How to make better HR decisions with people analytics

How to make better HR decisions with people analytics

HR Club organizes the master class "A Fresh Perspective in People Analytics" on March 27 at JW Marriott Bucharest Grand Hotel

Technology has transformed the business environment in a number of ways, from new tools that we use at work to robots that replace certain employee responsibilities.The HR function also benefits from technology advancement, using labor analysis techniques, or "people analytics" to make data-based decisions.

What includes people analytics

The concept refers to the analysis of employee-related data that can support decisions on hiring, retention, workforce planning, the efficiency of training programs and can even predict employee performance. A survey by Deloitte in 2017 shows that 71% of companies see investment in human analytics as a priority, but only 8% say they have the data needed to implement the processes.

Although spending on human resources exceeds, in many organizations, marketing, acquisition and development, the analysis of HR investments is still at a primary level due to a lack of information. Industry professionals need intensive courses to understand how scientific analysis is made and how to streamline invested budgets to achieve business goals.

Benefits of using people analytics processes

The human resources function, as well as the other functions in companies, must demonstrate the value of the investments made to the senior management team. According to a McKinsey study, companies using people analytics are 80% more efficient in recruiting, 25% more productive in business, and 50% more successful in employee retention. In addition, organizations from different fields have seen the results of using HR analysis techniques.

A global financial services company has used an algorithm to determine which employees are most likely to leave the company, and the retention programs implemented have saved over 70 million dollars in a year. A multinational energy company has managed to reduce the number of days of sick leave by allocating different days of holidays throughout the year, and a chain of restaurants has been able to identify the most important factors to intervene and which have led to increase employee performance and revenue.

First Steps to Implementing Decisions Based on Data in HR

In the past, most decisions to allocate and implement human and financial resources were based on managers' instinct, which can also lead to unsatisfactory results due to unconscious prejudices. Instead, advanced quantitative methods can supplement the information available to improve the results of HR processes.

At the bottom of implementation of any people analytics processes are the workforce information. Thus, HR professionals need to have data about:

  • Recruitment: the channels from where the best applicants come from, what kind of profiles do the long-term performance, the sources of possible delays in the recruitment process and how they can be avoided;
  • Performance at work: time spent per task, assignment of labor depending on period and business cycle or pattern of absenteeism;
  • Retention and benefit analysis: what are the benefits used and considered valuable by employees, which is the average employment time per department and function, which is the efficiency of the training programs.

Companies that are using scientific advanced techniques of people analytics have a better understanding of investments that deliver HR results, but many early-stage professionals do not know how to prioritize the processes they first intervene. Thus, they use a technique called value profiling.

The value profile identifies the most important workforce processes but is not effective. The information is then presented in a matrix like this:


In this case, the most important action to improve the contribution of human capital to business objectives would be to make the recruitment process more efficient. Matrices such as the above are obtained through structured questionnaires with senior management, a part of HR staff and a selection of operational and executive employees to understand the importance and efficiency of HR processes.

To support HR professionals and the senior management team in implementing people analytics strategies, HR Club organizes Max Blumberg's master class "A Fresh Perspective in People Analytics". Max is the founder of Blumberg Partnership and one of the top 50 influencers in HR Analytics.

The event will be held at the JW Marriott Bucharest Grand Hotel on March 27, and the guests can find out more about the agenda and can sign up on the site: https://hr-club.ro/ro/masterclass-maxblumberg.