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Everything You Need to Know About HR Analytics

HR analytics is a relatively new field that focuses on the HR department and its role in human resources management. It is often used to evaluate HR policies, programs, and practices. It also provides data for strategic business decisions such as workforce planning and HR budgeting. Read on to see everything that you should know about this invention. 

What is HR analytics?

HR analytics is the process of using HR data to make better decisions. HR professionals use people analytics to understand how their HR programs and policies impact worker productivity, retention rates, and employee engagement scores.

The goal is always for HR departments to focus on what matters, making sure that employees are happy and productive at work, so they’re more likely to stay with the company. 

HR Reporting & Metrics vs Workforce Analytics – What’s the Difference?

For years, companies have relied on traditional reports for HR data analysis. Things like turnover rates, absenteeism rates, the average length of time spent working at a particular job function, etc. These reports provide valuable information about what’s happening inside an employee population, but not enough detail to answer specific questions that HR needs to answer.

HR analytics, on the other hand, allows HR professionals to dig deeper into HR information and data sets, so they can understand how people are performing in their roles at work.

HR analytics is most effective when companies focus on metrics that align with company goals. Instead of focusing solely on turnover rates or average length-of-service per job role, employees should look at more strategic KPIs.

Why do companies need it?

Companies need HR analytics because it helps them take better HR decisions. HR can be a tedious job in any company, and having to go through heaps of data every day just makes the process even more difficult. These units need time-saving tools that will help them cut down on their workload, while still producing accurate results for easier decision-making purposes.

Here is a list of ways how HR analytics help HR teams to work better:

  • HR analytics helps HR teams reduce the time they spend on collecting data for reports.
  • HR can create its own reports to filter out unnecessary information that might not be useful. This way, only relevant details are available for decision-making purposes.
  • These units do not need to rely just on managers’ opinions when it comes to issues and concerns with employees, since HR analytics is based solely on numbers, which makes these results more accurate than ever before.

How to collect data for HR analytics?

The process of collecting data for HR analytics will vary depending on the data you are looking for and who is going to use it. Typically, HR analysts gather it from HRIS systems or employee surveys in order to analyze the movement of employees within a company over time.

While this information can be useful because it shows how many hours were worked by department, what percentage of workers took sick leave during a given period etc., there could also be other questions that HR professionals want to be answered about their workforce.

In some cases, companies may find themselves collecting more data than they actually need in an effort to answer every possible question about their operations, which would ultimately lead them down a path towards using HR analytics inappropriately.

It’s important not only for companies but for people designing these processes as well to understand which questions HR analytics are here to answer.

Why is HR analytics data important?

It’s very important for a company to have HR analytics data, and HR professionals should know what that means in order to use it properly. It is important because, without the information that HR collects about employees, it would be very difficult for a company to make decisions regarding how they operate.

The HR department uses employee data to compile reports which are used by other departments within the business including executive management, sales, marketing, and finance. Having this information enables decision-makers from different areas of the organization to work together more effectively, as well as making better-informed choices on strategy development and resource allocation initiatives based on facts rather than speculation or guesswork.   

HR analytics informs organizational leaders about their talent sources (where people come from), workforce composition (who works at an organization), labor market insights (how much people are paid, what skills they have, etc.), HR activities (what HR is doing), engagement levels (how engaged employees are) and HR policies.

Without this information, it would be very difficult to make decisions that benefit the company as a whole because you wouldn’t know how your business compares to other similar businesses in terms of talent sources or workforce composition, for example.

What is the data collected from HR analytics used for? 

The use of HR analytics is very broad and can be used in many different ways. HR analytics data could help inform HR departments on issues such as; the number of employees that leave a company, or how to save money by streamlining HR processes like onboarding new hires.

It can help companies improve productivity by finding these HR processes that are not working, and then coming up with solutions for improvement.

The HR department can use HR analytics to inform employees of their skillsets compared to the rest of the workforce. This is done by analyzing data on how different job titles within a company compare against each other in terms of salary or number of years worked there.

Protecting your employees’ privacy while using HR analytics 

A major concern about HR analytics is how to protect the privacy of employees. It can be used to track and monitor employee data, such as their location, time off work, or even how many times they use the restroom during a shift. There are laws that state you cannot record someone without them knowing about it (such as recording phone calls), but sometimes HR analytics do not fall under these rules.

employees' privacy

HR professionals should always make sure all employees fully understand what this type of monitoring is and how the information will be collected and stored before using this tool in your business. This way there won’t be any issues with compliance later on down the line.

HR managers must also consider if HR analytics fits within their company culture because some firms may prefer other methods over monitoring staff members’ performance through software instead of talking face to face. 

HR analytics has become integral in modern businesses and almost everyone is using it now. It’s important that both you and your employees are aware of what it is, that it’s used for, and how it gathers data. It’s crucial to explain how helpful it can be as well as for you to protect the privacy of your most valuable assets. Once you know all this, there is no reason to embrace it!

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