Article (August-2020)


Analytics - priority area of focus for HR

Dr. Anupriyo Mallick

Designation : -   Associate Professor and Head HR and OB

Organization : -  Eastern Institute for Integrated Learning In Management (EIILM), Kolkata


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In highly competitive businesses, where attracting and retaining the right talent is the key to innovation and continuous growth, it is important for HR functions to recognise the urgency to embrace the analytics led approach.

In the current context of employee experience being the key driver for HR managers for employee retention, the critical prerequisite would be the ability to define the scope and metrics for the employee lifecycle with organisation. This also means it is time we moved away from measuring employee satisfaction through surveys alone to blending the surveys with data points and insights offered through people analytics for planning and devising the correct approach. And such insights would be meaningful and will lead to appropriate analysis and proactive measures to avert likely dips in employee experience only when they are continuous. The employee experience journey has to commence even before the employee joins the organisation with innovative communication through the company website as well as social media channels.

Listening to the universe on the social media and carrying out useful analytics on how the potential target segment as well as their influencers perceive the company as well as the roles offered has to be the starting point with the view to enlarging the base of audience universe and their positive inclinations towards the organisation. Eliciting insights from the experience of candidates during the interview and the selection process and building models to decipher the joining ratio and creating alerts for critical positions would enable the HR managers to fine tune their further candidate engagement processes. Insights from these milestones would be extremely useful for developing the retention model for various categories of employees. Thereafter, the talent development programs, the coaching process, individual skill development tracks, performance definition and assessment process, customer satisfaction index, social interactions and a whole host of other touch points offer a huge potential for insights all of which contribute further in shaping the retention and attrition models. While most HR managers recognise these touch points in the employee lifecycle and often use fuzzy logic to help in retention of critical talent, the use of data analytics to drive the employee experience and the resultant positive impact on retention is yet to become mainstream with HR functioning.

Not long ago, marketing and finance industry experts were debating whether or not collection and analysis of big chunks of historic data will be of any use for future decisions. Currently, big data analytics has made its impact felt not just in the above two but in almost all data-oriented industries. However, human resource management has by nature been more people-oriented. Thus, it has not seen data analytics being used as much as the other industries. Even those companies which are sitting on large heaps of data are not utilising it to the best possible extent. So, does data analytics fit in HR management?

HR analytics is defined as an approach to utilise human resource data maintained by the organisation to measure the direct or indirect impact of HR campaigns on important business outcomes. Even without using HR analytics, businesses spend a significant amount of money on HR functions. But in absence of solutions which can measure the effectiveness of HR decisions, HR leaders would always be shooting in the dark. HR analytics helps in predictive analysis to make and execute the decisions in a rational way.

An example of such implementation is LinkedIn's purchase of for $120 million in 2014. The latter has analytics software which assesses resumes to find match with job openings. According to Infor, an HR software vendor firm, as many as 14 million people take these predictive assessments every year when they apply for jobs.

Based on various logics and algorithms, these tools assign scores to candidate basis how they turn out in comparison to an ideal profile for the job. For employee retention and growth mapping, complicated correlations between standalone metrics like pay comparison, turnover, resignation, job satisfaction, etc, can be studied using clustering algorithms to identify finer HR trends within the organisation and take a corrective/progressive measure.

Organisations have been using a separate lens to measure the impact of HR decisions on the bottom line of the business as compared to other functions. This approach was used in the absence of definite measures to identify and assess the correlation between these two variables. HR analytics bridges this gap and sets more accountability and transparency for HR leaders, just like other functional leaders. Xerox used an HR analytics tool named Evolve to profile potential candidates for job stability. The tool helped the company to hire those who are better cultural fit for the organisation. As a result, Xerox reduced call centre turnover by 20% during 2012-14.

Now, how to successfully activate HR analytics?

As many as 61% of Indian HR leaders surveyed for the 2015 Randstad Talent Trends Report, HR Game Changers, agreed that they use talent and workforce analytics as part of their talent strategy and workforce planning process.

This indicates that the industry understands and accepts the significance of these solutions. Despite this, the effort by most organisations remains limited to capturing the data without significantly leveraging it. To reiterate, the broad objective of the HR function is to align human resources with the overall business objectives of the organisation. Hence, HR analytics should not be seen merely as IT implementation to optimise HR decision-making. It should rather be treated as an add-on to the experience and skills of HR leaders. Effort should be to seamlessly integrate these IT solutions with HR leadership and the business objectives of the organisation. In other words, successful future HR executives will understand and pro-actively utilise employee data to improve workforce planning, talent analytics and optimise employee cost for the organisation. They can help managers to start recruitment planning six months in advance, keeping the future business goals in mind. Similarly, HR analytics can enable programmes to identify, train and retain talent with high potential. The need is to identify the areas where HR analytics can add value and then implement specific tools to do so. However, these technologies are still in infancy and some time away before these become a reliable and affordable partner of HR managers.

In highly competitive businesses, where attracting and retaining the right talent is the key to innovation and continuous growth, it is important for HR functions to recognise the urgency to embrace the analytics led approach. For data led approach to gain momentum, the first step is to integrate the existing systems in the organisation such as HR MIS, Learning Management Systems, Performance Management Systems on a digital platform and be able to pick the data sets that would enable the HR function to build a suitable model and train AI tools to support in decision making related to employee experience milestones.

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