Getting comfortable with “people analytics”: the data-driven future of HR

HR professionals often have to be all things to all people, but even so, you’d be hard-pressed to find someone who would describe their organisation’s HR team as data analysts.

While big data has massively changed the way some sectors work, HR has not yet embraced the data revolution in the same way as other industries.

HR has never been the domain of data scientists and analytics gurus. A survey by the CIPD found that only 21% of HR professionals were confident with advanced data evaluation methods, such as predictive analytics.

Yet, with vast amounts of data providing valuable insights into employees and organisations, HR professionals must be prepared to use a new, data-driven approach and get comfortable with using figures.

How can you use analytics to solve challenges?

“People analytics” has the potential to extend into every facet of the sector. HR professionals can use data analysis to improve employee retention rates, observe best recruitment outcomes or even track the most effective incentive programmes.

As an example, organisations are coming under increased scrutiny over issues related to diversity, equity and inclusion – with the biggest discussion surrounding the gender pay gap.

Using available data-sets, including salaries and performance ratings, HR teams will be able to establish the discrepancies between men and women which are causing a pay gap. Once armed with these insights, HR professionals can use them to make better decisions on how to address the issue.

Predicting the future

Predictive analytics, a sub-section of people analytics, is becoming imperative for optimising how HR departments operate.

Imagine if you were able to predict the point at which an employee is most likely to leave your organisation? Or forecast whether an applicant will turn into a highly valued employee? Perhaps even identify the skills which will be most valuable to your organisation both now and in the future?

Envision all the actions you would be able to take if you had foresight on all of these issues. That’s the power of predictive analytics. By mining organisational data, you can discern the key patterns and trends and create modelling to forecast when you need to take various actions.

You’ll be able to proactive in your approach, rather than constantly reacting to issues as they arise.

Why use analytics?

Given the cost of either upskilling or hiring HR team members with analytics skills, why should HR professionals embrace the analytics wave?

Simple. If HR wants to be seen as a strategic function with real influence on organisational strategy, the department needs to speak the same language as key decision-makers.

That requires strategy backed up by data. Trying to convince your CEO and CFO to invest in a new employee benefit won’t happen if all you have to go on is a gut feeling. Showing them insights which demonstrate the benefit will improve retention or grow your pool of applicants leaves a much greater impression.

However, as with all tools, analytics are only as good as the human using them. HR won’t become an exercise where humans just implement what data tells them to.

There will always be a number of different options HR teams can choose from following data analysis. Analytics exists to provide as much relevant information as possible to make decisions.

Even as people analytics are adopted across the sector, it will still be down to HR professionals to make the right decisions, based on their experience and judgement.

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