HR analytics can form a backbone of human resource function of all organizations independent of the sector in which it operates. HR metrics also known as talent analytics or peoples metrics is a sophisticated application of data mining and data analytics techniques applied on people-related data. HR analytics are an essential way to quantitatively gauge the spend and the outcome of employee engagement programs and HR systems to measure the effectiveness of various HR initiatives. They provide the companies with the power to measure year on year comparisons on various parameters.
HR analytics enables the company with powerful insights to effectively manage employees to reach the business goal quickly and with high productivity. Challenges abound in this field as to identify what kind of data need to be captured, stored and processed and how to build the model and predict capabilities to maximize return on investment spent on its human resources.
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Application of HR analytics:
HR analytics finds its application in the various business functions. The core functions of HR like recruitment and training, mergers and acquisitions, designing compensation structure, improving performance appraisal processes are revolutionized by applying analytics to the historical data. HR analytics helps us to find problem areas, investigate on the root cause and issues surrounding these problems and using data mining and predictive analytics workflow will enable the HR professionals to unlock the answers for different questions and gain insights from information and take appropriate and relevant decisions.
Some emerging niche areas in HR analytics:
Employee sentiment Analysis:
A lot of systematic and unsystematic information relevant to employees is available to the HR which can be leveraged to create, measure and redesign the policies. Sentiment analysis involves more than just the annual surveys. The data should be continuously tracked, analyzed and scrutinized on key topics. External data like Facebook, Twitter, LinkedIn etc. provide valuable feed for sentiment analysis.
Employee Fraud management:
Analytics minimize the threat of internal fraudulent practices from employees through non-compliance by identifying employees at high risk to violate security policies or other company regulations. Once the employees risk is assessed proactive actions could be taken for corrective actions.
Specific problems addressed by HR analytics:
- To establish most efficient recruitment and training process.
- To design career development initiatives.
- Instrumental in prioritizing and ranking the applicants in the order of their job fit to the role.
- To forecast human resource requirement and design a best plan to fill the open roles
- To maintain high work force utilization ratio in order to maximize the return on spent on human resources.
- To maximize workforce motivation to link them to strategic and financial goals of organization to ensure high business performance.
- To bring down the costs on human resources and optimize the financial spend on training and recruitment.
- To control employee attrition by identifying the reasons for employees to leave the organization and to design policies to bring down attrition.
- To optimize the employee payment, benefits and compensation structure and maximize his level of satisfaction at the same time saving cost to the organization.