September 18.2018, 2.01pm
HR analytics for smarter business decisions
The old adage “Know yourself” can be traced back to ancient Greece but it’s increasingly being used as an unofficial call-to-arms for businesses in the digital age.
The path towards organisational self-awareness requires acquiring a clear understanding of what defines you as an organisation – who do you want to be as a company, what do you need to do differently, how much potential do you possess, and where are your strengths and weaknesses?
Modern businesses with HR software now have unprecedented access to a wealth of HR analytics and workforce data that can answer those questions. “World-class HR organisations” outperform their peers by embracing digital transformation, spending 26 percent less and relying on 32 percent fewer staff, according to a new report by The Hackett Group. It says that embracing digital technologies can help you achieve world-class status in five years and make huge leaps in two.
At the heart of that transition is HR technology and the use of real-time analytics to make better business decisions. So how do you use analytics to make smarter decisions and improve your efficiency?
Use data to hire the right people for you
A lot of companies’ successes and failures can be linked back to their recruitment policies or hiring choices. A staggering 95 percent of employers have admitted to recruiting the wrong people. Quality of hire is a hugely important metric but only 33 percent of recruiters feel that they do a good job of measuring it.
Analytics let you assess your hiring success based on metrics like productivity, a period of retention, ROI or role-specific skills. Recruitment analytics can identify desirable psychographic data in candidates, establish core competencies or performance indicators for specific roles, and define pre-employment test results that indicate suitability or predict performance potential.
Taking a data-driven approach to recruitment means tracking, measuring, gathering and examining candidate and employee data to determine recruitment success and identify areas for future improvement. CoreHR’s CoreRecruit software offers you a single view of your company’s recruitment process, using real-time data and analytics to let you drill down into your recruitment by department, location or timeframe.
Get the most from your people
Talent analytics is now an essential part of talent management, helping businesses to uncover high performers in their midst and identify performance traits that can be indicators of potential. It helps you solve talent-related problems with evidence-based solutions.
However, Deloitte’s Global Human Capital Trends 2016 found that only eight percent of surveyed companies were “correlating HR data to business outcomes, performing predictive analytics, and deploying enterprise scorecards.”
There are three components to any mature talent management analytics function, according to a recent SHRM report. You need to have the capability for data infrastructure/reporting, advanced analytics and organisational research. The report advised businesses looking to pursue talent analytics to focus initially on reporting capability and HR data infrastructures.
This can build the foundation of an effective talent analytics strategy. Establishing a strong dashboard and clearly-defined metrics can give you the necessary springboard to apply real-time analysis to your past and present workforce.
Identify talent-related problems that you want to solve, look at how to measure them, bring in the necessary analysts to deliver analysis and adopt a cross-divisional approach to apply your findings at a practical level. You also need to constantly review and assess your talent analytics data to hone and improve your results.
CoreHR’s talent management software lets you review employee performance against your organisation’s core competencies, assess employees’ ability to meet company goals, manage competencies, pursue succession planning, and identify learning or development requirements.
Follow the money
Payroll analytics can reveal much more than who gets paid what and how much your monthly wage bill is. Thanks to pay-related data, it’s never been easier to “follow the money” and see what it says about your organisation.
As part of an integrated workforce management system, it can allow you to uncover essential information and trends that lie beyond the payslips for essential business insights. That means access to data like budget versus actual costs, costs per employee and employee ROI.
You can also assess staffing performance and capacity, which can help judge the benefits of hiring additional people versus offering overtime or bring in contractors. Understanding operational costs in relation to your workforce allow you to predict project costs and develop informed mid-term and long-term business strategies. It’s not enough to focus on performance analytics without factoring in costs and the broader business context.
If you discover a certain department is constantly paying out excessive amounts of overtime, it can point to understaffing or poor time management. If you spot a consistent pattern of high performers on a certain pay grade leaving, it may point to a discrepancy between what you’re paying employees and what your competitors are offering.
Payroll data can reveal detailed data about each person in your workforce, which can ultimately be leveraged for business insights. It can highlight flaws or successes in recruitment models, shine a light on poor management practices, or even reveal issues with seasonal workflow management.
Give yourself the tools to succeed
The key to developing a functioning, effective HR and people analytics program is empowering yourself with the right workforce management software to provide you with the data you need. The right software can transform your business and sow the seeds for future success. It will give you the tools to leverage data for increased business value, as we discussed in a previous blog.
With technology like CoreHR’s CoreInsight, you can make a comprehensive assessment of the efficiency of your organisation. You can discover if your workforce has the skills you need to continue to grow, whether your organisational design is in need of improvement, or if you need to change your existing hiring practices.
Further, it’s easy to:
- Identify and monitor trends in workforce performance.
- Analyse employee trends.
- Enable managers to make smarter business decisions.
- Identify, monitor, and resolve key issues affecting both workforce and business performance.
HR analytics is becoming a vital process in modern business and having the means to gather, interpret and act upon your organisational data is no longer a luxury. It’s a necessity.
Being able to use HR analytics will not only help you find the answers you’ve been looking for, it will also help you to ask the right questions as you pursue a policy of data-driven, strategic problem-solving.
By Leigh Goggins