Inside the Mind of the HR Analytics



“Without data, you’re just another person with an opinion.” – W. Edwards Deming

Data is one of the most important resources available to organisations. Leveraging data, can help organisations to develop and create efficient systems to improve their business practices. While data analysis has been used across different departments, it is often overlooked for its applications in HR teams.

As part of our Inside the Mind of the HRD series, Line Vercammen, HR Auditor at Top Employers Institute, and Britta Fischer, Standards Analyst and HR Researcher at Top Employers Institute, acknowledged the importance of getting and analysing HR data. Their knowledge, which was firstly shared in an internal presentation, was essential to this article as their presentation informed many of the points that this article hopes to reach.  

We are regularly analysing the responses of Top Employers to understand how the world of work is changing on any given day. In our latest survey and in the validation sessions, HR Auditors at Top Employers Institute saw that some leading organisations are experimenting with predictive & prescriptive people analytics. With this kind of analytics, they get a prediction of the future via data analysis. That gives them more insights into the specific actions that need to be taken to achieve a certain goal.

An important question is if other companies, who have not yet began to work with their data, feel ready to ‘predict’ and look forward, instead of only looking back. Essentially, are more companies ready to break through the wall? 

Descriptive analytics are more common than predictive analytics. This analysis tool is applied by many Top Employers worldwide. Already in 2022, we noticed that 87% of the Top Employers are translating their people strategy into key HR metrics (and related targets). This number increased by 12% since 2020 and it’s bond to keep growing.

You can find out more about thie and other trend downloading, for free, our World of Work Trend Report 2024 at the end of this article!

These numbers and their noticeable increase begin to paint a picture of the growing role for HR analytics for leading organizations. The painting is, however, unfinished and for many organizations the painting is something that they are looking to improve.

The use of HR analytics goes across many of the expected HR tasks like reporting on talent acquisition KPIs, but it also can be used in more interesting ways that may include the tracking and analysing the employee experience.

What are HR Analytics?

HR analytics offers a systematic process to drive business decisions about people. It offers businesses a way to use their data to uncover, interpret and communicate meaningful patterns in work-force related data to inform decision making while improving performance.

HR analytics cuts across the business and encompasses a data-driven solution for HR leaders to gain insights into the whole business. For this to succeed, there is a strong need to encompass a data-driven culture at the organisation level. We can see this in the number of Top Employers that have leaders that are committed to using HR analytics to make their decisions about their workforce.

While many organisations are beginning to embrace HR analytics, many are not getting the most out of their HR analytics because they are not yet at a stage where they can analyse them. In fact, many businesses are still merely reporting their data and not taking the next steps in leveraging that data.

This may be because many organisations do not yet understand the difference between the two activities.

The Differences between HR Analytics and Reporting Data

One way to explain the difference is to recognise that reporting summarises and organises data in easily digestible ways while analytics enables questioning and exploring that data further.

Where reporting focuses on reportable data, analytics is seeking to look at several points in the data to see if there is a link and do more work to uncover why the data is the way that it is. Reporting is a full stop, whereas analytics is an open question that can inform business decisions and strategies from a place of knowledge.

Three Ways Businesses can Integrate HR Analytics to their Benefits

Businesses need to move beyond merely collecting data and begin analysing the data if they are to move beyond the what and begin to explore the why.

This can be done in a variety of ways, but in this article, we will limit our exploration to three:

1. HR needs to develop an expertise in their team to analyse the large amounts of people related data. This can be done by welcoming new members in their team that have a knowledge base that favours them proactively leading their team to analyse the data within their organisation. Organisations can also upskill and reskill the workforce in theri HR team so they do not leave anyone behind in the journey that their organisation will undertake in leveraging the HR data.
2. Businesses will need to select relevant analytics software that they will be able to integrate across the organisation. The integration of this software is especially important in large multinational organisations as the data they will uncover may be more far reaching than their local workforce.
3. HR teams will also need to embrace the ongoing and continuous collection and analysis of data. That is because data, and the patterns that can be drawn from it, is only effective if it is incorporated as a task that they do throughout the year.

HR Leaders and team members are beginning to understand that data-driven analysis is no longer a nice to have but an essential part of the business to improve decisions around their workforce.

The challenge, for HR leaders, is to adopt the use of HR analytics in their organisation with the right tools and an enthusiastic team that will lead them to have analytics that allow them to make strategic workforce decisions to improve their business performance. This can only be done with clear insight as they undertake this exciting work.

Learn more about the trends in people practices: download now our World of Work Trends Report 2024 for free.

People Strategy: from talent management to strategic workforce planning

What do HR leaders need to consider when creating, or recreating, their people strategy?

Leading organisations across the globe are forced to transform rapidly – and continuously – in order to remain purposeful, relevant and stay ahead of competition. This in turn means that the very definition of people strategy is itself evolving at pace. The role of HR leaders is changing too, and the number of challenges they are asked to solve is increasing. Most likely, when answers are found, the questions themselves will change. 

Despite these complexities, it’s worth unpacking the concept of people strategy in terms of definitions, roles and challenges a little better. 

People strategy: three definition that you need to look at

People strategy has a myriad of different definitions – it depends what you read and where you look. Top Employers Institute’s HR experts and auditors propose three broad lense.

1. Invest in talent

Let’s first look at people strategy through an investment lens. In this sense, it is seen as a battles for talents. If an organisation matches its investment in talent to business objectives, it is more likely to get the right people with the right skills focused on the right initiatives. The return on investment that this then creates will drive the business forward and accelerate results.

2. Align hr strategy with business strategy

The second lens defines people strategy in relation to its alignment with business strategy. To think in terms of alignment allows us to ask important questions, such as “What capabilities do we need?” and “Where do we need them?” This simple approach sharpens our understanding of the gaps (or overlaps) in aligning our strategic workforce planning and other HR strategies to the business needs.

Our research shows that 97% Top Employers demonstrate the importance of aligning their people strategy with their business strategy. Yet it is worth noting that only 77% of Top Employers translate their people strategy into key HR metrics and related targets.

3. People strategy is the business strategy

The final lens moves beyond alignment to the complete integration of a people strategy within the business. By this definition, your people strategy IS the business strategy. Here, forward-looking leadership teams explicitly reject thinking about their people as assets.

Rather, it is the employees who are the “investors”: they call the shots and choose to invest their precious time, energy and talent. It is the organisation that needs to work hard to keep them engaged and motivated.

Leadership cannot take their talented employees’ hard work and commitment for granted.

A strategic role for the HR leader 

The definition of people strategy vary greatly across organisations of different shapes and sizes, but research from the Top Employers Institute global survey shows that HR leaders are taking on a more strategic role. In the past, business strategy has been driven largely by the CEO and the CFO. This has been because the twin drivers of organisational success were firmly rooted in strategy and finance. 

Now, however, organisations are increasingly moving from this “Dynamic Duo” to a “Transformative Trio”. According to the Harvard Business Review (HBR), the CEO and CFO are being joined more and more regularly by a CHRO who together need “to fuse the strategic, financial and people issues into business strategy”. 

Challenges and priorities in people strategy

To play their full role in the triangular alliance with CEO and CFO, there are four challenges that the CHRO needs to meet:

1. Being able to look ahead and identify strategic workforce challenges that will come about as a result of the changing business world.
2. Creating talent supply chains that can support innovation and growth.
3. Developing the talent management skills of business leaders.
4. Provide employee insights through greater use of metrics and analytics to show the effectiveness of their people strategy.

Significant data obtained from 1.679 certified Top Employers organisations globally, closely resembles the challenges set out in the HBR. When asked to rank their Top HR priorities the majority of Top Employers indicated:

1. Supporting cultural and organisational change;
2. The development of talent strategy;
3. Leadership development;

And the role of technology in providing metrics and analytics within all HR disciplines is, according to Top Employers Institute research, moving up the priority list for HR leaders as way of underpinning significant  changes in people strategy that we are seeing within so many of our Top Employer organisations. Amid the changing HR landscape, the need and the consequent move towards a broader and more holistic scope of people strategy is obvious.

It is no longer something that only focuses on talent management but encompasses strategic workforce planning to future-proof the skills and capabilities gaps and is supported by concrete metrics and the likes of predictive analytics.

As a result, HR leaders are also expected to devise and execute people strategies that align with the current and future business needs.

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