With so many interesting new HR tools available lately, are you wondering if more modern HR analytics could improve your workforce planning capabilities? In a world where companies need data-driven approaches to define, deliver, and improve workforce strategies, exactly how can modern tools help?
Today’s HR tools offer exciting new capabilities. For example, these solutions can accelerate data gathering, provide predictive intelligence, assist with hiring decisions, streamline performance management, and much more. But to avoid becoming overwhelmed with choices, it’s important to define the people challenges your company needs to address.
This article is intended to employers consider multiple facets of HR analytics:
- Historical context
- Popular functionality
- Key benefits
- Real-world use cases
How HR Analytics Has Evolved
Initially, HR analytics focused primarily on helping organizations eliminate intensive manual labor. These tools were useful for complex data collection and spreadsheet management to help employers gain useful intelligence from HR metrics and KPIs.
However, technology is constantly evolving, and this has led to multiple breakthroughs in HR analytics. For example, innovative solutions now integrate advanced workforce planning tools for faster, easier employee data analysis.
Now HR professionals can much more quickly and easily identify meaningful workforce patterns and forecast relevant trends. Using these insights, HR teams can develop, implement, and measure strategies and programs with greater precision and confidence. This improves HR’s ability to work side-by-side with business leaders to align with organizational objectives and improve overall performance.
To see what exactly HR analytics tools can do to improve workforce management, let’s move on…
Key HR Analytics Functions
1. Data Collection and Aggregation
Collecting and aggregating huge data sets is a core HR analytics strength. These tools can integrate data from numerous sources for access through centralized storage.
For instance, imagine you need to verify that a staff member has signed an NDA. Or when preparing an annual review, you want to see how an employee’s performance metrics have changed over time.
When detailed data is structurally organized and highly accessible, HR and business managers can make better-informed decisions much more quickly.
2. Data Analysis and Visualization
Leading-edge HR analytics also provide powerful ways to analyze and visualize workforce data. By extracting actionable insights and applying high-end algorithms and statistical analysis, these tools can help HR teams uncover meaningful patterns, trends, and relationships.
In addition, these tools can make complex data more coherent and useful by translating information into visually rich charts and graphs that add context and improve understanding.
3. Talent Management
It’s crucial for HR analytics platforms to include talent management capabilities. These features are designed to help organizations improve employee engagement and retention throughout the employee lifecycle.
For example, some tools make it possible to assess individual and team skills and translate them into recommended learning paths and development opportunities. This helps HR build employee competencies and align career growth with company needs and goals.
4. Workforce Planning
HR analytics plays a central role in workforce planning because it directly supports strategic decision-making. With more timely, accurate, complete decision support insights, HR and business leaders can develop workforce strategies that are more fair, less biased, and better tuned to organizational realities and priorities.
These capabilities typically focus on resource allocation, employee recruitment, and workforce restructuring, among others.
5. Performance Improvement
Many newer platforms make it possible to analyze workforce performance data in a variety of ways. This helps HR pinpoint and resolve specific performance gaps, curate and deliver customized development plans, and acknowledge excellent performers.
Benefits of HR Analytics
1. More Effective Strategic Planning
Data-driven tools enhance strategic HR planning in several critical ways. For example, it becomes faster and easier to forecast future workforce requirements, facilitate succession planning, and avoid potential talent gaps.
These tools also help HR teams more quickly develop appropriate recruitment procedures to meet existing business needs.
2. Valuable Predictive Capacity
HR analytics tools provide powerful forward-looking capabilities that help HR teams operate more efficiently and effectively. By applying data from past patterns and trends, it’s possible to generate forecasts that more accurately anticipate and prepare for future needs.
This kind of advanced capability helps HR and business leaders take proactive measures and adjust on-the-fly. It also leads to more effective talent management practices and higher employee retention.
3. Better Understanding of Workforce Performance
The ability to more deeply analyze employee performance is beneficial at several levels. First, it helps organizations evaluate, motivate, and reward talent in the most effective ways. Also, it reveals the differences between high-performers and their under-performing colleagues. This can lead to more effective performance improvement roadmaps and results.
Ultimately, this not only helps individual employees grow but also elevates skills and competencies across the company.
4. Improved Hiring and Engagement Outcomes
When hiring, data-driven analytics is an exceptional sourcing tool. It can dramatically decrease time-to-hire by helping talent acquisition teams quickly assess any candidate’s suitability for a job.
Once an employee is onboard, retention becomes crucial. Workforce analytics can help HR continuously calibrate metrics like employee engagement, productivity, and burnout. By benchmarking these indicators, HR can take action when needed to reduce negative factors and boost positive results.
5. Stronger Diversity and Inclusion
Data-driven tools can also help employers build a culture of diversity and inclusion.
For example, HR teams can identify key factors that contribute to job satisfaction and engagement (and conversely turnover) among minorities. Then, by monitoring these indicators, they can identify potential issues and work proactively with recruiters and managers to support inclusion and belonging.
6. Optimized Costs
Analytics also helps HR leaders effectively allocate and manage workforce budgets and resources.
For instance, by benchmarking factors like headcount, compensation, benefits, or location strategy, employers can determine which costs are higher than comparable organizations. This can also be a foundation for calculating return on investment across various workforce-related variables.
Real-World HR Analytics Examples
The following examples demonstrate how world-class employers are using data-driven workforce tools to improve decision-making and HR operations.
1. Google
Google is an excellent example of how employers can apply HR analytics to enhance workforce planning and organizational culture.
Even though the company had been growing successfully for more than two decades, it became obvious in 2020 that workforce diversity and inclusion weren’t keeping pace. Historically, the company had struggled with gender and ethnic diversity in hiring. And by 2018, employee confidence in the company’s leaders was declining.
This issue began to cast a shadow over Google’s employer brand, which made it increasingly difficult to attract and retain top talent, especially among underrepresented groups.
Google’s People Analytics team recognized the need to improve workforce planning, so they turned to HR analytics for a solution. Relying on their workforce planning tools, the team gathered and interpreted relevant data and generated useful insights. As a result, they defined talent gaps, identified areas where diversity was lacking, and exposed below-average recruitment patterns.
How Google Tackled These Problems
To address these issues, Google turned to its annual feedback process known as Googlegeist. Launched in 2007, this survey captures employee opinions about multiple facets of work life and organizational culture.
By rigorously analyzing employee feedback data, the HR team easily recognized underlying factors that allowed DEI issues to persist. In response, they developed targeted recruitment strategies to provide more opportunities for employees, job candidates, and potential applicants from underrepresented groups.
One of the outcomes of this effort is Google’s partnership with historically black colleges and universities (HBCUs). The main purpose is to draw hidden potential from sources that have historically been overlooked.
In addition, Google now trains recruitment staff to avoid hiring biases and exclusionary hiring practices. The company also trains its leaders in methods for managing diverse teams more effectively. Over time, Google is building a more diverse and inclusive workforce, while simultaneously improving its work culture and employee experience.
2. IBM
Another company that relies heavily on data-driven employment tools is IBM. This particular case focuses on applying HR analytics to reduce employee attrition.
The HR team was concerned with the rate of job hopping across its employee base. By using Watson Analytics, they analyzed a variety of factors, including employee demographics, engagement data, and performance metrics.
How IBM Resolved This Problem
These findings helped the HR team develop a predictive prototype to identify employees who were most likely to quit their jobs. Next, the team created a multifaceted retention strategy to address the specific needs of high-risk employees.
This strategy included curated development programs, employee safety and wellbeing, workforce recognition, and mentoring.
After implementing this strategy, IBM’s employee retention rate improved. As a result, the company saved money on recruitment and training, while improving the work environment for everyone in the company.
Final Note on the Power of HR Analytics
Data-driven workforce planning tools are a game changer for modern organizations. They bring a new level of convenience and efficiency to HR professionals. No wonder employers everywhere are embracing these platforms. But is data-driven HR, alone, enough to change an organization’s culture?
These tools can’t replace the unique people and innovative spirit that set great employers apart. However, they can become a decision-making backbone and help keep any organization ahead of the competition.
What about you? What do you see ahead for your workforce? How will you put HR analytics to prepare for your organization’s future?
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