HR Analytics – What Is It and How Can It Help Your Company?

Data or gut feeling – how do you and your colleagues make the smartest decisions for your organization and staff? The number of companies that realize the advantages of being guided by numbers and facts is increasing. Are you also curious to see the possibilities of HR analytics? Read our guide!

HR analytics (also known as people analytics) is becoming more popular and a dominating HR trend. But what does the concept mean, more precisely? Why should your company use it? And, last but not least, how do you use it? Here is a quick introduction to HR analytics.

What Is HR Analytics?

Everything that happens in a company will produce vast amounts of data daily. Within areas like production, customer service, sales, and marketing, companies have continuously used statistics and key figures to make fact-based decisions and ensure the company is headed in the right direction. However, the HR area has been falling behind, and it is not until recently that employers have realized the benefits of using the employer data they already have access to.

Briefly explained, HR analytics is a data-driven way of retrieving knowledge about the company’s strengths and weaknesses regarding its staff. By compiling, combining, and analyzing data and key figures from one or more sources, management can identify patterns and connections, predict behaviors and events, and take the proper precautions at the right time – instead of relying on guesses and gut feeling.

Why Should Our Company Work with HR Analytics?

What kind of potential does HR analytics hold then, more concretely? What can you and your colleagues achieve by working (more) data-driven? With today’s digital possibilities to collect employee data, valuable insights are nearly unlimited, but we will list a few examples below.

You Will Understand Why Your Co-workers Leave

Losing staff is something that could easily be a costly and resource-demanding challenge. With concrete facts to lean against, it becomes easier to analyse and follow up on your employee turnover and understand why it happens. Who is quitting and why? Do the numbers differ between different departments? Is it a high percentage of new hires that leave, and what could be their reason for leaving? Can you identify any other warning signals, such as a high employee absenteeism rate? In short, by combining different metrics, HR analytics can help you identify patterns and connections that would otherwise be difficult to discover. It can also predict when and where there is a risk of employee defection.

It Will Help You Prevent Sick Leave

Sick leave is a challenge for many companies, but luckily there is a lot that management can do to improve sick leave numbers: everything starts with getting a clear overview. Dashboards and other analytic tools can, for example, help you answer questions like: How high is the sick leave right now? How has it developed over time? Is there any department that stands out? How do sick leave numbers vary between different periods during the year? Can we differentiate any patterns and connections? Which results do we get from health promotion efforts, and what can be done differently?

You Will Work More Strategically with Recruitment and Competence Maintenance

Using employee data, you can work goal-oriented with new recruitments and staff planning. Do we have the correct number of people in the right positions, and when do we need to add resources – before the situation gets out of hand? You will also have better support for working strategically with your competence maintenance. Which are your key roles and most critical competencies that the company wouldn’t survive without? What do you need to do to retain them within the organization? And when you recruit new talent, how do you ensure they match your most sought-after competencies at every moment? HR analytics can help you with challenges like these too.

You Create Better Employee Experiences

HR analytics can also help you check the well-being and engagement of the employees. How do you improve the working conditions so that your employees want to stay, thrive, and grow together with you? What benefits and other gains will raise their motivation most? What do employee training and development courses lead to in terms of employee satisfaction (and the overall business results)?

Four Steps to Succeed with HR Analytics

It is evident that HR analytics is an investment that pays off in several areas. But which factors enable you to truly work data-driven? And how do you get started?

1. Start with Your Challenges
   In an environment where (almost) everything is measurable, you can quickly feel overwhelmed. Since every organization is unique, there won’t be specific key figures that suit them all. Therefore, the trick is to be selective and focus on the most relevant and impactful measurements for you – measuring right rather than measuring everything, in other words. Choose your key figures according to the company’s goals and strategies. Which areas can we pinpoint that are particularly important for the company’s success? Which success factors connected to the staff are we able to identify? What risks, challenges, and areas for improvement do we need to tackle – today and long term?

2. User-Friendly Tools Are Important
   Are you struggling with ineffective tools to compile and present your key figures? A common challenge in HR analytics is that data is spread out in many places, in several personnel systems that aren’t synced, or they are split into different spreadsheets. The key to effortless management with minimal manual work is to apply user-friendly digital tools that gather all data in one place – ready to be collected with just a button click.Not only do you save time and frustration, but you can also be sure that your numbers are updated and reliable. Last but not least, it will be much easier to communicate and create engagement for your data, as you can package them in a graphically appealing and accessible format – with the help of an HR dashboard, for example.

3. Put Together a Team
   Remember that HR analytics means team play. Consider which co-workers can contribute with the proper knowledge and insights. This entails the company’s challenges and the practical matters of how the collection, analysis, and follow-up should be performed. Then put together a team with the right resources.

4. Start Small Scale
   Be careful with being too ambitious in the beginning. A common recommendation is to start with a smaller, clearly defined project and use one or a few comprehensible key figures. After this, you can widen your project by adding data. Otherwise, the risk is that the work will be too overwhelming, and you might lose your overview.

Ready to Get Started with HR Analytics?

In our web-based personnel system Flex HRM, we have made it as simple as possible to extract valuable insights from your employee data. Use our report generator, create tailor-made reports, and share them with your colleagues with just a few button clicks. Or, check out our HR dashboard – with its clean-cut, intuitive graphics, it delivers a snapshot of sick leave, employee turnover, and other key figures, instantly making you aware of undesirable changes.

Any questions? We are happy to guide you!