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Importance Of HR Analytics

2899 Words12 Pages

In today’s business world, CEOs feel comfortable in taking decisions based on data. Hence, analytics is given such importance nowadays. The HR function is no exception to this trend. The recent boom of developing HR analytics capabilities in organisations is indicating that it is the next big thing to transform the workplace and workforce. In this white paper, we have explored the scope of HR analytics, framework of HR analytics, how to implement the same in organisation, barriers to implementation, current practices, benefits of HR analytics and the way forward.
HR analytics measures the effect of HR programs on performance of companies and helps to prepare strategies for the business. HR analytics processes are used mainly for talent acquisition, …show more content…

As a result, nowadays, even though HR is recognised as a strategic partner to any business, very few organisations can measure the real value their workforce adds to their business (Mayo, 2008). While the future belongs to Big Data and Hadoop, HR still concentrates on collecting and reporting data about activities only i.e. descriptive metrics whereas it should concentrate on outcomes i.e. predictive analytics (Ulrich, 2010). To achieve the same, organisational HR departments should take the EBM approach. This paper highlights the importance of EBM approach and HR analytics, which might transform the workplace in the future.
Definition

HR Analytics can be defined as “a methodology for understanding and evaluating the causal relationship between HR practices and organizational performance outcomes (such as customer satisfaction, sales or profit), and for providing legitimate and reliable foundations for human capital decisions for the purpose of influencing the business strategy and performance, by applying statistical techniques and experimental approaches based on metrics of efficiency, effectiveness and impact” (Lawler, Levenson & Boudreau, 2004; Boudreau & Ramstad, 2006).
Purpose of HR …show more content…

Therefore, it’s a very powerful tool in the hands of the HR department to add value to their organisations (Lawler, Levenson & Boudreau, 2004).
Applications of HR Analytics

According to Harris, Craig and Light (2010) there are five different categories of human capital analytical applications, which are as follows:
• Identify and manage critical talent (e.g., high performers, high potentials, pivotal workers)
• Manage critical workforce segments accordingly (e.g., underperforming units are identified and helped to improve)
• Predict employee preferences and behaviours and tailor HR practices to attract and retain talent
• Forecast business requirements and staffing requirements (e.g., workforce skills needed in different business scenarios)
• Adapt rapidly and scale recruiting supply channels and targets to meet changing business conditions, objectives, and competitive threats.
Some of the other uses HR analytics may have

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