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Guide to HR Analytics

SwoopTalent
December 4, 2018

Human resources are the heart of every organization. Great employees drive company performance, and this is why improving human resources decision making has become a focal point for organizations of all shapes and sizes.

But what categories of information do you start to analyze and how do you analyze them? In this guide, you’ll learn about the different types of HR data, as well as how to analyze data and make data-driven HR decisions.

What is HR Analytics?

HR analytics is a field of analytics where analytic, data-driven processes are applied to human resources functions, decisions and practices. The goal is to improve HR KPIs like employee performance, employer brand attraction power, hiring speed/effectiveness, and retention to get a higher return on investments in the HR functions of companies.  

List of HR Data Tools / Software Vendors

In order to access HR data, you’ll need to leverage best-in-class HR tools. Here are the common HR systems and some of the vendors that you’ll see on the market.

Employee Sourcing Software

  • Lever
  • LinkedIn
  • Sourcing.io
  • TalentBin
  • Carbonmade
  • Behance
  • AngelList
  • Zalp
  • Smashfly

Job Boards and Job Posting Software

  • Glassdoor
  • Indeed
  • Monster
  • Jobs2Careers
  • CareerBuilder
  • LinkedIn
  • ZipRecruiter

Candidate Assessments

  • SkillSurvey
  • Authess
  • Berke Assessment
  • Prevue HR

Applicant Tracking System

  • Lever
  • Greenhouse
  • Workable
  • Jobvite
  • iCIMS
  • JazzHR

Reference Checking Software

  • Checkster
  • Xref
  • SkillSurvey
  • Outmatch

Onboarding Software

  • ClearCompany
  • HROnboard
  • EMP Trust HR
  • Zenefits

Employee Payroll and Benefits

  • Zenefits
  • ADP
  • Gusto
  • Kronos
  • Sage Intacct

Performance Review / Management Software

  • ReviewSnap
  • Insperity
  • Trakstar
  • Namely
  • HighGround
  • Impraise

Employee Learning / Development

  • Lessonly
  • Litmos
  • LearnBig
  • Grovo
  • Saba LMS

Employee Feedback / Engagement

  • Culture Amp
  • Culture IQ
  • Teamphoria
  • Pingboard

HCM / Talent Management Suite

  • Saba
  • SuccessFactors
  • Taleo
  • Cornerstone Ondemand
  • Workday
  • BambooHR

Types of HR Analytics / Metrics

Using the HR tools above, you can gather a wealth of HR data that you can also begin to analyze.

Below we break this topic down by different HR functions (sourcing candidates, maintaining high employee satisfaction, etc.) and the metrics that are most commonly used within those areas.

To keep everything organized, we’ll start from the beginning of the talent acquisition funnel and end at employee churn and succession.

Employee Sourcing Metrics

Employee sourcing is one of the most recent areas to receive the benefits of HR analytics. Most commonly, employee sourcing has been looked at through the same lens as email marketing, as marketing your company and job opportunities is similar to this marketing field.

  • Time-to-Hire (or candidate pipeline speed) - A sourced candidate’s time-to-hire should be tracked the moment they enter your ATS. This metric measures the overall speed of your hiring process, from job opening to hiring and onboarding.
  • Phone Interview and Screen Feedback - Regardless of the volume of candidates that are sourced and pushed through your talent acquisition funnel, you’ll want to measure the percentage of them who give positive feedback. This ensures that you are investing time and money into resources that deliver high quality candidates, and ensures that practices and individuals who give candidates bad impressions are corrected.
  • Quality of Source - As you gather more information and push more candidates through your pipeline, you’ll want to analyze the data from each candidate source. Use metrics from the point above to help you analyze the quality and cost/candidate ratio by source.
  • Cost-per-Candidate - As you invest in your sourcing team and tools, you’ll want to track the total cost/candidate ratio from each source. This will help you understand the return and quantity-for-effort you can expect from your sourcing activities.

Interviewing Metrics

When interviewing candidates, valuable time is being used for each applicant. Use these metrics to determine quality of candidates, and time spent per candidate.

  • Screened Candidates / Face-to-Face Interview - The ratio of screened candidates / candidates who are interviewed face to face is highly effective for measuring the quality of different candidate sources. Only the best candidates you source are interviewed, so the better this ratio for a particular source, the higher candidate quality provided by this source.  
  • Face to Face Interviews / Offers Sent - This metric is a great indicator of the overall skill level and fit of candidates you are sourcing and interviewing. The better the ratio between interviews performed and offers sent ( measured by candidate source), the more effective this candidate source is at providing candidates you want to hire.
  • Offers Sent / Offers Accepted - The ratio of offers sent to offers accepted helps you measure the strength of your employment opportunity and job offer. If you have a high rejection rate, it may be because the compensation you offer is not competitive.
  • Reasons Offers are Rejected - This metric is extremely important to measure in conjunction with your offers sent / offers accepted metric, as it gives you specific reasons why your finalist candidates aren’t taking your jobs. Whether your location is difficult for candidates to manage (meaning they’ll require commuter incentives) or the structure of the role does not match the “industry standard” this metric will show you which adjustments should be made to get fewer rejections.
  • Time Spent Per-Job Type - This metric is incredibly useful for workforce planning and the time you allot for each job search you conduct. Time spent per-job type will also help you budget your candidate searches more accurately.  
  • Number of Cancellations - The number of cancellations you receive from candidates is a great measure of how candidate friendly your interview methods are. If you have a high number of cancellations for your 7am interviews, for example, you can start holding interviews only after 9am to avoid future cancellations.

Hiring and Recruiting Metrics

Hiring and recruiting analytics are among the most commonly reported and earliest measured HR metrics.

Below you’ll find a list of some of the most common talent acquisition metrics and how to calculate them.

  • Time-to-Start - Time to start is calculated by taking the total days positions are open and dividing them by the number of positions filled. This is a great metric used to understand the overall performance of your hiring and recruiting efforts.
  • Time-To-Productivity - Time to productivity is calculated by taking the number of days between the new employee’s start day and the the day which they’ve reached satisfactory productive levels, and dividing it by the number of positions filled. This is a good way to measure the effectiveness of your training and onboarding programs.  
  • Turnover Rate - Employee turnover rate is calculated by taking the number of departures during a specified and dividing it by the average number of employees during the same period, and multiplying by 100. You’ll want to get specific with turnover rate and not apply it to your general company, but look at smaller groups of employees such as engineers, millennial, managers, etc. to hone in on teams, demographics and roles that are experiencing higher turnover.
  • Cost-Per-Hire - Cost per hire is one of the most common metrics you’ll be using to analyze talent acquisition efforts. It’s calculated by taking the cost (job marketing, recruiting fees, other costs related to the hire) and dividing it by the number of new hires.
  • Offer Acceptance Rate - Offer acceptance rate is the percentage of candidates who receive offers and accept them. This is calculated by dividing the total number of offers accepted by the number of offers, and then multiplying by 100. This will help you to quantify the strength of the job offers you are sending out to finalist candidates.

Employee Performance Metrics

Using your performance management system like the ones listed above, you can gain insight into employee performance and build  performance benchmarks by department and role.

  • Average Performance Rating - This gives you a baseline metric for measuring if employees are performing over or under the average for your company. You can also leverage this as an indicator of your various managers. Lower scores for a particular team from a single manager may indicate that manager is difficult to please or work with.  
  • Reporting Employee Satisfaction Rating - This metric is extremely valuable for measuring the performance of managers. If a team is extremely satisfied or dissatisfied with work, look no further than this team’s manager for the cause.

Employee Satisfaction Metrics

With retention and engagement becoming more important in measuring your culture, use these metrics to measure your employee satisfaction.

  • Employee Net Promoter Score - Net promoter score, or NPS, is a commonly used way to ask employees how satisfied they are with your company. This is a measure of how likely employees are to recommend your company as an employer, thereby showing you the quality of the work environment you are providing.
  • Absenteeism Rate - Absenteeism can be an indicator of employee engagement and satisfaction. Use absenteeism to indicate overall work satisfaction, department or team satisfaction, or even individual satisfaction.
  • Employee Turnover Rate - Employee turnover rate is a metric that should be tracked in your HR analytics systems. It can be leveraged for retention and acquisition strategies, as well as provide insight into benefits and how competitive you are in the market. This metric can also be used to identify teams with problem individuals or workplace practices that are driving high turnover.
  • Participation in Events - If you’re using group event calendaring and evite-like/facebook event tools, you can track which employees are attending events, and use that as a measure for engagement. You can also use this metric to hone in on the types of events that have higher participation rates and emphasize these types of events.
  • Employee Retention Rate - Tracking your employees that stay vs. leave gives you measurements on your retention rate. This is helpful in understanding the length of time that new hires will likely stay, the positions you will have to hire for more frequently and the candidate sources that are providing the most committed employees.  
  • Avg. Employee Tenure - Want your employees to stay with your company longer? Track average employee tenure to gain valuable insight into the cohorts of employees with the longest tenure at your company.

Employee Development Metrics

Employee development and training metrics help you measure and optimize the performance of your development programs. A vast majority of metrics will be tailored to specific employees or teams at the micro-level, but you can also measure participation and engagement at a macro-level.

  • Training Participation Rate - This is the percentage of employees who participate in employee development and learning activities. It’s useful in measuring employee engagement and if you’re offering the right type of training programs to your company.
  • Employee Promotion Rate - Naturally, as you build career paths and development programs for your employees, you’d expect them to be promoted within your company. Tracking the rate of promotion can be a valuable asset in your talent acquisition efforts and succession planning.
  • Employee Skills Data - Public, informal data is widely accessible and updated on platforms such as LinkedIn. Using analytics tools, you can pull that information to see if employees are adding new skills that coincide with development programs / initiatives.

Employee Benefits Metrics

Your company may spend millions in employee benefits, so it’s in your best interest that they’re adding value to the lives of your employees. Track employee benefits metrics to understand which benefits are the most popular and which you can drop.

  • Benefits Participation Rate - This is the percentage of employees who are participating in a particular benefit plan or program. Benefits participation rate is useful in determining if new HR sponsored programs or benefits are popular. If you find a low participation rate, then you can reinvest the allocated capital into a new or more popular program.
  • Benefits Satisfaction - Using NPS, you can easily gather analytics related to benefits satisfaction. This metric will help you further measure the effectiveness of your benefits program and of specific benefits you offer.

Labor Market

The US Bureau of Labor Statistics regularly releases metrics that you can use within your analytics systems. All of their labor force metrics can be used to analyze the market competitiveness and trends that can influence your talent acquisition efforts.

  • Labor Force Participation Rate - This the ratio of people actively participating in the US workforce vs. the total number of people above the age of 16 who are eligible to be in the workforce. This is a good indicator of the overall engagement levels of the US workforce.
  • Unemployment Rate - Measures the total unemployment rate for industries, states as well as the country. This metric is valuable for seeing how many available candidates there are in you area and in your industry.
  • Employment / Population Ratio - This is a measure of the total number of employed people in a city, region, state or country, divided by the total number of people eligible to work in this area. This metric shows you the rough size of the candidate pool that can be drawn upon in your area.
  • Average Salary By Role / Industry / Department - This metric is essential to track and essential to match when deciding how to compensate employees. Above-average compensation will be required for above-average talent, and below-average compensation will not generate much interest for qualified candidates in your area.
  • Average # of Work Injuries - This safety metric is essential for logistics, manufacturing, heavy industry and similar companies, and will affect everything from insurance rates to a company’s ability to attract talent.

Competitor Analytic Metrics

With the wealth of public data available, you can leverage your internal HR Data systems to compare your company’s metrics to the public data of competitors.

Below are some great ideas for HR Competitor Analytics that you can measure.

  • Avg Salary from Competitors - Use the average salary offered by competitors (available on public data sources) to benchmark if your compensation rates are competitive to your market generally and by job type. This is a great way to understand if you’re losing great candidates because of salary and benefits.
  • Volume of Open Jobs by Industry / Position, etc. - Measuring the volume of your competitors’ open jobs by role can be a good indicator of their growth rate relative to yours. This metric can also provide insight into the areas that they are particular weak, or focusing more resources on.
  • Employer Brand Rating / Glassdoor Rating - Keeping track of employer brand analytics such as Glassdoor ratings can provide insight into whether your company is better or worse than your competitors in terms of your overall brand and employee satisfaction ratings. This data can be used to improve your company or as a competitive takeaway for your candidates when evaluating your opportunities.
  • Employee Migration Reports - Using publicly accessible data, you can analyze what companies your managers (or employees by role) are most commonly migrating to, and even run the same level of analysis on your competitors. This can provide valuable insight into which companies are providing the greatest incentives to spur movement, and which competitors can be targets for poaching new hires.

Data-Driven Decision Making from HR Analytics

Your HR data is valuable. So valuable in fact, that you need to be using it make informed decisions about your human resources.

But oftentimes, this data is separated into several different silos, making it increasingly difficult to move beyond basic metrics. This is why Data-Driven HR departments require the proper foundation for their HR analytics.

Here is the foundation for ensuring you have quality HR data.

  1. Proper Data Governance.
  2. Analytical capabilities to turn your HR data into insights.
  3. Adoption of a data-based decision making process.

Proper data governance is the most difficult part of realizing a data-driven HR department. The challenge here is connecting your manual data, all of your data sources, integrating all of those systems, and pulling all of this information into a data repository or data lake. The easiest way to ensure proper data governance is to use a tool like SwoopTalent.

SwoopTalent acts as a middleware piece to your HR ecosystem that integrates all of your HR tools, as well as public data to create a data lake. Then, you’re able to easily turn that HR data into insights using SwoopTalent, which looks like the screenshots below.

[Click here to see a demo of SwoopTalent. ]

As an HR leader, or HR analyst, tools like SwoopTalent become integral into building our your HR analytics and data plans, especially as Big Data analysis becomes the norm in HR .

Big Data and Human Resources

As data sets continue to increase in HR, so will the need for a data governance tool like SwoopTalent.

Big Data in HR refers to massive and quickly growing data sets as they relate to current employees, past employees, active job candidates, passive candidates. These data sets can include skills, performance ratings, education history, work history, performance, background and more. These big data sets in HR help modern HR teams evaluate and improve practices in talent acquisition, development, and retention.

The biggest problem for HR departments has been the lack of solutions to compile these big data sets, analyze them, and turn those insights into action.

To learn more about how you can start leveraging Big Data to predict employee performance, increase retention, improve quality of hire, and more, then click here.

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