Inside the Mind of the HRD... 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 in 2022. 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. When looking at the results of the survey from 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. In order to convert insights out of HR metrics into clear actions, 87% of Top Employers indicate that members of their HR team are trained to support the business leaders in this (also an increase of 12% compared with 2 years ago).
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:
- 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 members of their existing HR team so they do not leave anyone behind in the journey that their organisation will undertake in leveraging the HR data.
- 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.
- 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.
If you would like to learn more about the trends in people practices you can download our World of Work Trends Report 2022 now or watch our insightful webinar with Saint-Gobain where they looked at how data can support talent management.