HR analytics is a methodology that involves collecting, examining, and reporting human resource data. This analytics helps organizations understand how their workforce is performing and it helps organizations plan their workforce properly. Organizations can take necessary actions to bring positive change if there is any scope for improvement.
HR analytics helps track different key metrics, which include:
- Revenue per employee: This is calculated by dividing a company’s total revenue by the number of employees. It shows the average revenue generated by each employee, indicating how much an organization is generating revenue through its workforce.
- Offer acceptance rate: This metric measures the number of formal job offers that are accepted out of the total number of job offers within a specific period. A high rate suggests a favorable ratio, while a lower rate shows the company’s talent acquisition strategy is poor.
- Training expenses per employee: This metric is calculated by dividing the total training expenses by the number of employees who received training. This number helps assess the efficiency of training initiatives.
- Training efficiency: Derived from analyzing various data points such as performance improvement, test scores, and career advancements post-training.
- Voluntary turnover rate: This measures the number of employees who voluntarily leave their jobs, obtained by dividing the number of voluntary exits by the total number of employees.
- Involuntary turnover rate: Calculated by dividing the number of employees terminated from their positions by the total workforce. This metric reflects the effectiveness of the recruitment strategy.
- Absenteeism: This productivity metric can be measured by dividing the number of missed workdays by the total scheduled workdays. It provides insights into employee well-being and satisfaction levels.
- Human capital risk: This includes various employee-related risks, including skill gaps for new job roles and lack of qualified candidates for leadership positions. HR analytics helps measure and mitigate these risks effectively.
How HR Analytics Can Help Businesses
HR analytics can be very handy for businesses to make informed decisions. Here’s how comprehensive HR analytics can be helpful for businesses.
Improved Decision-Making
HR analytics helps organizations to make data-based decisions regarding a number of important aspects of the business such as talent management, recruitment, and employee performance etc.
By analyzing data on employee engagement, turnover rates, and recruitment effectiveness, HR professionals can identify trends and areas that need improvement and manage the overall workforce more effectively.
Better Talent Acquisition
Quality of the workforce is very crucial for any business. Here’s when the detailed HR data can help come up with plans and means to acquire quality talent for an organization.
HR analytics can help HR professionals and improve the hiring process by fine-tuning the hiring practices based on historical data.
Also Read: Best Recruitment Software
Workforce Planning and Optimization
Workforce planning is one of the most important use cases for HR analytics. Historical HR data can be very handy to plan the workforce the right way. You can forecast workforce requirements, you may plan the staffing requirement based on the expected attrition rate so certain business continuity.
How Does HR Analytics Work?
Data Collection
The first step of comprehensive HR Analytics involves gathering data from various internal and external sources.
- Internal Data: Internal HR analytics includes various information related to the existing and historical workforce data such as vag tenure, turnover rate, training-related data, overall employee engagement
- External Data: External HR analytics data primarily involves industry benchmarks, and economic trends that can provide context to the internal data collected.
Actionable Insights
Once we have the data, the important step is to analyze the data effectively and come up with actionable insights. Creating easy-to-understand reports out of the collected data is another important step for making the data actionable.
Making Decisions Based on Data
The final set of HR analytics is to make informed decisions based on the analytics reports. Any experienced manager with the experience of analyzing data can make better decisions based on historical information.
Conclusion
HR analytics makes internal and external data into actionable insights. HR analytics is a very handy tool for making informed decisions to grow your business. You may use HR analytics to manage your workforce more effectively, and you can make a proactive decision.
