HR Analytics is fast becoming a valuable tool for HR Business Partners (HRBPs) to use, even in smaller and mid-sized companies. HR Analytics is defined as the application of employee talent data to improve business outcomes, productivity, and the employee experience.
HR leaders and business partners can use analytics to make talent decisions and improve company processes. To interpret the wealth of information and advise their business clients accordingly, HRBPs have to grow their skill set and prepare for the future of data-driven HR.
HR Analytics - sometimes called people analytics or workforce analytics - involves collecting talent and organisational data and converting it into insights that are used to make decisions for talent management, placement, and processes. The data extracted from HR tools is used to identify problems and trends and then presented to managers and talent leaders, along with recommended solutions.
What HR Analytics actually is
HRBPs are often asked to supply data by core team members but rarely form part of the core decision-making team itself. To have a genuine business impact, HRBPs have to evolve beyond the role of data suppliers and become data interpreters and solution providers.
HR Analytics can be used to measure performance, set benchmarks, make promotion and salary decisions, improve retention and engagement, and measure how employees are developed and upskilled. The practical applications are broad - and so are the skills required to do it well.
Skill 1: Knowledge of the data - and how to apply it
Start by determining which data is readily available in your HRIS system. At the very least, you will need access to employee names, units, start dates, age or date of birth, management and reporting structures, and direct reports.
The key is not just having the data - it is knowing what it means and how to apply it to specific business questions. Data without context is just noise.
Skill 2: Mapping talent data
From there, you will need to map the talent data - including engagement, the impact of loss, performance descriptors, scores, and more. Focus on what is relevant to the business and its goals. Understand their environment, which skills and competencies are valued, and what the business is trying to achieve.
The goal is to build a complete picture of your workforce - not just a list of data points, but a connected view of how people, roles, and outcomes relate to each other.
Skill 3: Identifying metrics that matter
Not all metrics are created equal. The challenge is to identify the metrics that have the most impact on business outcomes - and to stop measuring things just because they are easy to measure.
Focus on metrics that connect people decisions to business results: time to productivity for new hires, retention rates for high performers, succession readiness scores, and the correlation between development investment and performance improvement.
Skill 4: Connecting HR data to business outcomes
HR Analytics is designed to demonstrate how people impact the organisation's bottom line. Here are three examples of how HRBPs can show how talent impacts business outcomes.
Impact of attrition and retention: The cost and inconvenience of acquiring new talent is a concern for most organisations. HR Analytics can predict which employees are likely to stay based on engagement, knowledge gaps, progression enthusiasm, and skills development.
Recruitment decisions: HR analytics can identify skills and competency gaps to know which roles to create and hire for - by investigating gaps in low-performing teams and shared skills and characteristics of high-performing teams.
Revenue generation: Data can be used to measure productivity as well as its impact on profitability - and the effect of knowledge sharing and development on sales and customer retention.
Skill 5: Using sophisticated BI tools
It might be tempting to use desktop data processing tools like Excel or Google Docs to manage your data, but it is far from ideal. Data security is a considerable concern, and it is challenging to input additional data sets - especially when the data is as complex as HR data.
Make sure your team uses the right solution so you can access the correct data at any time. Opt for a solution that provides clear visualisations and interpretations of the data that can be presented easily and interpreted quickly. Microsoft Power BI, Tableau, and similar tools are good examples that are relatively easy to master.
Skill 6: Data visualisation
A picture is worth a thousand words, and your audience will have a much better grasp of the information you are trying to convey if it is presented as graphics. Data visualisation tools take the results of your metrics and present them in powerful, interactive visualisations that bring the data to life.
As an HRBP, it is important to interact and engage with the data you are collecting. The right system will have reporting features and a dashboard to collate the data from your HR programmes and create visualisations used in presentations and reports. Visual tools can demonstrate and justify HR decisions and present plans for retention, talent pipelines, and diversity and inclusion management.
Skill 7: Data storytelling
It is not enough to present leadership with stats. The data has to tell a story. For example, the company is reviewing staff turnover rates. The HRBP shows a slide stating that the overall turnover rate is 10%. The figure is meaningless unless the impact is understood.
To be more effective, HRBPs need to explain: who is impacted and over what timeframe, what was discovered from the data, what needs to be done to resolve the issue, and how success will be measured. Breaking down the turnover by month, department, tenure, and gender may paint a very different picture - and lead to very different decisions.
The strategic shift
HR Analytics is finally affording HR business partners a seat at the boardroom table. The right analytics can demonstrate the genuine, bottom-line contribution that HR makes to the organisation at large. Start developing your skills today by gaining the tools and knowledge to employ HR analytics as an HRBP.