The business world has had human resources departments for as long as there have been humans who need resources. Employees need a centralized point of contact when they need help with a staffing issue, from everything to paychecks and benefits to vacation days and official complaints. Human resources covers it all. Truly, you get the right people in your human resources department, and it can mean real, tangible growth in your business.
Now, we have an added tool for human resources – analytics. Analytics have been around for decades. Sure, not as long as human resources, but we quickly learned in business that tracking our metrics and analyzing them has helped us grow in business in numerous ways. We track sales, we track marketing, why should we not also track our human resources?
What Are HR Metrics?
HR metrics refers to the various key figures that help a business track their employees and measure how effective their human resources strategies are. When we think of HR metrics, we think of data like turnover, cost-per-hire, benefits participation rate, and other key factors that affect your recruitment, your engagement and retention, your time tracking, your employee value and performance, and your training and development. Depending on the tools or HR software you employ, you could be measuring across the employee life cycle:
- Cost of HR per employee
- Goal tracking
- Time to hire
- Time to productivity
- Voluntary turnover
- Promotion rate
- Span of control
- Salary range penetration
- Total compensation spend rate
- New Hire Turnover
- Training Completion Rate
- Healthcare usage by plan
- Time to fill
- Offer acceptance rate
- Employee satisfaction rate
- Retention rate
- Absence rate (Absenteeism)
- Overtime hours
- Revenue per employee
Executives are asking for HR Metrics at an increasing rate, and HR staff is finding themselves scrambling to pull data from multiple software systems in time to analyze it and hand it in with reports. It can be challenging to compile the metrics alone and attempt to make an analysis without the proper software.
In comes HR Analytics.
What Is HR Analytics?
HR metrics then are measured and evaluated using HR analytics. HR analytics is the process of analyzing the feedback you get when compiling the HR metrics. You seek and gain insight from this evaluative process, discovering how your business is performing, how well you are utilizing your human capital, and how well you are supporting critical business goals, such as:
- Headcount planning
- Employee acquisition and placement
- Training and talent development
- Compensation planning & control
- Mitigating risks (compliance management)
- Implementing strategic objectives proactively, such as diversity, equity & inclusion (DE&I) and employee engagement initiatives
When you apply all the data gained from your HR Metrics to these goals, you can accurately measure your progress and then adjust accordingly.
Applying a strategic HR analytics strategy to your business plan is a good idea because it helps make your business more successful. It also has the potential to increase positive employee engagement and the overall employee experience, leading to happier employees by preventing burnout, which, as well known by now, is a key factor in a successful business. This is especially important to stay competitive as “The Great Resignation” rages, where we are seeing millions of people quit jobs and managers they don’t like during the pandemic.
How Exactly Does HR Analytics Grow Your Business?
HR Analytics can also be referred to as People Analytics, which applies to all people that interact with your business, like customers, and it has been referred to also as Workforce Analytics, which includes freelancers and gig employees, who are not always recognized in HR. You can tell the difference easily, and while some will say the terms are not interchangeable, others argue that while there are subtle differences, they all give you similar feedback. Necessary feedback.
So how does analyzing all these metrics help your business grow?
First and foremost, HR analytics gives you deep insight into how your HR department is performing. What kinds of intervention and best practices the department has in place to keep your employees cared for and utilized to the best of their potential. The goal when you have employees is to maximize on your human capital to its fullest extent. You should not have a highly talented salesman in the mailroom. Likewise, someone better suited to a non-customer interactive job should not be in sales. HR analytics will help you identify these issues.
Make Better Decisions with Better Tools
When you focus on HR analytics’ data-driven approach to your human capital, you can answer important questions like what the potential of each employee is, how many BIPOC (Black, Indigenous, & People of Color) people work at your organization, how long you can expect your employees to stay, what is the average tenure at your organization, and who you can expect to improve, and even when.
Human resources are a source of a tremendous amount of data, and in this age of information, it is more imperative than ever that we start using that data to make better decisions.
HR analytics help businesses in recruitment and engagement. You will know if you need more female voices in a department or the perspective from more people of color. We now live in a world that is becoming increasingly diverse, and if our customers are diverse, then so too should be reflected in our businesses. That’s how we grow, by mirroring our audience, so we know how to speak to them directly. We learn to do that better with the tools we get from HR analytics.
With HR metrics and HR analytics, you have the potential to build a solid team, to recruit the right people, to retain your strong team members, and to let those who are ready to go, go. With an appropriate set of best practices and tools, your business grows from one that is hierarchical and lacking in communication to one where your HR department holds real value and acts as that central touchpoint for an effective and efficient team of people working hard toward mutual success.
All the cards are on the table, everyone is aiming toward their maximum potential, and everyone feels like a valued member of the team. A true partner.
That is the potential value of HR analytics.
HR Analytics: Sold!
Great. You’re sold on HR Analytics. Now, how do you get started? Chances are, you are already utilizing several data sources and HR technology systems in your HR department. Examples include:
- Culture Amp
- and more!
Tons of HR data at your fingertips, and you are probably not even aware of just how much you can do with all of it. Most HR data just gets compiled and sits in a database, spreadsheet, and several HR systems. What you need is a visualization of your HR data, in the form of a digital dashboard. An HR analytics dashboard that integrates all your systems onto one and shows you what you did not even realize you needed to know. Is it worth investing in yet another system to have HR analytics at your fingertips within hours?
Yes. It is worth the investment. Your ROI potential is limitless when you can accurately capitalize on the strengths of your team members. Not to mention the time savings HR generalists and People Operations leaders will save–on average several hours a month–which really adds up over time.
Take Employee Cycle’s HR Analytics Dashboard Software for a Spin
They have years of experience and expertise working with dozens of HR leaders and have personalized HR data coaches available to support your HR departments to compile the necessary data and to analyze it effectively. The HR dashboard software will allow you to view and share out real-time digital reports before important meetings that allow you to adjust to your human capital, without downloading or using software like Excel. Your business cannot help but grow when you know how to best analyze your data, and you should not be spending all your time wrangling data and working in spreadsheets.
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