12 Reasons to Embrace HR Analytics

Despite the great promise of analytics for HR, a recent SHL study found that less than half of global companies use any objective data when making workforce decisions, while less than 25% of US companies use workforce analytics. Even more telling is that only 4% of companies have developed the capability of performing "predictive analytics." There are many reasons why HR executives, both in the Shared Services sphere or elsewhere, have been reluctant to dive into analytics beyond a cursory level. Cost, scale, a lack of numbers-oriented employees, outdated systems and old-school mindsets are just a few of the many reasons. However, as case studies and examples trickle in about the success of HR analytics, it is becoming more and more important to at least be "fluent" about the basics. Before making the decision to fully commit, you need to understand how analytics can help your organization. We searched our favorite HR sources to find the Top 12 ways HR Analytics can help your organization. 1. Tell a Better HR Story "Of the hundreds of HR leaders I speak with each year, one of the most common goals of analytics is to tell a better story with data. HR can’t just present raw numbers and expect the recipient to identify the correct message. Analysts need to understand their audience, create a plot of related storylines, and deliver conclusions that tie together the principal facts." From Harvard Business Review 2. Stop Relying on IT "If your HR shared services team is left to the mercy of IT for reporting, you’ll always be in danger of seeing the wrong information or, worse, being unable to react to changes in the business requirements." From Dovetail Software 3. Change Behavior of Employees and Management "Ultimately, actionable analytics have to change a leader’s behavior. A leader should be able to change his or her thinking and make better, faster decisions as a result of talent data." From Harvard Business Review 4. Determine True ROI "Articulate the impact of human capital investments." From Wired 5. Answer Questions You Never Could Before "Why does one sales person outperform his peers? What is the impact of learning programs on company results? How long does it take for new employees to be productive? Why do certain leaders succeed and others fail? To prevent a massive turnover catastrophe, company used workforce analytics to calculate how many employees would retire per year, the types of workers needed to replace them, and where those new hires were most likely to come from. The result was a workforce planning summit that categorized and prioritized 89 action plans designed to address the potential talent shortage." From Harvard Business Review 6. Pinpoint Process Failings "Analytics can pinpoint where self-service processes are failing, so HR teams can work to improve delivery in the self-service tier and ensure an increasing volume of inquiries are resolved in this channel." From Oracle [eventpdf] 7. Help Business Leaders Make Better Decisions "Armed with actionable analytics, leaders and managers have immense opportunities to use talent data in reducing workforce costs, identifying revenue streams, mitigating risks and executing business strategy." From Harvard Business Review "I think more than anything else you have to get away from the numbers or the metrics, and focus on understanding the way the business operates," Berry said. "We don't have good analytics because we have a good vendor [or] good data. We will have a successful program to the degree that I am solving for issues keeping the CEO awake at night." From Tech Target 8. Assess Salary Decisions "What the research found was that employees in the second and third quintile of performance (good solid performers) would stay with the company even if their raise was as low as 91% of average increases in their job class. So these folks were being overpaid. On the other hand, people at the top of the performance curve would leave the company unless they received 115-120% of the average pay increase for their job class, indicating that the payroll money should go here." From Forbes 9. In-Depth Measurement "Here's just some of what enterprises can learn from HR analytics software: Recruitment cost per hire New hire failure factor Employee turnaround rate E-learning abandonment rate Bonus compensation rate" From Citeworld 10. Gain a More Holistic View of HR "Advanced-analytics users go beyond traditional measurements – such as total turnover, revenue per employee and diversity – to get a more thorough picture of the workforce as a whole. They have the right tools and are able to develop targeted sets of KPIs, such as: talent mobility learning and development efficiency aggregate competency and skills levels" From Sum Total Systems 11. Get Buy-In from Senior Leadership "Your ability to think strategically about people analytics will help you capture and keep the attention of your senior leadership, and will support more informed, evidence-based decision making in realms that extend well beyond the human resources office." From eCornell 12. Predict the Future We, as HR professionals, constantly struggle to effectively forecast the trends and predict the future. We need reliable and accurate data to develop effective models that guide business strategy and decisions. HR analytics is the process of developing such evidence-based models. In this sense, it is the health-meter of an entity, measuring its performance and well-being, and driving transformation to prepare for future challenges. From SSON NOTE: If you want to learn more about how HR Analytics can make your HR Shared Services a "smarter business partner" register TODAY for the HR Shared Services and Outsourcing Summit in Chicago later this month. There is still time!

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