Why HR Analytics Matter

HR leaders know that HR analytics are vital for the performance of companies, but it’s key to articulate the importance of HR analytics in a way that everyone understands.

If executives at your company are asking questions like “what is HR analytics and what is its importance,” then one of your top priorities has now become to bridge this knowledge gap.

Without buy-in from senior leaders, HR analytics initiatives will never reach their full potential and may never begin in the first place.

However, when your company’s leadership does understand the importance of HR analytics, one of your company’s most valuable resources can be used to its full potential and prove its value, time and time again.

Here are the top reasons why HR analytics matter for your organization.

Meeting Corporate Goals

To start, HR analytics are instrumental in meeting your company’s goals this quarter and this year.

HR analytics allow companies to more effectively align their workforces with their corporate strategies, which is a distinct advantage for overall company performance and the performance of specific business units driving the progress of various ongoing initiatives.

For example, companies who have best-in-class workforce engagement rates consistently report earnings-per-share values that are 4x greater than their disengaged competitors.

Another good example is meeting the target release of the next generation of a product. If HR analytics are leveraged to decrease turnover on the development team, then this product will be launched sooner than if the team is losing key members along the way.   

Then, there are the negative examples.

From the performance stagnation resulting from “brain drain” to the PR nightmares resulting from a culture where sexual misconduct incidents aren’t tracked and don’t influence policy, we are all familiar with the negative results of failing to utilize HR analytics.

This is why HR analytics is important: completing your corporate objectives depends on the micro-level efforts of your employees, whose performance levels are directly affected by the design of their roles and work environment, which are optimized by HR analytics.

Talent Acquisition

Talent and talent acquisition are front-of-mind for many leaders and may be the area that your executives most easily associate with HR analytics.

The talent of leaders and employees in key positions, as well as the general talent levels present throughout your company’s workforce, determine the performance levels of your company as well as the initiatives and strategies your company can conceive of and execute.

HR and analytics should always go hand, because HR analytics allow you to improve talent outcomes in the following ways:

• Identifying the most effective job marketing strategies and channels for primary revenue generating roles, strategic roles, management roles and other vital roles.
• Quantifying ROI for employer brand initiatives, community outreach, charitable/cause activities and other broad employer brand/talent acquisition efforts.
• Testing the effectiveness of brand and employer brand adjustments in terms of appeal to target talent demographics.
• Measuring the extent of any damage to your talent acquisition capabilities resulting from PR incidents, negative online reviews and other brand detractors.
• Identifying candidate sources that consistently deliver candidates with the highest levels of performance and potential.
• Identifying the competitors that you are able to most easily make the best hires from.

Employee Performance, Satisfaction, Retention and Development

HR analytics turn your employee performance initiatives from expensive guess work into a scientific, results-driven process.

The more effectively you can provide an optimal work environment, the more your employees will engage and drive performance on an organizational level.

HR analytics allow you to:

• Accurately identify skill gaps in individual employees and prescribe personalized skill development courses to improve individual and overall employee capabilities, on a company-wide scale. 
• Measure ROI of workflow improvements, engagement/team building exercises, team-restructuring and other performance focused initiatives, allowing you to pick winners and losers.
• Identify employee KPIs that heavily correlate with leadership potential, advanced technical skill potential and other traits required for employees to succeed in senior roles.
• Identify workplace conditions, practices and policies that have the highest effect on employee satisfaction.
• Identify the most common causes of workplace accidents and incidents.
• Measure the ROI of health initiatives for decreasing accidents and sick days, as well as increasing employee satisfaction, employer brand perception and work/life balance ratings.
• Measure the ROI of new software adopted by your company for increasing employee performance, employer brand perception and job satisfaction.
• Identify the most common causes of turnover and adjusting the responsible policies or more effectively managing the responsible parties.

Deep Dives and Strategic Insights

Given enough data, there’s no limit to the number of strategic insights that can be drawn or the depth of dives that can be made through HR analytics.

HR analytics can answer incredibly complex questions and find solutions to your organization's most persistent or enigmatic workforce problems.

Here are some examples of the strategic insights and deep dives that can be made:

• Projecting the effects of identified skill gaps to determine the timeline on which these skill gaps decrease profitability enough to justify the expense of extensive workforce training or a large volume of skilled hires.
• A / B testing employer brand development strategies to optimize employer brand for talent acquisition and employee retention.
• Identifying new hire traits that have a high correlation with long term success in your company to improve new hire selection.
• Identifying hiring policies, practices and individuals who are having a negative effect on diversity levels at your company.
• Identifying the company performance, brand strength, employer brand positioning and other factors influencing top employees to choose specific competitors.
• Measuring the ROI of management initiatives.
• Identifying the most common time sinks that your employees experience.
• Optimizing the structure of meetings at all levels to increase effectiveness and employee engagement levels.  

HR analytics allow your organization to improve according to statistical analysis, not well-intentioned guess work.

SwoopTalent helps companies to collect, store and use HR data more effectively and drive the effectiveness of their workforce analytics to the next level by providing talent data as a service.