The right talent is a double-edged sword. It is an organization’s biggest asset and often ends up being a substantial cost. But this cost could prove to be even more expensive if people processes like acquiring the right talent, managing it, and retaining employees aren’t fully optimized to meet wider strategic goals.
To gain complete visibility of the human resource lifecycle right from attraction to termination of talent, HR practitioners need to be able to access and understand the processes involved at a granular level using data.
Optimizing Data Using HR Analytics
A fair number of organizations still track their human resource efforts by manually inputting data into spreadsheets. This approach to capturing, managing, and analyzing data is time-consuming, error-prone, and worst of all, very limited in the level of insights it can offer.
HR Analytics, also referred to as Workforce Analytics, Talent Analytics, and People Analytics uses analytical software that collects and analyzes HR data to improve an organization’s workforce performance. This form of data analysis takes employee data collected by HR teams and correlates it to human resource-related, enterprise-wide objectives to measure the performance of HR initiatives in contributing to organizational strategies and goals.
It helps calculate the Return-on-Investment (ROI) for workforce-related decisions and also provides insight on future workforce planning which is what makes it worth implementing in every organization.
However, given that HR Analytics is related to many areas of an enterprise at large, its effective use requires a wider commitment to full-scale data-collection, reporting, and analysis on multiple levels within an organization.
Strategic Insights Gained from HR Analytics
With access to sufficient data points, HR Analytics can dive deep into data and unearth strategic insights to support decision making related to an organization's workforce. It can help -
- Identify the number of open positions in a specific period based on manning during that period and zero in on regions and verticals contributing the highest to the number of Total Open Positions.
- Identify open vacancies and measure the number of new vacancies from those carried forward with reasons for increase i.e. opening of new branches or attrition.
- Measure Hiring Efficiency based on the time taken to fill a position and the corresponding decrease in hiring costs.
- Compare hiring costs among regions and versus a benchmark. Also, help identify recruitment sources such as employee referral and placement agency services that proved useful in lowering hiring cost.
- Measure attrition rate, regions with the highest contributions, and supervisors under whom resignations have been the highest.
- Identify Underperforming Supervisors, details related to their verticals and corresponding employee satisfaction scores and number of exits.
- Identify effective job marketing channels and strategies for revenue contributing roles and senior management profiles.
- Quantifying ROI for employer talent acquisition efforts.
- Testing effectiveness of an organization’s brand appeal and talent acquisition capabilities to target talent demographics.
- Identify recruitment sources (placement agencies, job portals, employee referral programs) that result in hiring candidates with the highest performance levels.
- Identify competitors that easily provide the best hires.
- Identify reasons for employee turnover and solve policies- and personnel-related issues responsible for the turnover.
- Identify internal hiring policies, practices and people negatively affecting the diversity levels in an organization.
- Identify factors such as company performance, brand strength and employer brand positioning influencing top employees to choose certain competitors.
Key Benefits of HR Analytics
Analytics should accompany HR efforts because HR Analytics benefits talent outcomes in the following ways:
HR Analytics helps enterprises collect, store and use employee data efficiently and drive business productivity using talent data as a key input.
A data-driven approach reduces the need for organizations to rely on gut or instinct and can depend on accurate and actionable insights for decision-making.
Employee retention can be improved due to better visibility and understanding of reasons for employees to stay or leave an organization.
Recruitment and hiring can be better aligned to match the organization’s requirements for certain skill sets by analyzing the data of current employees and potential candidates.
Patterns and trends in workforce data can lend itself to forecasting and future recommendations, helping organizations act proactively in acquiring and retaining the right talent.
Fusing People and Technology Using People Analytics
The 2020 Deloitte Global Human Capital Trends report traces workforce metrics through the years (2011-2020) highlighting the growing use of People Analytics, with the building of analytics teams, purchase of analytics offerings, and development of analytics solutions.
“Developing a predictive view of human capital is the next step in the evolution of People Analytics that has been gaining momentum over the past decade. Our inaugural report in 2011 exhorted organizations to “move beyond instinct, gut, and tribal wisdom in making work force decisions,” pointing out that organizations not using data and analytics to manage their talent risked losing their competitive edge.
2012’s “Seeing around corners,” 2013’s “Thinking like an economist,” and 2014’s “Talent analytics in practice”continued to track organizations’ sometimes halting progress toward developing robust people analytics capabilities—which, as we described in 2015’s “People data everywhere,” were beginning to be augmented by the availability of external as well as internal organizational data.
By 2018, organizations’ increasing sophistication in people analytics was enabling them to do far more with their data, prompting us to caution readers, in “People data: How far is too far?,” not to neglect the ethical and security concerns related to the expansion of worker data and analytics.
But people data, as we discuss in this year’s chapter, can only get organizations so far if they fail to ask the right strategic questions. The challenge for organizations today: to find new questions and new workforce metrics that can illuminate a path forward for leaders in an uncertain world.”
The ability of the HR function to demonstrate ROI on its analytics efforts is empowering organizations to invest in People Analytics.
In the Real World
When looking to add HR Analytics capabilities to your organization, you should zero in on
- reasons why you are opting for analytics capabilities
- what you hope to achieve with this investment
- how you want to optimize your data - using a standalone solution or an integrated plugin
HR Analytics is proving to be a real game-changer for organizations leveraging it to outperform their peers in talent acquisition strategies.
A case in point is the use of our self-service analytics BI tool, Phrazor’s, built-in Machine Learning, and Natural Language Generation capabilities by the Talent Acquisition Team of a large private bank in Asia.
If you are interested in exploring a customized solution relevant to your firm, contact us