The power of analytics continues to drive business decisions and the human resource department is not an exception. In fact, some of the most important decisions that your business will make have to do with the quality of people you bring onto your team to help support the work of your business. HR does have a responsibility to be people-focused and will continue to rely on the human touch reliably hire the best candidates for your business, but that doesn’t mean that the data should be ignored.
Techopedia refers to HR analytics as, “Human resource analytics (HR analytics) is an area in the field of analytics that refers to applying analytic processes to the human resource department of an organization in the hope of improving employee performance and therefore getting a better return on investment.”
If HR analytics is an important function of businesses and a necessary part of HR operations, how can you successfully implement an HR analytics plan and process at your organization?
The steps for undertaking an HR analytics strategy
1. Figure out what data will be relevant
The data and analysis of HR analytics are ultimately meant to help you better figure out what strategy you need to take when hiring, training, and retaining talent to grow your business. To best understand what data is relevant to that, you need to understand what your business goals are and how HR plays into that bigger pictures.
2. Find the right tools
Technology continues to evolve and more data management and analytics tools are developing and becoming available. The right tools are absolutely crucial to enabling your analytics strategy. Because of how many solutions are becoming readily available, many developers and software companies are allowing businesses to trial their services and see if they’re a good fit for your business’s needs and easy to use for your employees.
3. Have the right help
Whether it’s an internal employee or outside contractor, all the data, data gathering tools, and reporting won’t help your business without someone to interpret the data. The Harvard Business Review Research s found that “47% of companies believe one of the biggest obstacles that an organization faces when it comes to ‘achieving better use of data, metrics, and predictive analysis by HR and talent management professionals’ is having a lack of analytic acumen or skills among HR professionals.” That means that having the people with the right capabilities and skillsets is key in making the most of your HR analytics. Some things to look for in an HR professional who can handle analytics would be:
- An understanding of strategy, business objectives, big-picture goals, and timeframes
- Knowledge of HR and operational processes
- IT skills
4. Create your plan
Having the right idea of what data you need, the right software, and the right people to work with, you’ll have what you need to create the best action plan for your HR team to implement and benefit from your analytics. Documenting how your analysis will help you bring in the best talent, internally develop leaders, and contribute to your organizations’ success – what metrics you’ll need to know you’re seeing success in these areas – will be an important step in getting the most of out of your analytics.
5. Stay compliant
Ensuring compliance with employment and labor laws is an important HR responsibility; staying compliant with data and privacy laws is an important part of your HR analytics strategy. The information that HR has on employees includes a lot of sensitive data, such as social security number, addresses, and much more. This means you need to put an emphasis on privacy protection. You also need to ensure that all the data that you are collecting and analyzing is within
6. Use your facts
Your fact-based HR operation can help you address your people issues more effectively. Just like technology or an office building your employees are an investment – one of your largest. It’s important to know that you’re getting ROI from your workers and using data to drive your hiring, firing, training, and promotional decisions can help you more accurately measure employee performance and improve the quality of your hires.
A writer at HR Technologist said, “We’ve been hearing for years that it’s HR’s turn for a ‘seat at the table’ and that HR needs to get ‘strategic’ about people management. And while some might argue that HR already owns people management and is strategic about it, most HR teams are still focused on tactical goals. The strategy needs insight. For HR to become a strategic partner to the business, it must be able to provide insights backed by data.” The importance of HR analytics is only growing and the need for businesses to understand the value and begin implementing their own HR analytics strategy is vital in staying competitive in supporting your employee base and being able to attract and retain the best talent.