Workplaces, in today’s world, which is increasingly centered on data, are not an exception to the rule. There has never been a time when harnessing the potential of people data was more important than it is now, and the analytics modules of human resource management systems (HRMS) are leading the way in unlocking new organizational insights. According to the findings of a survey conducted by Sierra-Cedar HR Systems in 2017, major firms ranked the collection and analysis of metrics as one of their top five objectives. In this piece, we will dig into the fascinating realm of HR analytics, discussing everything from what it is to the possible effects it may have on your company.
What is HR Analytics?
In layman’s terms, HR analytics refers to the process of producing complex reports by making use of your accumulated people data. Your HRMS is able to deliver strategic and predictive insights by combining a variety of datasets, which in turn may greatly affect the strategy that you employ for your organization. It is comparable to HR Key Performance Indicators (KPIs), but the focus is on the future rather than the past. The key difference between KPIs and HR analytics is that the latter looks forward.
Why HRMS is the Way Forward for HR Analytics
The amount of data as well as the different types of data are essential components of useful and effective analytics. Even though the vast majority of enterprises probably do not yet have the amounts of data necessary for genuine Big Data, they are getting closer. Your HRMS essentially serves as the primary archival location for all of this essential data.
HR analytics and reporting may generally be broken down into the following four categories:
- Basic Operational Quantitative Reports: These give information on “how many” as well as “how much.” They are helpful, but their applicability is restricted.
- Wider Operational Reports: These make use of a wider variety of information sources and are an excellent tool for comparing various aspects of performance.
- Strategic Outputs: These provide “human resource analytics models” through the use of statistical analysis and segmentation, which are helpful for making decisions with a longer-term perspective.
- Predictive Analytics: This entails preparing for several possible outcomes and conducting in-depth analyses generated from a variety of data sources in order to gain strategic insights.
In the past, human resources mostly concentrated their efforts on the first two areas. Nevertheless, modern software is able to provide users with higher-level insights as a result of its enhanced HRMS features and improved interaction across various databases and sources.
The Business Case for HRMS Analytics
Managers and executives are often the most important people to consider when developing HR analytics solutions. This includes operational managers making use of real-time reporting features and C-suite leaders applying recruiting and performance models to forecast future skill requirements and define recruitment plans.
The potential advantages offered by the features of HR analytics are manifold:
- Superior to Excel: The manual spreadsheet crunching that was commonplace in years gone by has been replaced by HR analytics tools, which have made data processing much more efficient.
- Efficient Planning: Mining of historical data and analysis of current events in real time both improve planning at all management levels. This encompasses everything from maximizing the daily deployment of the personnel to forecasting the employment requirements of the future.
- Data Visualization: The reporting modules of modern HRMS systems have features for data visualization, which makes the data easier to understand through the use of charts and graphs.
- Embedded Analytics: The functions of HR analytics are no longer performed independently. They are incorporated naturally into the operational procedures of the HRMS on a daily basis. For instance, a manager may rapidly examine compensation ranges, benchmarked performance, and absence rates in comparison to the average while analyzing the record of a promotion contender.
- Simplified Succession Planning: The use of workforce insights improves the accuracy of succession planning by enabling firms to plan ahead for retirements and turnover while simultaneously locating appropriate skills and potential among their existing workforce.
- Identifying the Best Candidate Sources: HR analytics allow for the assessment of previous sources and expenses of new workers, providing insights into the sources that will be most useful for future recruiting.
- Enhancing Employee Engagement: Polls and surveys on employee engagement produce useful data that may be used to modify engagement tactics and improve retention rates.
- Boosting HR’s Credibility: The credibility of HR may be improved through the use of data-driven HR analytics by demonstrating how people strategies affect the bottom line.
Common HR Analytics Reports
Information requirements might vary greatly depending on the managerial function. Individuals are granted access to the data that is most pertinent to them in a style that is simple to comprehend thanks to customized HR metrics dashboards. The following are some samples of different sorts of reports, organized according to their relevancy:
- Matching Resources to Business Needs: In order to fulfill objectives and account for both scheduled and unanticipated absences, operational managers want reports that allow them to deploy available resources in real time.
- Anticipation of Future Business Needs: Reports that integrate company strategy with workforce skills, which enables timely recruiting and development initiatives, are beneficial to senior operational managers, recruiters, and learning and development experts. These individuals may reap the benefits of these reports.
- Turnover: Tracking and predicting patterns is made possible with the use of turnover analytics by the C-suite, finance, and recruitment departments.
- ‘High Potentials’: The process of succession planning must begin with the identification and development of high-performing workers. The C-suite and the HR teams are able to conduct a performance and incentive package analysis using market averages as a benchmark.
- Vacancies: It is necessary for operational managers to have listings of vacant positions organized according to job title and department, with performance metrics, resourcing, budgeting, and the status of recruiting campaign updates also included.
- Leave and Time Off: Reports detailing employee absences, data about leaves taken, and earned and paid time off must be sent to operational management.
- Employee Survey Results: The results of surveys offer critical insights about employee engagement according to roles and functions, enabling middle-level and senior-level managers to develop plans that are more narrowly focused.
- Diversity and Inclusion: Reports for evaluating overall organizational compliance and self-identified diversity objectives are the primary focus of the C-suite and the HR departments.
- Budgets and Costings: Data pertaining to finances, including budget headings, projected expenditures, and actual expenditures made during the accounting period, are relied on by all levels of management that are entrusted with financial responsibility.
Selecting HR Analytics Tools
The precise needs for HR analytics might differ from one company to the next. The following are a few instances that will offer an understanding of the present landscape of the market:
- SAP SuccessFactors: In order to deliver statistics on employee engagement, diversity, performance, and attrition, SAP’s SuccessFactors system draws from a variety of different data sources pertaining to personnel. Self-service access with on-screen coaching and benchmarking capabilities are both provided by this feature.
- Visier: Visier makes use of technology known as Continuous Machine Learning in order to do predictive analytics concerning issues like as workforce planning, recruiting choices, compensation and benefits, and resignations.
- TalentSoft: TalentSoft provides a variety of pre-made dashboards and analytic templates to address typical HR issues. These dashboards may also be customized to meet the specific requirements of individual users. It allows for investigation on a very granular level.
- Vista (by PDS): Vista accesses the data stored in HRMS and provides users with editable analytics templates and dashboards that are intuitive to use. Training in all aspects of HR analytics is available through the organization.
- IBM Watson Analytics: IBM’s Watson software makes use of artificial intelligence and machine learning in order to generate insights on recruiting, workforce utilization, employee happiness, attrition, as well as training and career development. It provides users of varying skill levels with prompts and support tailored to their own needs.
The Potential Impact of HR Analytics on Your Organization
The influence that an HRMS analytics module has on your company and strategy is the ultimate test of its effectiveness. The following are some possible effects that might arise:
- More Accurate Prediction of Future Trends: Real-time data and in-depth insights make it possible to make decisions that are more proactive and based on accurate models of the future, which are generated from data and benchmarks from the past.
- More Focused Hiring: The areas of recruiting and hiring that stand to benefit the most from HR analytics include anticipating applicants who are at danger of quitting and finding the recruitment channels that are the most successful.
- More Strategic HR: HR analytics should be used to strengthen HR’s function as a strategic contributor to the organization. Analytics connect information about individuals with information about businesses, illuminating the interrelationships between the two.
HR professionals will need to continue developing their skill sets in order to take advantage of these benefits. The field of human resources management needs to open itself up to the world of big data, analytics, and competitive intelligence. Data scientists are increasingly becoming important cogs in the HR machinery.
In conclusion, HRMS software that is equipped with analytics capabilities is revolutionizing how HR operations are carried out. It provides HR professionals with the tools and insights necessary to make choices based on data, maximize the performance of their employees, and deliver improved business outcomes. It is only going to become more important for HRMS software to play a role in delivering data-driven HR insights as more and more businesses continue to embrace digital transformation. This will further strengthen the software’s status as an invaluable tool for HR professionals all over the world.
Darren Trumbler is a versatile content writer specializing in B2B technology, marketing strategies, and wellness. With a knack for breaking down complex topics into engaging, easy-to-understand narratives, Darren helps businesses communicate effectively with their audiences.
Over the years, Darren has crafted high-impact content for diverse industries, from tech startups to established enterprises, focusing on thought leadership articles, blog posts, and marketing collateral that drive results. Beyond his professional expertise, he is passionate about wellness and enjoys writing about strategies for achieving balance in work and life.
When he’s not creating compelling content, Darren can be found exploring the latest tech innovations, reading up on marketing trends, or advocating for a healthier lifestyle.