Even the most brilliant business plans require capital - not just in the form of financial investment, but arguably more importantly, a sound workforce to build human capital. The Human Resources (HR) department plays a critical role task in acquiring top talent, managing employee needs, and retaining staff.
While research and acumen are important in managing these segments, HR analytics is becoming a prominent methodology in the evolving workplace. This approach utilises statistical and quantitative analysis, as well as predictive modelling to help organisations make better and more informed decisions about their workforce. By tapping into some of today’s leading technology and algorithms, HR practitioners can now incorporate data-driven analysis to improve employee performance, retention, and overall productivity.
HR analytics not only introduces new and relevant metrics to refine HR process, but it can expedite it by reducing manual steps such as resume screening. Here are several ways in which data analytics is helping HR professionals perform their jobs more effectively.
HR Analytics – The Key to Efficient Talent Acquisition
In today's business landscape, companies are under constant pressure to stay ahead of the curve. Google and Meta have demonstrated this example in an unorthodox way, by over-hiring just to hoard and keep talent away from their competitors.
While this strategy is unfeasible for most companies, it underscores the importance of talent acquisition. By using data-driven insights, HR professionals can optimise hiring processes in several ways.
First, automating certain aspects of the recruitment process can save time and resources through the implemention of a digital system that can be easily managed by having algorithms filter through information to streamline processes. Automation can also eliminate bottlenecks in slower areas, such as delayed response time to candidate inquiries, by providing automated responses or surveys to improve their experience.
HR can reduce the effort required by using machine learning algorithms to screen resumes and identify the most qualified candidates for interviews. Predictive modelling and analysing factors like previous job performance, education, and personality traits can assist HR to assign candidates to roles where they are most likely to excel, which can improve job satisfaction and retention.
HR analytics can also help HR professionals improve diversity and inclusivity in the workforce by analysing demographic data to identify areas of biases and help HR teams develop strategies to attract a more diverse pool of talent.
Finally, HR analytics can use data on various metrics such as employee turnover rates, growth projections, and other factors to forecast future hiring needs. This can assist HR practitioners in identifing gaps while developing proactive hiring strategies to meet emerging trends in the marketplace, positing their organisation ahead of the competition.
HR Analytics – How it Boosts Talent Development
Once employees are hired, HR analytics can also support talent development efforts. Employee training is crucial in achieving employee satisfaction at work,as shown in reports such as the 2022 LinkedIn Global Talent Trends. By analysing individual performance data, HR can identify areas for improvement and provide targeted training programmes that encourage personal growth and also benefit the organisation.
HR analytics can also support talent development by identifying high-potential employees who are ready for leadership roles. By running employee performance data through specific algorithms that analyse and identify exceptional staff displaying specific capabilities or aptitude traits, HR professionals can then offer them opportunities for more significant responsibilities within the organisation.
HR Analytics – How it Improves Employee Engagement
Employee engagement is another area where HR analytics can play a significant role and is often linked to business transformation. The Human Impact of Business Transformation research project conducted by Business Insider interviewed 128 enterprises that underwent transformations between 2016 and 2020, and leaders from IBM, Gensler, and Huge named employee engagement as a key factor to success.
By analysing data on employee satisfaction, HR professionals can identify areas where employees are dissatisfied and take steps to improve their work environment. This can be achieved through feedback surveys, performance reviews, tenure, performance, and other benefits, allowing HR to scrutinise areas of lack and enhance the employee experience.
In the same way, HR analytics can also use that same data to identify employees who are likely to leave, and take proactive measures to retain them.
HR Analytics – How it Strategises Your Workforce Planning
Finally, HR analytics can be an invaluable tool in workforce planning. By leveraging data to analyse workforce trends and predict future needs, HR professionals can create more effective workforce plans that align with the organisation’s objectives. As business goals evolve, HR can also quickly run predictive models to anticipate talent crunches and plan for timely recruitment, enhancing the company’s competitiveness by adding agility to adapt to the rapidly evolving landscape.
Some of the data can also be used to help predict job vacancies and prevent lapses by examining metrics like employee turnover and retirements. Workforce scheduling is another component that can benefit from HR analytics. By analysing employee availability data, HR can gain insights into scheduling requirements, allowing for the creation of efficient schedules. For example, aligning staff numbers to the busiest hours for a retail store. By analysing data on employee availability, the department can create optimised schedules that also promotes fairness for all employees.
As HR continues to evolve, the importance of HR analytics is becoming increasingly important to make data-driven decisions about their workforce. By leveraging data points and sophisticated metrics, HR analytics helps to derive deeper insights into workforce dynamics and supports strategic decision-making across a range of HR functions, including compensation, benefits, and compliance.
However, as powerful as it can be, a recent study undertaken by Dr. Alec Levenson from the University of Southern California highlights the industry’s lack of skilled professionals in this area, with only 3% of HR practitioners capable of performing advanced multivariate analyses. This may explain why there is a growing demand for Certified HR Analytical Professionals courses to meet this need, and how programmes such as SMU Academy’s HR Analytics Certificate – Using Analytics to Improve People Decisions and Analytics for Management Decisions can leverage on employee and other data to help management make objective HR decisions.
As more affordable software tools and cloud-based solutions become available in the market, companies can more easily deploy HR analytics to build a talented workforce. By including HR analytics as a critical tool, HR professionals can navigate challenges and opportunities in the modern business landscape and make better strategic HR decisions.
Secure the talent you need and keep your workforce competent. Equip yourself with HR Analytics and prime your human capital with SMU Academy.
