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Friday, October 22, 2021

HR analytics – How is it changing the world of human resources?

HR analytics is also known as talent analytics. It is the process of applying the nuances of data mining and techniques of business analytics to human resource data. Unlike the yesteryears, when decision-making related to human resources was based on intuition and instinct, with the advent of HR analytics, HR professionals can use algorithms and data so that they can find better business solutions. 

Are HR analytics and people analytics the same? Sometimes, both the terms are used interchangeably but there is a difference between the two metrics. 

While HR analytics deals with functions related to a human resource like hiring, training, the expense incurred on one employee, till the time of production, people analytics are used as a synonym used but is applied to “people” generally. 

In people analytics, it can be applied to any group of people or individuals that are not associated with the organization as well. 

HR role in business – How to do HR analytics drive business value

Data-driven methods help human resource professionals in hiring and managing talent across various organizations of all sizes. Metrics in this regard also help in recruitment, retention, and in deciding the compensation of the employees. 

As such, the human resource department has valuable data of employees that can be made use of for bringing about positive changes in the organization. 

The data that is available on the mindset of consumers can be used for the development of strategies so that sales are maximized. This is usually done by capitalizing on those very factors. 

Similarly, the data that is available related to the HR functions about the improvement of the employees can be used for the betterment of the employees, thereby maximizing the business output. 

HR analytics can be applied in measuring the investments in reskilling employees that will help in delivering the right competencies so that new revenue models could be supported. This can be done by making use of data-driven insights. 


HR analytics – What are the different metrics that it measures?

HR metrics have a role to play in contributing to business value. However, the main question is what does the business need now? 

Once the need of the organization or the business is identified, the KPIs or the key performance indicators of the organization can be proposed by the HR team and the metrics that determine or impact the KPIs. 

Given below are the few metrics that HR analytics can track. 

  • Revenue per employee

This is obtained by dividing the revenue of a company by the total number of employees in the organization. This will allow you to know the average revenue that each employee generates. It is also a benchmark to find out how well a company can generate revenue through its employees or workforce. 

  • Offer acceptance rate

This metric indicates the efficiency of a company’s talent acquisition strategy. It is calculated as the number of formal jobs accepted by the total number of job offers that were given to employees during a certain period. 

  • Expense on training per employee

The value of the expense incurred on imparting training to employees can be determined by training efficacy. 

Aside from the above metrics, the other metrics that HR analytics can find out include the following-

  • Involuntary turnover rate
  • Voluntary turnover rate
  • Training efficiency
  • Time to hire
  • Time to fill
  • Human capital risk
  • Absenteeism

HR analytics require data that is classified as internal and external data. However, the biggest challenge that the collection of data poses is whether the data collected is right and of good quality. These will determine how successful the HR analytics tool is.


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Josie Patra
Josie Patra is a veteran writer with 21 years of experience. She comes with multiple degrees in literature, computer applications, multimedia design, and management. She delves into a plethora of niches and offers expert guidance on finances, stock market, budgeting, marketing strategies, and such other domains. Josie has also authored books on management, productivity, and digital marketing strategies.

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