ABC has 80000 employees and revenue 25000
On the other hand, company XYZ has 90000 employees and revenue 46000
So, the revenue per employee ratio of company ABC is 0.312500 and company XYZ is 0.511111

 Time-to-productivity: The period of time from hire to full productivity.

 Employee Satisfaction: It shows whether employees would recommend their

organization as a good place to work. Higher the rate, the happier is the
workforce.
Common Metrics measured by HR Analytics
 Employee turnover rate: This rate calculates the number of
employees who leave the company divided by the total number of
employees, within in a given time. It is indicated as percentage.
For example, in a company the average numbers of employees are 50 and
5 employees left the company.

 Offer acceptance rate: It shows how many candidates have

accepted the offer in comparison to the total number of offer
letters extended by the organization. 

For example, in a company total number of applicants are 1000

and numbers of applicant accepted is 35
So, the offer acceptance rate is 3.5%
 Common Metrics measured by HR Analytics
 Cost-per-hire: Cost per hire is a recruiting metric that measures
the costs associated with the process of hiring new employees.
These include expenses such as sourcing and recruitment
advertising costs, onboarding, referral bonus program costs, etc.

Formula, Cost per hire=

Example: Cost per hire

 Training Expenses per Employee: At every organization, employees
require training and support. Here is a metric that measures the total
cost of the organization’s training programs, divided by the total
number of participating employees.

Formula, Training expense per employee=

 Time to Hire: The total days it took to hire a job applicant after listing the
job out on platforms and the company website.
 Common Metrics measured by HR Analytics

 Absenteeism: Absenteeism is a metric, which is measured by dividing the number of days missed by
the total number of scheduled workdays. Absenteeism can offer insights into overall employee health
and can also serve as an indicator of employee happiness.

Formula, Absenteeism Rate =

For example, In a company, average number of employees in workforce is 100 and number of available
work days during period is 20. Total number of lost days due to absence is 93
So, total number of available workdays = 20 = 2000
Then Absenteeism rate= (93 100)/2000 = 4.65%

 Retention Rate: A key metric. It shows the number of employees who stayed in the organization over
a period divided by the total number of employees. It is considered a key indicator of organizational
culture.
 • HR analytics will make the HR function
Implications of HR more strategic.

Analytics for HR • Analytics requires a data-driven mindset

for HR professionals.
Professional • The data going into the systems will
become more important.

• Analytics changes HR by busting long-

held beliefs.
 Types of HR Analytics
• Descriptive analytics
which is made up of observations and reports, are important as they consist of observing
the workplace to gain initial insight into what is going on.

• Diagnostic analytics
 takes the observations to the next level to understand why and what is the cause. It may be
clear that employees are unhappy, but it is important to find out why.

• Predictive analytics
is used less than the others, but is where organizations can predict ways of improving the
situation and attempt them.

• Prescriptive analytics
is the final step where it considers the cause of the issue and uses the data to prescribe what
needs to be done to fix it. Prescriptive analytics relies on the other three forms of analytics
to get the best outcome.
Advantages of HR Analytics
 HR Analytics Improves Talent Acquisition
The right HR analytics software will look at all the information & skills of the candidates provide in
their application & throughout the hiring process, compare that with our company listing, and draw
up an unbiased shortlist of the best potential candidates using its specific algorithms.
 It Increases Staff Retention
Find patterns in the gathered information to understand what is causing attrition & put remedial
measures in place to avoid that in the future.
 HR Analytics Improves Employee Experience
Using HR analytics to create unified employee support will improve company culture, create a better
working environment.
 It Uncovers Skills Gaps
With the type and amount of data that HR analytics software has access to, it can use its algorithm to
easily determine what kind of skills organisation is lacking & identify any knowledge gaps.
 HR Analytics Increases Productivity
By utilizing the available tools, employees are better able to manage their time & work. HR
analytics platforms even give insight to significant interactions among employees & the
collaboration between various divisions.
 1)Access to quality data can be a problem for companies that do
not have up-to-date systems.
2)Smaller HR teams may not always have the statistical and
Disadvantages analytical skill set for working with large datasets.
of HR Analytics 3)It is possible to miss opportunities or derive untrue insights if
the HR team uses a complex tool and is not skilled in data
analysis.
4)If HR analytics tools having access to sensitive information do
not fulfill the right security standards, it could lead to potential
security issues.
 A CASE OF HR
ANALYTICS
• The organization under the study is privately owned medium size firm with employee strength of 310.
• The organization claims to be the one of the top organization in this business in the region. The organization
faces challenge of high turnover in middle level.
• The organization sincerely interested in knowing the reasons for employee turnover. HR of the organization
is asked to understand the problem and provide solutions.

• The following are the objectives set for the study:

• To understand how HR data could be integrated to draw meaningful conclusion on turnover.
• To explore how accuracy of HR data can help in making right decision.
• To explore how HR data can help in improving employee performance

• What would you have done if you were an HR in this scenario?

 The Solution
• Had I been the HR of the Organization, I would have tried to understand the key drivers of attrition.
• The HR in its measures to understand the given problem has tried following:

1. Feedback from employees leaving the organization

2. Feedback from existing employees
3. Reviewing of process and trying to make them more employee friendly

After all this effort, if the problem still would not have been solved, I would have decided to do some analysis
in order to collect HR data through various HR functions.
The HR data acquired contains the following details:

• EDUCATION
• DESIGNATION
• DEPARTMENT
• NATURE OF EMPLOYEMENT

To draw analytics on the given data and to achieve the set objectives statistical test was conducted. As per the
data available a conceptual outline was developed establish the relationship between the employee turnover
and the details available so as to draw meaningful analytics.
 Data Analysis & Interpretation
Table 1 – Department wise Attrition Department wise & Nature of
attrition Employment

The above chart and table shows the attrition among different departments. It could be seen that there is high rate of attrition
among employees in marketing department followed by finance department. This could be outcome of low cohesion within the
team. The above chart and table shows the attrition with reference to different Nature of employment (Temporary, Probation, and
Permanent). It could be seen that there is high rate of attrition among employees who are hired on temporary basis and similar
level of attrition is seen amongst permanent employees. It could be seen that there is attrition in Marketing department, followed
by finance department. This could be outcome of having less consistent HRM policies and practices.
 Suggestions & Recommendation
As per data collected and the analysis drawn, I would have provided the following suggestions :
The organization is facing a grave challenge of high attrition amongst the middle management level
employee is of soaring concern.
 Organizations tend to lose the employees to the competitors hence it is recommended to survey
competitors' practices in terms of compensation so as not to lose employees due to less
compensation.
 High attrition is seen amongst employees hired on temporary basis and similar amongst permanent
basis, in this case further analysis is required in terms of their compensation, performance etc.
 Employees in permanent category may leave the organization because of insecurity in their career
which has spill over effect on the temporary employees, hence organization can develop career
path for their employees.
 High attrition is also due to lack of effective Organizational communication with the employees;
hence the organization must improve on employee communication and develop process with
higher employee participation.
 Organization can adopt HR Analytics in different functions so as to create meaningful data and
draw predictions.
 Benefits derived of HR ANALYTICS
• HR analytics through its predictive nature help in understanding and exposing the
deficient practices that grow to be the key cause for attrition, which helps in retaining
and maintaining high worth employees.
• It makes possible the HR to exhibit its yield and accountability to accomplish corporate
goals
• HR analytics help in most advantageous Human resource planning
• It helps precise forecasting about employee needs and skill-set for achieving
organizational objectives
• It helps in sourcing the best possible potential suiting organizational talent requirement
for specific positions without bias.
• It helps in concise defining of vital performance part and bits which may have high
impact on the organizational performance
• HR analytics facilitate in administration and classification by and large all HR
activities.
 o So basically we learn first of all from this about HR Metrics and
CONCLUSI Analytics. Then discuss how they can contribute to organisational
ON efficiency and effectiveness.
o As we know metrics are data elements that contributes in analyses
What gets measured which provides information to decision makers in effective decision
gets improved .... making.
o These both activities ( HR Metrics & Analytics) provides no benefit to
organisation unless the managers utilizes the information obtained
from reports or metrics in effective way.
o Managers need to know that what metrics are important to them and
what are least important in preference and should align the HR
activities and employee practices with company objectives and goals.
o HR team must fully understand the directions of business.
 Bibliography

o HR Analytics: Understanding Theories and Applications by

By Dipak Kumar Bhattacharyya ( Book)

o People Analytics Case Studies with Business Impact by AIHR

Academy

o How HR Analytics Improve Performance by Tracy Smith,

Numerical Insight LLC.

o Effectiveness of HR Metrics and HR Analytics in the

Evolution of HR as a Strategic Business Partner by K. Sripathi
and C. Madhavaiah (Research paper)
 Group Members Contribution
 Aratrika Biswas (Roll 28): Basic idea about the topic and
research it on YouTube and on internet

 Swikriti Chanda (Roll 32): Power point presentation making,

design and finding matters for HR Metrics and it's types with
example

 Sandip Kumar Jana (Roll 31): Helping in ppt design with sharing
his points for HR Analytics topic

 Labani Dawn (Roll 29): Case Study finding and summarised it

 Ahtasham Noor (Roll 30): Case Study finding and finalize a

conclusion