source: thedigitaltransformationpeople

People Analytics For A Data-Driven And Effective Human Resource

Data-Driven Human Resource Department

For years, Human Resource department has been dependent on the manual resources to make better people decisions. Cobbling together data from multiple spreadsheets or attempt to extract information from cumbersome systems. To determine critical metrics such as turnover rates, cost per hire, employee engagement, and gender pay equity.

These challenges still remain in many companies but, the arrival of more sophisticated cloud-based analytics tools are now allowing HR to use people data more effectively.

People analytics in HR
Source: OPPTIMO

The transformation in how C-suite views the workforce now is starting to reflect, people aren’t commodities anymore. The focus has shifted more on talent quality, rather than talent costs.

Data and people analytics are transforming the workplace. HR is becoming a data-driven function.

According to the Society for Human Resource Management (SHRM), The focus on big data will challenge HR leaders to build a people analytics team, bring together multi-disciplinary skills, and develop a long-range plan to “datafy” HR.


A Human Resource department makes sure the company has a solid roster of employees, train them to fulfil their roles and compensate appropriately for doing so. They provide effective policies, procedures, and people-friendly guidelines and support. Making sure the mission, vision and values of a company are also part of its culture.

Sometimes, some of the human resource department’s responsibilities may be outsourced, such as payroll administration, recruitment.

Leaving the department more time to focus on higher-level functions such as hiring strategies or organizational development.


Responsibilities of a Human Resource Department

Source: VHV. Human Capital Management
  • Rules and Regulations: compliance with government rules.
  • Hiring: It’s absolutely crucial to have the best hiring strategies to employ the best labour. With the focus not only on competency but other things too such as cultural fit, employee persona, career goals, etc.
  • Changes in Company Rules: Making sure workforce accepts changes with pure support. Justly handling favouritism, new hardships, disruption in the team balance, etc.
  • Employee Training: Employee training and development programs are a big part of workforce grooming and motivation. Training comparatively is much more cost-effective than bringing in new specialists.
  • Compensation: The most questionable area, making sure individuals are motivated ad keeping payroll costs in check.
  • Employee Retention: Probably the most important because it’s always hard to watch a talent leave.

People Analytics (Human Resource Analytics)

People analytics puts to use data and data analysis techniques to better understand, improve and optimize the people side of the business.

It promises to link and align people data with business data and create outcomes focusing on company goals such as revenue increase and cost decrease.

Three main factors responsible for the rise in the use of analytics:

  • The explosion of data and data analytics due to various sectors adopting new technologies.
  • HR departments being asked to justify their business decisions based on measurable outcomes rather than gut instinct and subjective judgement.
  • Huge heaps of data with HR about employees including demographic data, job history, performance data, training and compensation.
Talent Related Data
People data: skills, engagement
Program data: training and development, leadership programs, attendance and adoption to new technologies of projects and assignments.
Performance data

Analytics in the early stages of hiring empowers talent acquisition to become more strategic.

Benefits in Recruitment/ Talent Acquisition
Replacing the manual process by reducing time to hire
Focusing on the quality of hire to avoid humanly unconscious biases.
Utilizing recruiting and hiring data to correlate with business outcomes such as revenue increase.

As per research in Harvard Business Review – algorithms increase the ability to find the best-qualified candidates by more than 50%

Apart from that with the help of people analytics:

Attrition rates decreased by 35%
Performance increased by 20%
Revenue per employee improved by 4%

People Analytics Benefits

“(91%) were regularly using basic data-analysis tools such as spreadsheets, with 48% using embedded analytics in their HR or talent systems, 38% using data-visualization tools, 35% using data warehouses, 31% using analytics embedded in an enterprise resource planning system, and just 6% using cognitive tools. “- Research

The world is moving towards the 4th Industrial Revolution. However many HR departments still struggle to produce accurate and timely insights from their people data.

To generate a high return on technology investments:

Accurate and up to date data needs to be fed to the systems.
People analysing the data should have diverse analytics experience and
People making decisions based on the data should have real-time access to the insights.

However, to develop a data-driven culture is an altogether different challenge. “only 5% of low performing organization use people analytics for business decisions, in comparison to 55% of a high-performing organization”

1. Beyond Standard Metrics

Some Progressive organization still use traditional measures for employee headcount and turnover data. This can be moved to a more sophisticated, user-friendly and versatile analytics software instead. Not only does analytics measure employee retention and turnover rates but also the progress of diversity and inclusion initiatives and worker overtime trends.

Benefits of HR analytics
Source: QuestionPro

Presenting people data report is no longer limited to just visually appealing graphs, dashboards and charts. Organization are looking for answers for the most serious business questions in data.

2. Data Security and Access Issues

One of the most serious concern, Traditional approaches to people analytics often involve data breach causalities. The sensitive staff data is put into data visualization and spreadsheets for analysis. This practice is highly risky when emailed across the enterprise in an unprotected format.

Security for Human Resource
Source: Slideshare

SAP SuccessFactors analytics products include authorization process. It also supports data purge functionality allowing companies to decide which people data should be deleted. It is one of the key necessities of the General Data Protection Regulation (GDPR), a data privacy law.

3. Diversity and Inclusion Analytics (D&I)

Today the people data is correlated between D&I and legislative compliance with the help of sophisticated analytics. The requirements of government agencies such as the Equal Employment Opportunity Commission are met through accurate people data.

Diversity and inclusion in Human resource
Source: MN7181

The aim is to ensure the inclusion of less presented population in an organization. The issues like pay equity, avoiding unconscious bias in hiring and promotion are on the key measuring focus. Some pay equity software tools, for instance, analyze skills set, work-ex, tenure, and geographic location while comparing the salary of men and women in similar roles.

More advanced organizations are using ONA(organizational network analysis) to measure more difficult factors. Like participation on internal collabs, how diverse populations are being involved in decision making or being identified as potential talent.


Conclusion

Analytics in HR might sound confusing but, traditionally HR has been responsible for the most intimate and data-heavy department in an organization. Analytics today has given the ability to leverage people data and align it in strategic ways with business goals such as revenue increase and cost-cutting.

Bersin’s research has found that while 78% of large companies rated people analytics as urgent or important, only 7% rated their organizations as having strong HR data analytics capabilities.

It is also crucial for HR leaders to give thorough due diligence to these fast-growing D&I analytics vendors because some of them have little to no experience in Human Resource market.

Meaning not all of them have a good understanding of the security and ethical consequences that come with managing and analyzing people.
The success of technology in improving HR department in gathering, correlating and analyzing data will however depend substantially on people. With the right mix of the technology, governance and analysis to give huge returns on investments with the help of analytics.

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