4 reasons why HR analytics is critical for a successful HR department

If there’s one thing that just about every HR team of a large organisation will have plenty of, it’s data – in fact, most companies will be absolutely swimming in it; especially if the company is well-established or has a large workforce of say, over 500 employees.

But here’s the thing: when companies have huge volumes of tabular data, how can they get real value from it? There are many pitfalls when it comes to analysing data, but luckily for busy HR teams, HR Analytics is on hand to make the process a heck of a lot easier and more accurate.

So, what is HR Analytics?

We recently wrote about the importance of Big Data when it comes to helping you identify possible causes of staff turnover, and that evidenced-based decisions require a lot of accurate information – or big data. These all-important evidence-based decisions also demand the tools that can interpret that data in a way that makes it meaningful and easy to act on without creating huge amounts of additional work for HR teams. This is where HR Analytics come into play.

hr analytics graphs success win

HR Analytics (or People Analytics) is about It’s hugely important in a data-driven world as good quality HR analytics can assist business leaders and HR teams build truer pictures of their historic, present and future workforce data – ultimately leading to more informed decision making and better business outcomes.

In absolute basic terms, HR Analytics shows complex data in easy-to-understand visual formats so that HR professionals can easily spot the patterns and trends within their workforce data, and then use that information to make more accurate decisions. Basically, a bit like what a weatherperson does when they present the evening weather forecast: they’re using huge volumes of data from their supercomputers to give a visual representation of what they believe the weather will do based on historic and current data.

So, we know what HR Analytics is – but why is it critical to the success of your HR team every day?

1. You can make better HR decisions backed up by hard data

First and foremost, HR Analytics can lead to HR teams and organisations making better business and strategic decisions. This is because HR analytics can alert HR to potential problems, so rather than them having to analyse the hard data the hard way, they are alerted to potential data anomalies or trends that they can then investigate. With analytics, you’ll find it easier to identify patterns in data, and then investigate the underlying data from different angles in an easy and intuitive way.

Like we mentioned earlier in this blog, having Big Data is essential to help you make informed business-critical decisions – but it doesn’t guarantee you’ll be able to draw actionable insights; and this is where many organisations can encounter difficulties or can miss key underlying data you wouldn’t necessarily spot from just using the headline figures.

Also, given that many HR teams can often face busy and challenging days, HR Analytics helps remove some of the burden that comes with data analysis. Correlating huge amounts of HR data and then trying to manually identify patterns and trends can be a tricky and time-consuming business; but by using HR analytical tools, your HR teams can easily visualise patterns and trends and start asking the questions needed to understand why the patterns and trends exist.

Less time lost, less stress caused – it’s really a no-brainer!

2. You can create more engaging and effective business cases for HR interventions and workforce strategies

Be honest: do you like sifting through pages and pages of data, or sitting through data and number-heavy presentations? Probably not. But unfortunately, it comes with the territory of having to report on and create strategies involving data. However, HR analytics can make the whole process a lot more engaging for everyone…

Good quality HR Analytical tools will allow you to create reports that are not only data-intensive and accurate, but also visually engaging – making it much easier for HR teams to present data that is easier to understand, and creates real impact. Plus, for those key stakeholders who may not deal with data, it turns potentially complex data sets into easier-to-digest formats that anyone can understand – meaning a better chance of business cases being agreed, and strategies or interventions being developed. Speaking of which…

3. You can effectively test different interventions and monitor their success

Another great thing about HR analytics tools is they can help you track how effective your interventions are.

For example, let’s imagine that your data is indicating that there are higher rates of staff absence amongst one department compared to others in your business. Using analytics, you can slice and dice your data to see if you can uncover potential causes, such as a jump in a specific type of absence. Once you’ve decided on the strategy or intervention you feel is appropriate, its effectiveness can then be accurately measured over a set-period of time.

This type of testing and monitoring can be really effective, as it means your managers and HR teams can make small, incremental changes and gauge their effectiveness – rather than making sweeping strategy or personnel changes which can take time to achieve. For example, you could uncover similar problems across different and unconnected parts of the business, but only want to look at fixing it in one place; then, using the outcome from that to test whether the solution worked before rolling it out company-wide.

4. You can ensure HR is seen as a key strategic partner

Lastly, because HR analytics and insights offer tangible and data-driven evidence on aspects of your workforce, HR teams no longer have to potentially waste endless hours manually collating management reports or trying to derive value from hard-to-read reports. Instead, analytics equips them with a tool that helps them thoroughly investigate data and reach informed decisions that are built on solid facts; making it easier for them to win backing from the business, and take a strategic and evidence-led approach to tackling often complex but business-critical issues.

When your HR teams are armed with the tools they need to analyse data effectively, they can play a direct part in helping to maximise the potential of your people and removing the barriers to strategic and tactical success; not just deliver transactional functions such as payroll or absence reporting.

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