How HR Leaders Can Use Analytics to Make Great Decisions

The HR department is evolving quickly, and investment in technology solutions is one of the biggest changes. Indeed, these investments are set to keep rising quickly as more businesses start to recognize the benefits these solutions can offer.

Indeed, almost three-quarters of businesses (74%) expect to increase their spending in this area, with PwC identifying six key areas where HR tech will be in demand. These are:

• Finding, attracting and retaining talent
• Developing people to achieve their full potential
• Improving the employee experience
• Creating collaborative work environments
• Improving workforce planning
• Ensuring wellbeing, inclusivity and diversity

While there are a wide range of different tools that play a role in HR tech, one of the main solutions will be an effective people analytics system. This should be able to study a wide range of activities and metrics among your workforce and provide you with accurate, factual insights.

The benefits of data-driven decision making

A key benefit of these solutions is that they enable you to be much more strategic in your decision-making. This means no more relying on hunches or best guesses, whether it's in the recruitment process, deciding which benefits or rewards schemes to offer, or how to make your workforce happier and more productive in their roles.

It can also eliminate any unconscious bias you may have that could lead to narrow thinking that prevents you from achieving inclusion and diversity goals or overlooking talented individuals because of personal factors.

HR analytics can be used to make better decisions throughout almost every facet of your activities. Here are a few key areas to focus on.

Revamp your recruitment

The use of people analytics in recruitment can help ensure you're casting as wide a net as possible and taking into account candidates you might not otherwise consider in order to find the best fit for the business.

Comparing candidates' data against metrics gleaned from your current employees can help spot those who match the profile of your best workers, ensuring that you aren't just deciding who to hire based on their experience or qualifications, but how well they'll fit into your company culture.

Analytics can also eliminate unconscious bias by taking a 'blind' approach to hiring. This doesn't just apply to areas such as gender or racial background - even factors such as someone's accent or a recruiter's opinion of the university they attended can color their decision-making, which can be removed by effective analytics.

Transform your training

A good training program is essential for the success of any business, whether this is part of onboarding new hires to get them up to speed, or ongoing professional development to upskill your workforce and help them bring more to the business. But there are a wide range of methods firms can deploy, and without analytics it can be difficult to determine which are the most effective.

HR tech can solve this problem by giving you clear feedback on what types of training are getting the most engagement from your workforce and are most effective. It can also ensure you keep control of the expenses involved in training by showing you how much it costs to train each individual employee.

Predict problems

People analytics are also excellent at identifying potential red flags among your workforce that can be a sign employees are considering leaving the company or could be causing disruption among their team. For example, looking at metrics such as absentee rates and productivity can help you identify individuals who aren't performing well, enabling you to step in and find out why before it becomes a problem.

HR analytics can also identify patterns that can cause personnel to leave and recommend the right steps to improve retention. For example, without analytics, a manager might believe offering pay rises is a good way to reduce turnover, but if there are other factors such as poor morale that are contributing to this, such moves won't be effective. HR tech can spot trends and provide hard evidence about what better steps forward might be.

Generate growth

HR analytics aren't just for use within the department. Effective use of data also allows these teams to play a more strategic role in the direction of the company and act as a driver for wider business growth. But according to Gartner, only 40% of senior leaders use HR data to make decisions, despite the insight it can provide.

For instance, if you've been using training analytics, you should have hard data on how investment in these resources leads to increased productivity. You can then put this to board members and finance teams to argue for more focus on these areas, showing how it’ll lead to better business outcomes.