HR Analytics
Introduction
The initial perception about HR in the business
organizations as an expense resulted in the adoption
of quantitative methods.
It is defined as “the application of methodology and
integrated process for improving the quality of people
related decisions for the purpose of improving
individual and/or organizational performance.
Organization needs data that is usable to adopt HR
analytics.
Questions HR analytics can help answer include:
What are the patterns in employee turnover?
What level of performance should I expect from new
hires?
Which employees are likely to leave within the next 6-
12 months?
What salary should be provided for a new job role?
How much investment is needed to enable employees
to be fully productive?
The data that has ability to provide material for
meticulous analysis that successfully explains the link
between behavior and outcomes.
It comes from HRIS
HR departments have data of employees as well as of
those people who applied.
They typically comprise the information of employees’
demographics information,
skills,
employment history and
also of those who are not hired.
They record data routinely regarding
a. hours worked,
b. pay,
c. information on training and development,
d. grievances,
e. capability and
f. disciplinary cases,
g. dispute resolution,
h. internal communication,
i. staff attitude survey information and
j. appraisal.
Further, they can get this data combined with bigger data from
emails, communication and geo-location data of employees in
the field for the analysis.
However, HR analytics is not all wholly about
quantitative analysis.
It requires certain mental framework.
Hence according to Fitz-enz and Mattox II (2014), it is
“first a mental framework, a logistical progression and
second a set of statistical operation”.
Importance of HR analytics
Its main function of relating HR determinants to
performance of the organization.
It is just not a hypothetical assumption. It is rather
supported by empirical research.
Organizations that implemented data analytic-driven
decisions performed two times better at predicting
outcomes.
They were thrice good at predicting risks.
Moreover, they increased their performance by 5 - 6%
It attempts to improve individual as well as
organizational performance.
It examines the effectiveness of HR policies and
practices and identifies the areas where effort, resource
and budget fail to produce theory intended impact.
It enables the HR department to be a strategic partner
in the organization.
Analytics is divided into three levels:
1. Descriptive.
Traditional HR metrics are largely efficiency metrics
(turnover rate, time to fill, cost of hire, number hired
and trained, etc.).
The primary focus here is on cost reduction and process
improvement.
Descriptive HR analytics reveal and describe
relationships and current and historical data patterns.
This is the foundation of your analytics effort.
It includes, for example, dashboards and scorecards;
workforce segmentation; data mining for basic patterns;
and periodic reports.
2. What is Diagnostic Analytics?
Diagnostic analytics takes descriptive data a step
further and provides deeper analysis to answer the
question: Why did this happen?
Often, diagnostic analysis is referred to as root cause
analysis. This includes using processes such as data
discovery, data mining and drill down and drill
through.
3. Predictive.
Predictive analysis covers a variety of techniques
(statistics, modeling, data mining) that use current
and historical facts to make predictions about the
future.
It’s about probabilities and potential impact.
It involves, for example, models used for increasing
the probability of selecting the right people to hire,
train, and promote.
4. Prescriptive.
Prescriptive analytics goes beyond predictions and
outlines decision options and workforce optimization.
It is used to analyze complex data to predict outcomes,
provide decision options, and show alternative
business impacts.
It involves, for example, models used for
understanding how alternative learning investments
impact the bottom line (rare in HR).
