What is HR Analytics and How Can It Benefit Your Company?

HR analytics involves the collection and examination of data to support improved decision-making concerning your workforce. It encompasses the analysis of employee conduct, performance, productivity, and interactions.

HR analytics offers valuable insights for making informed choices regarding recruitment, termination, or internal promotions within your organisation.

It enhances employee performance by assessing their skills. This article explores human resource analytics, its application in enabling HR professionals to make more informed decisions for their companies, and related topics.

Companies that offer HR software and who could help with HR analytics include:

  1. Rippling
  2. Deel
  3. Factorial


What Is HR Analytics?


HR data analytics entails the analysis of data related to prospective job applicants and current staff members to assess their impact on overall business objectives. Although human resource data may encompass a wide array of information, it can be categorised into three main groups: HR management system data, personnel data, and company-related data. Similar to other applications, HR analytics makes use of these data categories in diverse ways.

Nevertheless, it is crucial to emphasise that the primary aim of HR analytics is to enhance the efficiency of people-related business processes, extending beyond the HR department’s scope.


What Are The Benefits of HR Analytics?


HR analytics empowers organisations to stay ahead of the curve by forecasting and getting ready for upcoming workforce needs. For instance, forecasting attrition rates assists companies in enhancing their workforce planning, especially for vital positions within the company. We have listed 6 ways that HR analytics can help businesses below. 

Creating a Culture Of High-Performance

HR Analytics provides valuable insights into employee interactions and interdepartmental collaboration. It can shed light on how employees engage with specific software applications and how this impacts their productivity. Consequently, organisations can optimise internal procedures and streamline employees’ workflows to bolster performance, collaboration, and overall productivity. For instance, if a company can analyse the productivity levels of its remote workforce, it can utilise these insights to refine its remote working policies accordingly. 

Hiring Better, Faster, And More Efficiently

HR analytics can analyse the data and qualifications within the applications of new candidates, contrasting them with the abilities and traits of your existing high-achievers, and generate a curated list of the most promising candidates using advanced algorithms. For example, customised situational judgment evaluations can verify if candidates possess the necessary skills to excel in a particular position. This not only conserves your recruiters’ time and reduces business expenses but also enhances the likelihood of securing the ideal hire on the initial attempt. 

Upskilling And Reskilling Employees

Data can provide insights into areas where your employees may require upskilling or reskilling, their engagement with training opportunities, and the alignment of the training with their needs. This information enables the design of tailored learning and development initiatives, facilitating the enhancement of employee skills, performance, and the attainment of organisational objectives, while also optimising resource allocation.

As an illustration, analytics can shed light on employees’ preferences for on-the-job or classroom-based learning. Furthermore, it can identify individuals who are more inclined to seek additional learning opportunities and elucidate the personality traits associated with such behaviours.

Making HR Decisions That Are Fair And Equitable

In the past, HR management often relied on trends, biases, or short-term solutions. Typically, disparities exist between HR professionals’ beliefs about what is appropriate and effective and what the data actually reveals to be effective.

Evidence-based HR, on the other hand, prioritises decision-making that is substantiated by a combination of internal data, research outcomes, expert insights, practical experience, values, and considerations. This approach empowers HR professionals to make decisions grounded in concrete facts and evidence, rather than relying solely on intuition.

Promoting Ethical Behavior And Values

Another notable advantage of HR software and HR analytics software, is the ability to gather data from incident reports. This data can be instrumental in recognising patterns related to misconduct, including instances of workplace harassment and bias. This data empowers organisations to formulate strategic initiatives aimed at proactively addressing and mitigating these problems, ultimately enhancing workplace behaviour throughout the entire company.

Employee Absence Rate

The employee absence rate stands as a pivotal HR analytics metric. It focuses on quantifying the workforce members who are absent from work for a day or more during a given month, excluding those on leave, sick leave, or other forms of authorised time off. This metric aids in gauging the unavailability of an organisation’s staff and its consequential effects on the organisation.


How Does HR Analytics Differ From Traditional HR Reporting?

HR analytics is a data-driven approach to HR management, whereas traditional reporting typically involves reviewing historical data. HR analytics focuses on predictive and prescriptive insights, helping organisations make proactive decisions based on data, while HR reporting in the traditional sense, is more about summarising past activities.

What Kind of Data is Typically Analysed in HR Analytics?

HR analytics encompasses a wide range of data, including employee performance metrics, recruitment data, employee engagement surveys, turnover rates and more. Any data related to a company or startup’s workforce that can provide insights into improving HR processes can be included in HR analytics.

How Can HR Analytics Benefit My Company?

HR analytics can benefit your company or startup in a number of potential ways. It helps to identify trends and patterns within your workforce, leading to better recruitment, improved employee retention, and enhanced and improved decision-making. It also allows you to align HR strategies with wider business goals, increasing the overall efficiency and effectiveness of your HR department.

Do I Need a Dedicated Data Analyst or Data Scientist to Implement HR Analytics in My Organisation?

While having data experts on your team can be valuable, it is not a requirement to start with HR analytics. Many HR analytics tools are user-friendly and don’t demand a deep understanding of data science. However, having someone with a data background can help you make the most of your HR analytics efforts.

Is HR Analytics Only For Larger Companies or Can Small and Medium-Sized Businesses (SMBs) Benefit Too?

HR analytics can benefit businesses of all sizes. While larger enterprises may have more data to work with, SMBs can also gain valuable insights from their HR data. Many HR analytics tools are scalable and can be tailored to the specific needs and resources of SMBs, making it accessible and beneficial for companies of all sizes.