7 Tips for Effective Utilization of HR Analytics

7 Tips for Effective  Utilization of  HR Analytics

HR analytics is proving to be the order of the day. Effective utilization of HR Analytics is revolutionising the way organisations are reinventing themselves and the way they measure and track success. They are also trying to do it , by aligning the HR metrics with business objectives.

It is the opinion of the author, that the readers should go through the following three blogs ,which, Ripples has published earlier.

HR Analytics: Meaning and Importance

How to Get Started with HR Analytics in Your Organisation

Best Books on HR Analytics

The following 7 tips may prove to be useful in effective utilization of HR analytics at the workplace.

1. Consult all the stakeholders involved in the utilization of HR Analytics

Before taking the initiative to start an HR analytics project in your organisation , you must consult all the stakeholders. It will help you ,thus, in enhancing the effectiveness of utilization of HR analytics.
It is a known fact that metrics of HR analytics specifically, belong to the HR function. Yet, it has immense bearing on other departments too.
For example, absenteeism, while measured by the HR department, may be a critical issue for the production department too.

Similarly, high turnover rate of employees may be an issue for the HR department itself, but it also has a bearing on the overall organizational effectiveness.

Total cost per employee or compensation / benefits versus revenue rate may be of interest to Finance department.

2. Be sure of what data you should collect and how to manage it

utilization of hr analytics requires data to be effectively collected
Photographer: Franki Chamaki | Source: Unsplash

We must bear in mind that it is not only the quantity but also the quality of data that matters.

Hence, the following tips are extremely important in data collection , data analysis and interpretation. They ultimately pave the way for effective utilization of HR Analytics.

– Collecting enough data and look closely at each of them

– Data cleansing and its classification as per our metrics

– Digitization of data of HR department and also the organisational data

– Taking clearance from the legal department for sensitive data handling
Adequate planning for collection, storage, management and analysis of data , which, we collect,,should be the top most priority. Hence, a very competent data management team should be there, to do the needful.

3. Ask the question ‘Why’ and ‘What’ to define the critical issues

Asking ‘Why’ and ‘What’ questions ,and discovering the real problem, is the key to utilizing HR analytics effectively. Also, we should find out the real causes of the problem.

For example, if the turnover rate of employees is high, then it is an ominous sign. In that case, find out what are the reasons for the high turnover rate of employees.
We must bear in mind that the high turnover rate maybe due to any of the following:

– Wrong recruitment and selection process

– Disengaged employees

– Wrong work culture prevailing in the organization

– Inadequate emotional culture in the organization

– Salary, benefits and perks to the employees

– No emphasis on wellness programs for employees

– Improper work-life balance

– Wrong location of the unit or organization

– No connectivity among employees

– Level of satisfaction among employees

The best practice will be to ask questions from the employees and know their views.

4. Match the HR metrics with business metrics to strategize the approach

Combining business metrics (like performance or productivity ), with HR metrics (like personality assessment data pertaining to employees) , may reveal what is the real reason for any problem.

You may also study the following:

– Did the salary increase or providing incentives help in improving the performance or increasing the productivity

– Is the skill level of the employees inadequate

5. Determine the solutions arising from utilization of HR Analytics

Building the solutions will be a continuous process, after taking the above mentioned four steps. Taking the example in points 3 and 4, if you find that the high turnover rate was due to limitations of the company culture, then in that case, start taking steps to improve it.

If the reason was disengaged employees, then we must take initiatives to make them engaged.

6. Be always on the alert and track only what aligns with business

Effective utilization of hr analytics rquires leaders have the primary responsibility to understand and help the HR analytics professionals, in outlining the clear-cut objectives they want. In this case, we have to incorporate the correct business metrics, in the HR analytics system, to optimize business goals or outcomes.

7. Monitor and Review for effective utilization of HR Analytics

Utilization of HR analytics requires ongoing monitoring
Photographer: You X Ventures | Source: Unsplash

Continuous monitoring and review of the whole gamut of activities, pertaining to enhancing the effectiveness of HR Analytics is a must.
Sometimes, it happens that unknown hidden facets may be there, putting a great obstruction to getting the right solution.
Coming to the high turnover rate of the employees, following aspects may also play a major role. Maybe, we had not considered these aspects earlier, or we may have overlooked them, but they could be really very important.

– Lack of an effective exit-interview process

– Lack of career-pathing

– Insufficient training and skill enhancement opportunities

In nutshell, seven tips, as listed above may prove to be beneficial in utilization of HR analytics effectively. However, we must remember that HR analytics is continuously evolving itself. Hence, the need is to remain updated on the topic , through recent innovations in the field. This will help us in revisiting our approach to reap the rich fruits of HR analytics.

If you are looking to upgrade your skills in HR Analytics, you might want to consider a certification in HR Analytics by CHRMP. To learn more click here.

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