Meaning and Role of HR Analytics¶
HR analytics, also known as people analytics, workforce analytics, or talent analytics, is a data-driven approach to managing people at work. It involves analyzing people problems using data to answer critical questions about your organization, enabling better and data-driven decision-making.
“HR analytics is a methodology for creating insights on how investments in human capital assets contribute to the success of four principal outcomes: (a) generating revenue, (b) minimizing expenses, (c) mitigating risks, and (d) executing strategic plans. This is done by applying statistical methods to integrated HR, talent management, financial, and operational data,”
Analytics is defined as the interpretation of data patterns that aid decision-making and performance improvement. HR analytics is defined as the process of measuring the impact of HR metrics, such as time to hire and retention rate, on business performance.
Human resources is a people-oriented function and is so perceived by most people. But for those who think that the HR team’s contributions are limited to extending offer letters and onboarding new hires, human resource analytics (HR analytics) can prove them wrong. When used strategically, analytics can transform how HR operates, giving the team insights and allowing it to actively and meaningfully contribute to the organization’s bottom line.
What Is HR Analytics?¶
To understand the essence of HR analytics and to explain how it impacts business performance, we asked Mick Collins, Global Vice President, Workforce Analytics & Planning Solution Strategy and Chief Expert at SAP SuccessFactors, to break it down for us.
“HR analytics is a methodology for creating insights on how investments in human capital assets contribute to the success of four principal outcomes: (a) generating revenue, (b) minimizing expenses, (c) mitigating risks, and (d) executing strategic plans. This is done by applying statistical methods to integrated HR, talent management, financial, and operational data,” says Collins in an exclusive discussion with HR Technologist.
HR analytics focuses primarily on the HR function and is not – as is largely believed – exactly interchangeable with people analytics or workforce analytics.
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