Data analytics is no stranger to the human resource (HR) function, with over half of organizations (58%)Â using workforce analytics within some aspects of the HR function. In fact, close to two-thirds (69%) of organizations believe that workforce analytics is critical to the success of the business. HR analytics, or workforce analytics, is the process of collecting and analyzing HR data to identify workforce trends and formulate people strategies.
There are plenty of benefits associated with analyzing HR data and key metrics, as it can help organizations to address key HR questions and concerns such as high turnover rates, employee movements, engagement levels, impact of learning and development programmes on employees' performance and more. Having data-backed evidence enables HR and business leaders to make better decisions and enhancements for future initiatives.
For organizations to reap the benefits of HR analytics, it needs to be implemented effectively. HR leaders need to ensure robust data collection, the right HR systems and people to analyze the data, and resources and buy-ins from leaders and employees to implement the insights gleaned from analyzing HR data. Here are 6 pillars to implementing HR analytics successfully.
Robust and quality data collection
Reliable and high-quality HR data is key to facilitate sound decisions. This is where HR needs to identify suitable types of data, accurate data sources and ways to collect them. Most organizations are likely already collecting HR-related data through various HR platforms and channels. It is then imperative to understand the type of data collected, where it is collected and stored, and missing data so as to fill in the gaps. This helps to ensure a quality database of HR data that can be used for analyzing patterns and trends.
Secure data protection methods and procedures
Robust data protection controls are essential to protecting the highly-confidential and sensitive data collected. Organizations should have in place secure data protection methods such as multi-factor authentication, restricted levels of accesses and encryption methods to prevent cyberattacks or fraudulent activities. This should apply to both HR data collection processes and systems. Implementing secure data protection methods can build trust and confidence among employees, in turn encouraging employees to provide updated and accurate HR data which helps to build a reliable HR database for analysis.
Well-defined HR metrics in line with business goals
For HR analytics to succeed, it has to be able to contribute to the overall people agenda and organizational goals. This can be achieved by having well-defined HR metrics that provide insights on areas where senior leaders may be interested to see. Concerned about turnover rates? Perhaps track employee movements within the last X years across each department and teams. Keen to understand the impact of learning and development programmes on employees' performance? Measure employees' productivity levels, work outputs and engagement scores. With clearly-defined HR metrics, it is easier for HR to identify patterns and trends, and zone in on areas where HR and business leaders can drive improvements.
Strong HR tracking systems
Successful HR analytics is enabled by robust data as well as strong HR tracking systems. Without the right tools to analyze HR data, the data collected will be meaningless. Investing in the right HR tracking systems enables HR teams to collect and store sensitive and confidential employee data in a secure manner, and translate data into reliable and useful insights. It is also crucial to find a system that is user-friendly and scalable to meet multiple business needs and integrate with other systems within the organization.
Communication & change management
A solid communication strategy is essential to the successful implementation of HR analytics. Communicating the results of HR analytics in a comprehensible and easy-to-understand manner is essential to get leadership and employee buy-in. To make the data easily accessible and applicable, consider introducing dashboards and data visualization tools to enable the HR team and leadership to use and experiment with HR data on their own. Once business leaders are able to derive their own insights based on various scenarios, it is easier to have the leaders on board with new HR initiatives and roll out change management programmes.
Continuous improvement
Beyond reliable HR data and robust HR systems, the key to reaping the benefits of HR analytics in the long run is to consistently review existing HR capabilities and its alignment with business goals. Given that the organization’s internal environment is likely to be evolving over time, it is imperative to review the HR initiatives, leverage HR analytics to evaluate performance and outcomes, and enhance programmes accordingly. This cycle of continuous improvement will enable HR and business leaders to maximize the insights generated from HR analytics to improve employee performance and productivity levels, thereby building a high-performing workforce.