HR Analytics can hardly be called the current ‘buzz phrase’. The term has been knocking about for several years now, it’s firmly here to stay, and with good reason. However, many companies are still proving slow to make the move from standard reporting to HR Analytics. Given the wealth of advantages analytics has over standard reporting businesses don’t want to get left behind. Fear of technology should not prevent us from embracing it, and once a business has had it demonstrated what Analytics can do for them, it will be hard to look back.
Standard Reporting – The Problems
HR has always had a tricky personality problem. Whilst times have changed and HR firmly has its foot in the management door, it can still be left justifying its mere existence against old-school critics.
Standard HR reporting doesn’t help this image. The reason being, standard reporting is too much like the Personnel data of old. Further, standard reporting being drawn from data which may or may not be complete, and coming from several sources, is likely to be rife with error. It’s authenticity and reliability is questionable from the start.
Even if the data presented to business leaders in a standard report is accurate, it’s hard to get real meaning from the data. With the technology available at our fingertips to truly analyse and verify data, standard reporting and its interpretation is lacking.
HR Analytics – The Solution
The CIPD has asserted HR analytics “enables better decision-making by providing an organisation with insights about the workforce and the HR policies and practices that support them”. This is the crux of the argument for why HR Analytics beat standard reporting. In short: they allow better business decision making.
The by-product of this is that HR managers have at their fingertips a valid, quantifiable business case for HR. They become a true business partner. Data on the human capital of the business which can be analysed, and therefore utilised, is incredibly valuable to business success. Big names like Talk Talk are finding that HR Analytics enables HR to be “taken incredibly seriously”.
In the current economic climate, and with a constant pressure to become more productive, getting the best from your human capital is paramount. HR Analytics can take the basics of data recording and turn it into a tool that capitalises on the information. HR Analytics enables an organisation not only to record data such as holidays taken, sick leave, timesheets, expenses, recruitment stages, performance metrics, and employee engagement but to actively interpret and understand what that data means for the business.
If the business leaders can gain a better understanding of their individual teams and varying productivity, they can strive to ‘fill the gaps’. They can make better decisions on performance management or training requirements, or who they really need to recruit. Analytics provide insight and do it with a speed that is simply not possible with standard reporting.
Furthermore, drilling down through the data with HR Analytics makes it possible to gain an even greater understanding and therefore take even the most detailed business decisions with confidence. For example, Analytics will allow a business manager to ask ‘Why does employee A consistently outperform employees B, C, and D?’ and be able to come out with quantifiable understanding rather than supposition. They can understand exactly how long a new employee takes to become productive, or the impact of a particular training scheme, or when sickness illness hits their department worst.
Fundamentally, HR Analytics make your data relevant. There is no point in having the employee data that most businesses do if you can’t appropriately access it and use it.
HR Analytics and Employment Law
HR Analytics provides business leaders with a concrete way of staying on the right side of Employment Law. With analytics used appropriately, it is possible to utilise employment data to support decisions in all HR areas. For example, in recruitment HR Analytics allow you to quantify exactly why candidate A was chosen in preference to candidate B. In payroll, analytics enable you to see there is equity in pay for same-level employees. In training, Analytics allows you to see the Return on Investment for a certain training strategy. With redundancy, performance metric analytics allow you to make tough decisions backed up by quantifiable data.
HR Analytics is a more ethical and less subjective way of looking at and acting on, matters in the business pertaining to your human capital.
HR Analytics – Validity and Credibility
Technology is continually advancing, and this is as true for HR Analytics as it is for any other area of business. 15 years ago an HR system that recorded employee data and could generate standard reports was cutting edge. Now that’s simply not enough.
HR Analytics is only as credible as the data they draw on. However, the best HR systems are now more holistic and easier to use with greater reliability. An HR system like Natural HR removes the need for various different software which all involve data entry and can’t integrate. Holistic HR software links naturally to HR Analytics and the generated information is consistent, valid and credible.
Importantly, HR Analytics allows for a better Return on Investment within the business and the ability to measure human capital against Key Performance Indicators. This saves time and enables HR managers and business managers alike to make informed, backed-up, decisions.
The Future of HR Analytics v. Standard Reporting
As technology progresses, HR Analytics will become more and more a baseline standard for business decisions. Standard HR reporting will continue to lose its credibility in the face of a more reliable interpretation of data, and data analysis that has a wider scope and purpose.
The case for HR Analytics over standard HR reporting is compelling. The impact on the human side of the business is valuable and ethical, and the impact on the bottom line and productivity will be welcomed by business leaders fighting it out in an increasingly competitive world.
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