Data is the new oil, and this holds true for the HR industry as well. Using an analytics-driven talent strategy HR professionals today are able to tap into data in more creative and more effective ways. Combining their HR expertise and available tools, they are able to gain deeper insights with respect to their workforce, so as to transform the KPIs of the company they’re serving, and make it future-ready.
If you’re in search of ways to make your company’s HR resources and processes more effective, you shouldn’t disregard the fact that data can be the lifeblood of every human-resources operation. When you focus on harnessing HR data with advanced data techniques, this can help revolutionize the way your company produces value, as a whole.
Below we’ll give you an overview of what it means, in practice, to focus on an analytics-driven talent strategy.
Analytics and their application in the HR industry
First, let’s have a look at what we mean by the term analytics. In analytics, systematic processes are applied to large sets of data in order to discover meaningful patterns. Several mathematical, statistical, and computer programs are used to accomplish this. Analytics apply to various business aspects including – but not limited to – marketing, customer relationship management, finance and so forth. As we’ll describe below, integrating this promising/thriving field of computer science into HR processes has a host of benefits. By improving various related decision-making processes, tangible business actions can be taken that serve both short- and long-term business goals.
Now, as for the industry-specific terminology used to describe relevant HR processes we’d say that there are several relevant trending terms. This includes, but is not limited to, people analytics, workforce analytics, HR analytics, and HR metrics. As a matter of fact, the last-mentioned term is actually an umbrella term, used to identify available measurement systems. These systems are used by the HR departments, in order to evaluate various performance indicators. The “HR analytics” term, on the other hand, refers to metrics and processes used to evaluate the efficiency of the HR department. In particular, HR analytics may help answer questions, such as:
- When a hiring need arises, how quickly does the HR department respond (time-to-hire)?
- How long does it take to properly remove employee access after they have been terminated?
It is also worth noting that the aforementioned terms are, in some cases, used — if not misused — interchangeably. On our part, below, we’ll focus on people analytics; as this term better describes the area of analytics-driven talent strategy we’re discussing.
What do we mean by analytics-driven talent strategy?
With an analytics-driven talent strategy, companies are able to tap into people and business data, with the aim to make wiser business decisions. This is usually accomplished with software solutions that allow HR teams to follow systematic scientific processes and make the most of a wealth of data. These data sets range from basic HR data sets, such as demographics, time spent at work, and absenteeism rates to more sophisticated data sets related to assessments, movements, and development of employees.
In the process of connecting the dots, HR professionals are capable of making sense of metrics that will assist them in optimizing business outcomes. More specifically, they focus on metrics relevant to revenues and costs, performance and customer satisfaction, and so forth. And, by using relevant metrics as part of their analytics-driven talent strategy, they are able to answer core questions, such the following:
- What was the cost of absences to the organization the previous year?
- Is there a (fact-based) correlation between performance and pay?
- How did new hires affect the quality and productivity of the workforce? What was the exact increase/decrease in this rate?
Why it’s important to implement an analytics-driven talent strategy
It may be already obvious to you, as to why it is wise to use an analytics-driven talent strategy. Yet, it is worth making it a little bit clearer, with a few additional arguments. First of all, HR professionals tend to make biased evaluations, using insufficient information; or, much worse, misleading input, subjectively justified by managers. Also, in an absence of relevant strategies and tools that support them, access to real-time, updated and value-creating, people-related data is a will-o’-the-wisp. Thus, it is difficult to draw a line between said conclusions and immediate business actions. Put another way, collaboration between HR people, managers and executive teams, on the whole, lags behind. And, failing to do so, translates into increased business costs.
Now, let me lift the veil for you, of what it means to employ an analytics-driven talent strategy, in terms of benefits. Below is a list of indicative benefits you’ll enjoy, if you decide to move away from basic HR reporting and base your people decisions and your business strategy on more mature approaches:
- Ensure that decisions are based on evidence and data; and leave behind gut-feelings.
- Empower management teams to cooperatively develop and implement solutions based on data.
- Improve talent experience, from day one. For example, based on the data you have collected, related to your new hires, you can easily create customized onboarding experiences, from scratch.
- Make well-informed decisions, with respect to your employees’ development and growth.
- Improve the employee journey and increase both engagement and retention.
- Determine the ROI of decisions, relevant to how you manage talent in your company.
Utilizing the right data with the right techniques and for the right purposes offers indisputable value to companies that are mature enough to practice the relevant strategies. Same is true for human resources management teams that use advanced methods and systems; not only to produce workforce evaluations and forecasts but, also, to deliver the greatest possible impact on business performance. How? Employing an analytics-driven talent strategy, helps take the guesswork and the subjectivity out of the management practices already applied; and help companies get the best from their people. Answering core business questions and defining short-term actions and long-term goals, in collaboration with managers and executive teams, HR departments’ role is critical in connecting the dots and driving strategic decisions forward.