Running Your Business

Why You Should Use People Analytics to Manage HR

  • 80 percent of an organization's costs can be attributed to its people and their performance

  • 71 percent of companies are very concerned about people analytics, according to Deloitte

  • People analytics are primarily concerned with recruitment, but there are other ways to use this data

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Posted by November 3, 2017

People analytics are a critical component of every human resource team’s arsenal of tools. By using data gathered from various sources, HR can predict the success of the organization.

These metrics can help measure the performance of employees—making it easier to evaluate your workforce as a whole. Deloitte’s 2017 Global Human Capital Trends report revealed that 71 percent of companies consider people analytics a top priority.

Today, there are many popular cloud-based HR solutions that harness human capital analytics. This data is useful for understanding (and overcoming) a limitless number of business challenges, from recruitment and retention to employee compensation and performance management.

Before selecting from an ever-growing list of HR data management products, it’s important to understand why HR analytics are so vital to an organization. Here are some reasons you should use people analytics at your company.

Monitoring the Progress of Human Resources

Every company wants to make the best use of its people assets—and the data tells a story that can be monitored at all times. With real-time data solutions, HR teams can evaluate how their efforts are helping the organization. Recruitment seems to be a top priority, but these analytics are also useful for workforce planning and managing changes within the organization.

Measuring the Return On Investment

People analytics are also critical for measuring the return on investment that the company makes in its people. For example, a company may decide to start an internal training division rather than sending employees off-site. This would be a large up-front cost that could be measured by how quickly newly-trained employees become more skilled and increase company profits.

Predicting the Future

Another reason why companies turn to people data is to better forecast hiring needs and conduct compensation and benefits planning. Seeing where the organization has been—and where it’s headed—can keep things running smoothly from an operational sense.

How Human Resources Can Tap Into People Data

According to Will Gaker, an instructor for UC Berkley Extension, around 80 percent of an organization’s costs are tied to its workforce —which is typically the largest investment.

Recruitment and retention tend to be the top concerns for organizations, especially during times when there are major talent shortages. Data can be gathered and evaluated to see what jobs have the most turnover, how quickly recruiters can source (and place) new hires and how long employees stay on board. Social tools can be used to understand what types of candidates the company attracts and identify the traits that are most often hired for.

In terms of performance management, people analytics that are focused on behavioral outcomes—called organizational network analysis (ONA)—can drill down into the behavior of high-performing employees and teams. This can help managers when matching new hires up with existing employee groups, and when shifting people to other areas as they show readiness. It can also help to identify areas of weakness and opportunities for additional learning.

Comparing Business Success

People data can be a useful way of measuring the success of the business against others, using industry-wide analytics. Over time, areas that need improvement will become apparent. This makes the organization much more effective and profitable.

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