How HR Analytics can Help Your Company

14 February 2022 | 4 Minute
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How HR Analytics can Help Your Company

The Power of HR Analytics: How can They Help Your Company?

‘Measuring, tracking, and analysing workforce data has become a must-have for today’s organisations to continue to use the insights from these analytics in order to build and incorporate more strategy in their HR decision making.’ Debbie McGrath, Chief Instigator and CEO of

Are HR metrics important, or are they a ‘nice to have’ for your company? It depends on what information you collect and how you use it, as there’s more to HR analytics than the odd spreadsheet or the occasional collection and review of sickness data. HR analytics can be essential for your workforce analysis and review performance, productivity, and many areas that significantly impact the company when used correctly.

What is HR Analytics?

You may also know HR analytics as workforce, people, or talent analytics, and used correctly can give an overview of your people and improve the performance of your workforce.

HR analytics collect and analyze HR data and essentially show what is working well amongst your people and what requires improvement. For example, you can review turnover to see how many people are leaving the company and, in more detail, in which business areas and how long they stay with the company on average.

Benefits of HR Analytics

Done effectively, not only does HR analytics provide valuable information about your workforce, but it also aligns with HR and organization objectives. This is important because there’s no point in collecting or analyzing data that is not relevant to the company, and it shows how HR strategy is contributing to the business.

HR data, like most accurate data, can be viewed as evidence. It can show patterns, trends, and issues in the workforce and highlights areas to improve in the present and future. HR metrics also help HR do their jobs effectively as they can back up concerns or workforce trends to management, and often data-backed arguments are taken more seriously than simply words or ‘hunches.’

Over time, HR analytics and their correct use can potentially reduce turnover, sickness, or other areas requiring improvement and increase productivity.

How do you do it Effectively?

Be aware that change takes time. So, suppose HR analytics show that turnover is exceptionally high in one business area. In that case, further investigation will be required to understand why, and HR analytics may not be enough on their own without interpretation. Suppose you picture HR data in an excel spreadsheet without analysis or interpretation. Such raw data may be meaningless and can’t answer vital questions to the business.

Recent research showed that only 29% of HR professionals say that their company is very good or good at making changes in response to HR analytics, and 36% strongly agree or agree that the people analytics platform they use delivers actionable insights.

What might you use HR Analytics for?

In theory, you could save and analyze lots of HR data, but in reality, not all of it will be hugely useful. When you consider what you need, it might be worth thinking about critical issues in the workforce. For example, if retention is a problem, you need to measure data around turnover. As the data becomes more informative, you might be able to review different areas such as learning and development initiatives and assess whether they impact performance or check how long it takes to hire specific teams.

Here are some specific areas from the employee lifecycle that are useful to HR and the business:

  • Recruitment – when you recruit, you want to hire people who can do the job and fit with your company culture, share your values, and are motivated to do the specific role. Here, people analytics allow you to collate and assess large quantities of candidate data and compare candidate traits and qualities with those in your company who are already performing well.

In addition, you can review data to see how long it took to fill various roles, how many candidates applied, were interviewed, etc., which can help in future recruitment. Also, HR analytics in recruitment create a data-driven approach to recruitment that can help reduce bias and measure diversity and inclusion.

  • Turnover – if retention is a problem for your company, you need data to find out more about the causes and trends as high turnover can be time-consuming and costly. HR analytics can highlight the trends regarding who is leaving, why, and details such as tenure, job position, team, etc., to review what is occurring and why. Over time, this will allow HR to create strategies and initiatives to improve retention through engagement.
  • Culture – this is not an easy area to measure or change, but it’s essential to understand your culture and how your people feel about it as it could impact turnover. So, how do you measure people analytics about company culture? An excellent way to measure culture is to gain feedback from your people and use the feedback from employee or pulse surveys as people analytics and assess and act on the results you achieve. Ideally, measure input from across the company and include managers and leaders. 
  • Absenteeism – is a relatively straightforward area to measure so long as your people give you the information. Whether employees use a self-service system to record their absence or managers record it for HR, there must be a process for recording sickness and absence days. Each absence should be categorized accordingly. Once you have the data, you can measure it, look for trends and concerns, and apply necessary actions.
What is Predictive HR Analytics?

Predictive HR analytics are used to predict workplace trends and enable HR to analyze how their people work and use this information to expect and manage future change.

For example, Nielsen's data analytics company struggled with employee retention. HR reviewed HR data and identified 120 employees at risk of leaving the company. HR reduced the turnover rate to zero in the first six months by implementing job moves and progression for almost half of the group. After further initiatives, the HR team saved $10 million by lowering attrition using predictive HR analytics.

You must be forward-looking when it comes to HR metrics. Your HR team needs to understand what needs to be measured, how to measure it, and how to analyze the results. Not only are HR personal responsible for collecting the data as a strategic function, but the HR team must also be able to explain the results and suggest solutions. Predictive HR analytics is vital to employee turnover and goes beyond the obvious HR metrics relating to the length of service and obvious metrics. 

You can contact us to benefit from Sorwe solutions and discuss what’s right for your business.


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