HR Analytics in Corporate World

With the advent of information technology, data has become available at ease and readily accessible. Especially in the last few years, technology has been responsible to make or break companies. An upcoming expertise that uses this technology to a company’s advantage is Analytics and many companies are smart in realising the edge that analytics can provide.  Amongst the advantages that Analytics has brought are: it has helped reduce crime, detect fraud, reduce customer churn rates. In respect to human resources, keeping in mind the automation of many HR Transactions, HR Analytics could play a very important role in the recruitment and retention of employees as well as strategy analysis.  HR analytics is about the total quality of talent, knowledge and expertise to move an organisation forward and stay ahead of competition. It deals with measurement of return on human capital investment as well as measuring the impact of the HR managers in driving employee performance, productivity and in turn the profitability of the company. HR Analytics is an emerging discipline which has the capability of fulfilling a promise of becoming a great strategic partner. The most important aspect of HR Analytics is that HR professionals need to differentiate which measures matter for analysis. Another challenge for HR would be to understand when and how to apply each type of analysis. Today’s HR analytics tools not only enable managers to gain insights on current workforce performance, costs and services, but to also model “what if” scenarios to anticipate changes in business. But, firms need to follow some basic steps and emerging best practices to take full advantage of this next generation of HR tools. As per Boudreau and Ramstad, 2004 ; “HR Analytics include statistics and research design, but it goes beyond them, to include identifying and articulating  meaningful questions, gathering and using appropriate data from within and outside the HR function, setting the appropriate standards for rigor and relevance, and enhancing the analytic competencies of HR throughout the organisation”. The good news for HR Analytics is that the behavioural modelling tools needed to do the casual analysis are very well established. The people who know how to use these tools are not usually in HR is the bad news.  First, before looking at any BI or analytic tools, HR management and IT need to have a conversation on “What information do we need to run our business and make better decisions that we don’t have today?”  In addition, they must discuss, “What are the business processes, workflows and data definitions we need to put in place to generate that information?” This step is much more of a business discussion than a technology discussion.

In their “Trends 2009: Human Resource Management” report, Forrester analysts Paul Hamerman and Zach Thomas identified several trends relating to HR becoming more business focused, e.g. that core HR systems strategies will focus on master data, and that analytics will help HR become more strategic. A November 2009 paper on “HR Analytics: Driving Return on Human Capital Investment,”by CedarCrestone’s Lexy Martin identified similar trends, and laid out six steps to maximize success in deploying HR analytics:

1. Invest in Data Cleansing
2. Focus data and analytics on business results
3. Start with the end in mind
4. Plan for incremental deployment
5. Use data-driven business case
6. Manage Change

The future of HR Analytics looks bright but it depends on companies how they can take advantage. They will need to invest in the right people and tools to create a long term association with HR Analytics. 

Article by-

Sarthak Daing

2014-16 Batch