From ages HR professionals have been considered as data collectors, amassing and keeping track of employees’ personal information, salary rates and the annual number of retirements. But with the worldwide economIc conditions and employee ecosystem changing dynamically, HR has taken a very crucial role in the mind of the business leaders and now HR managers are also asked to contribute at various levels to foster success of the organisation. Hence the role of Improved HR Analytics is going to be crucial in future.
It is proven that lack of data and use of incorrect data may lead to some challenging situations for business and hence HR analytics is one of the key tool to calculate the direct impact of people data on various business outcomes. Below are some of the key reasons why every organisation must think about investing in HR analytics.
1.It helps to make a well informed business decision
HR Analytic tools gives a comprehensive reports on the various functions and the effective utilisation of HR resources. This will allow the business owners to understand the key drivers required to keep the pace with the changing business environment without compromising on quality and resources. For example the employee salary is one of the component which makes half of the companies operating expenses and as the organisation grows this operating cost can become a reason of concern. In such cases, HR analytics can help to draw some well informed decisions on how the productivity of the employee workforce can be increased and vis a vis top line. With HR analytics in place, decisions such as whom to recruit, whom to retain, whom to train can be well planned based on available data and organisations can gain a competitive edge in the market.
2. Drawing correlations between business data and people data
It is highly important to draw a correlation with the data available. HR analytics helps us with the relevant data and a logical correlation can be drawn among the data available. It is proven that organisations who are able to pull the relevant data together and make some key decision regarding the future investments in HR strategies by drawing the relevant correlation grow faster and stands high on employee retention chart. The caution is that correlation may only help to represent coincidences between people data and outcome. The HR strategies based on this needs to be smartly devised.
3. Benchmarking new heights
To be at-par with the competitive environment is always a challenge with many organisations and employees of the organisation play the critical role in gaining that competitive advantage. The HR processes and People within the organisations are the mirror of the business and it is important to do benchmarking to be well ahead of time to ensure that best of the practises are followed. A smart HR Analytical tool will help in identifying some key factors in relation with HR and employees; particularly with employee satisfaction, key people practises, compensation etc and help to benchmark an orgnaisation with the competition outside. And a good benchmarking with outside world will help in to draw a better ROI in longer run. HR team can always keep refining the people strategies and process basis of this knowledge and set the new heights for an organisation leading to new heights of growth and higher perceived value for the organisations.
4. Conduct effective cause effect analysis
Based on HR analytics , there may be many effective strategies implemented. Not necessary that all will fail or all will succeed. However, the HR analytics will help to an indepth and effective cause effect analysis for any outcome. This will help to refine the strategies better or to eliminate some of those for future benefits. Basis of this cause-effect analysis the HR function can implement a practical approach to help executives make the right investments and take practical initiatives. These approaches make an educated, predictive assessment based on facts and data.
To summarise HR analytics enables not only a view of the workforce today but offers true insights that can drive talent-related decisions and actions, resulting in improved performance in the future.Today, organizations can drive financial return on human capital investment and improve the value the workforce delivers to organizational performance through the use of improved HR analytics.