What is HR analytics exactly?
At its core, HR-analytics is the analysis of data. It is an approach in which the data makes clear what the impact of employees is on business performance. In other words: with HR-analytics HR professionals can the bandage see the connection between certain HR initiatives and the actual impact on the performance of employees and the organization. HR professionals can make better decisions using objective data. The data shows, for example, what the consequences of employee turnover are for customer satisfaction. When turnover is high causing customer satisfaction to drop, that costs money. Money that you can invest to retain and engage employees in your organization. HR-analytics makes the added value of HR processes – and management clear. Based on the available data, the HR department can make better decisions.
How can you use HR analytics?
HR can, based on HR analytics, make better decisions about the impact of employees on the organization's performance. To use HR analytics effectively you can follow a number of steps:
1. Formulate the correct question
It is important to the right business question to formulate. With a well-defined problem statement you prevent straying from the desired goals or performance. Zoom in on the causes of the problems you want to uncover. This clarifies which factors you need to include in the analysis to answer the business question.
2. Collect the right data
The second step is the analysis process. Data can, for example, originate from external sources (among others CBS, CPB) or professional literature, scientific research, qualitative or quantitative studies. Before you start analyzing data it is important to check it first; otherwise this will have consequences for the analysis and the associated conclusion. That way you find out whether there are unexpected observations, what may come out of the analysis, and whether the possible problem statement is correct.
3. Perform a good analysis
You can then analyze the available data. Employee data are needed to see relationships between cause and effect and to make predictions. Data can be processed in a pseudonymized form. When only metrics (summarized data) are available, you can only measure trends and developments within the organization, such as employee satisfaction. For performing the analyses, various statistical programs are available such as R, Python or SPSS, but Excel can also be used.
4. Interpreting results
The purpose of the analysis is to see what the cause of the results is and which HR actions can be linked to the organizational goals and strategy. Visualization of the data influences the perception and interpretation of the data. In implementation, you can link the insights to KPIs to measure and monitor the interventions put in place.
5. Communicate decision internally
It is important to share the insights and the decision with the stakeholders. That way you can together see whether the right actions can be set in motion. HR analytics makes it possible for HR professionals to try to solve strategic issues for the organization in an analytical way. Based on the data and the results from the analytics study, they can translate them into daily practice, thereby improving the quality of HR policy decisions and HR interventions.
