People drive business through HR Analytics

How does HR Analytics help in solving people centric issues and drive business?

The rapid advancement of information technology has sparked a digital revolution, with organizations taking advantage of big data to address previously unknown opportunities (Wamba et al., 2015; Wamba et al., 2017; Dubey et al., 2019; Kim et al., 2021)

Workforce analytics is the process of using data-based intelligence to improve and enhance decision making, like managing and hiring top talent, aligning compensation with performance etc. It leverages “big data” to make informed workplace decisions and predictions.

Systems can add more advanced analytics and reporting modules to predict short- and long-term workforce trends by incorporating big data, business intelligence and statistical applications (Kapoor and Sherif, 2012; Stone et al., 2015; van den Heuvel and Bondarouk, 2017; McIver et al., 2018; GarciaArroyo and Osca, 2019; Mikalef et al., 2019)

HR analytics follows a linear three-stage maturity model.

1. Descriptive analytics

HR analytics focuses on using HR technology to generate reports and dashboards to answer questions concerning what has happened and helps them gather and analyze data that describes the current state of things or past events.

2. Predictive analytics

stage utilizes statistical techniques, advanced algorithms and machine learning to anticipate what might happen in the future and why and helps in anticipating future outcomes and values based on the analysis of current and historical data. It uses statistical techniques like data mining and machine learning. Organizations use predictive analytics to optimize operations and improve the employee experience. AI can predict when the organization may experience talent shortages. This can help HR professionals take proactive measures (Vamsikrishna Bandari, 2019)

3. Prescriptive analytics

determining the optimal action that should be taken in response to the analysis. Gives suggestions on what to do based on predictions and what had happened in the past. This approach is exceptionally profitable for organizations with busy seasons.

Different types of HR analytics for better business insights

Employee Engagement

Training Efficiency

Churn Rate (reflects the healthy culture of your workforce)

Why organization should invest in HR Analytics

Transparency

Get visibility into processes and results that once used to be murky

Improved Monitoring

Leaders can monitor the inputs and outputs of their pre-post-employment hiring processes to track progress against benchmarks.

Forecast

The historical data and modern trends help business leaders in asking relevant questions and determining potential business impact. Forecasting enables business leaders to assess if any change is sustainable for their business.

In contrast, analytically mature HR departments will utilize HR systems and various platforms but will integrate them with more advanced forms of HR technology (e.g. business intelligence (BI) tools, AI-enabled platforms, open-source statistical packages) to enable predictive and prescriptive data analytics.

This raises the question of whether the use of more advanced HR technology leads to more insightful HR analytics. And if so, how significant are these insights compared to those derived from basic level technology?

To be continued...