Human resources professionals encounter a large amount of data every day. When used correctly, this data can help increase profits and even generate revenue. The term for this deep dive into your HR data is using "HR analytics." HR analytics is defined as the interpretation of metrics for various HR-related functions. Examples of this can include training expenses per employee, the time it takes to hire a candidate, or the time it takes to promote an employee.
HR analytics can be:
Descriptive. Data-filled dashboards can display metrics collected in the past.
Predictive. Past data can help inform a model that includes future outcomes.
Prescriptive. You can then use that data to make recommendations leading to specific actions intended to optimize performance.
HR analytics is only growing in popularity. Consider the following numbers from the healthcare industry alone:
A survey of 200 healthcare providers and payers saw the use of predictive analytics increase by 13% from 2018 to 2019.
29% of those executives who didn't currently use predictive analytics plan to implement it within the next five years.
One report found that a majority of healthcare executives dedicated 15% or more of their financial resources to predictive analytics in 2019. The goal? To save their company 15% or more over the course of the next five years.
Why do these trends exist? Because C-suite level executives are noticing the financial savings their competitors are receiving without sacrificing quality.
So, how can HR analytics help you and your team review data from the past and then use it to serve you in the present and the future?
Your dashboard can serve as a powerful tool in your analytic toolbox. It paints a clear picture of your organization's HR reality. You can use a dashboard to track turnover rates within your company, using categories such as operating units, tenure, and job level to differentiate your searches. This enables you to compare individuals between units.
From a fiscal standpoint, it allows you to compare your vendor costs and see how they stack up to national and regional averages. This gives you a better handle on how your competition is managing their finances as well.
HR analytics tools can also use your data to help forecast future activity as well. They can predict your organization's unique staffing needs while also anticipating any potential human capital requirements. You can also use these tools to more accurately predict your upcoming attrition rates while addressing any risks associated with that.
Talent management and human capital management are both critical components of the HR department. Predictive analytics tools enable you to see where both areas are heading and fix any issues that appear on the horizon.
Prescriptive HR analytics can help determine the actions your organization needs to take to reach a goal. For example, if your aim is to reduce contingent labor costs, prescriptive analytics can tell you how to do that. Predictive analytics can only show you what the costs will do going forward. Prescriptive analytics can help support your staffing strategy by giving you valuable insight into areas such as staff turnover, how well you're using contingency staff, and employee morale.
Data Collection Requirements
HR analytics also assist with your organization's data collection requirements in a number of areas where having data is critical, including:
Performance reviews with multiple supervisors reviewing
Employee salary and promotion history
Staff turnover rates
Contingent labor spend figures
Number of locum agencies used
Keep in mind: you'll need to pull raw data from physical invoices to input into your tool. This data will likely come from multiple information sources. This takes time and manpower.
How to get started with HR analytics
HR and data analytics expert Tracey Smith said it best when she said, "The entry of data analytics into HR is one of HR's greatest opportunities to modernize the function and raise its level of value. We often speak of migrating HR from its historically tactical function within a business to being a strategic function."
Getting started with HR analytics means aggregating and inputting data that will lead to your organization utilizing descriptive, predictive, and prescriptive analytics. These will help you examine where you've been, take note of where you are, and help recommend the most effective path forward - all using data culled from your HR department.
Interested in taking the first step of aggregating and inputting your data? It's done for you when you request a complimentary workforce optimization review from VISTA Staffing Solutions. For more on how we can help, contact us today!