HUMAN RESOURCE

ANALYTICS

BBA 306
CONCEPT OF HR ANALYTICS
HR analytics is the process of collecting and analyzing Human Resource (HR) data in order
to improve an organization’s workforce performance. The process can also be referred to as
talent analytics, people analytics, or even workforce analytics.

This method of data analysis takes data that is routinely collected by HR and correlates it to
HR and organizational objectives.

Doing so provides measured evidence of how HR initiatives are contributing to the

organization’s goals and strategies.

For example,
if a software engineering firm has high employee turnover, the company is not operating at a
fully productive level.
• It takes time and investment to bring employees up to a fully productive level.
• HR analytics provides data-backed insight on what is working well and what is not so that
organizations can make improvements and plan more effectively for the future.
QUESTIONS ANSWERED BY HR ANALYTICS

HR ANALYTICS can help answer questions like:

• What patterns can be revealed in employee turnover?
• How long does it take to hire employees?
• What amount of investment is needed to get employees up to a fully
productive speed?
• Which of our employees are most likely to leave within the year?
• Are learning and development initiatives having an impact on
employee performance?
Having data-backed evidence means that organizations can focus on
making the necessary improvements and plan for future initiatives.
How can HR Analytics be used by organizations?
(APPLICATIONS)
1. Turnover- When employees quit, there is often no real understanding of
why.
HR Analytics can:
• Collect and analyze past data on turnover to identify trends and patterns
indicating why employees quit.
• Collect data on employee behavior, such as productivity and engagement,
to better understand the status of current employees.
• Correlate both types of data to understand the factors that lead to turnover.
• Help create a predictive model to better track and flag employees who
may fall into the identified pattern associated with employees that have
quit.
 2. Recruitment

Organizations are seeking candidates that not only have the right skills,
but also the right attributes that match with the organization’s
work culture and performance needs.
HR Analytics can:
• Enable fast, automated collection of candidate data from multiple
sources.
• Gain deep insight into candidates by considering extensive variables,
like developmental opportunities and cultural fit.
• Identify candidates with attributes that are comparable to the top-
performing employees in the organization.
 3. Talent management
The success of any business to an extent depends on the level of expertise
of the employees and their skills.
Capability analytics refers to the talent management process that helps
you identify the core competencies of your workforce.
Once you know what those capabilities are, you can set them as a
benchmark and compare them to the capabilities of your workforce and
measure any gaps.
4. Organizational Culture:
Organizational culture analytics is a process of assessing and
understanding better the culture at your workplace.
When you know what is the culture of your organization, you can then
evaluate and keep a track of the changes you might observe.
Tracking culture changes helps to understand the early signs if the
culture is getting toxic.
5. Leadership:
Poor leadership costs money, time and employee churn.
Employee retention for such an organization becomes extremely
difficult and prevents a business to perform at its full potential.
Leadership analytics analyzes various aspects of leadership performance
at a workplace.
Data can be collected through qualitative research and quantitative
research by using a mix of both methods like surveys, polls, focus
groups ETC.
Process of HR Analytics

1. Collecting data
• Collecting and tracking high-quality data is the first vital component of HR analytics.
• The data can come from HR systems already in place, learning & development systems, or from new
data-collecting methods like cloud-based systems, mobile devices .

TYPE OF DATA COLLECTED-

• employee profiles
• performance
• data on high-performers
• data on low-performers
• salary and promotion history
• demographic data
• on-boarding
• training
• engagement
• retention
• turnover
• absenteeism
2. Measurement

• At the measurement stage, the data begins a process of continuous measurement

and comparison, also known as HR metrics.
In HR analytics, key metrics that are monitored are:
• Organizational performance
Data is collected and compared to better understand turnover, absenteeism, and
recruitment outcomes.
• Operations
Data is monitored to determine the effectiveness and efficiency of HR day-to-day
procedures and initiatives.
• Process optimization
This area combines data from both organizational performance and operations
metrics in order to identify where improvements in process can be made.
3. Analysis
The analytical stage reviews the results from metric reporting to identify trends
and patterns that may have an organizational impact.
There are different analytical methods used, depending on the outcome
desired.
These include: descriptive analytics, prescriptive analytics, and predictive
analytics.
• Descriptive Analytics is focused solely on understanding historical data and
what can be improved.
• Predictive Analytics uses statistical models to analyze historical data in order
to forecast future risks or opportunities.
• Prescriptive Analytics takes Predictive Analytics a step further and predicts
consequences for forecasted outcomes.
4. Application
Once metrics are analyzed, the findings are used as actionable insight for
organizational decision-making.
Examples of how to apply HR analytics insights:
• Time to hire – If findings determine that the time to hire is taking too long and the
job application itself is discovered to be the barrier, organizations can make an
informed decision about how to improve the effectiveness and accessibility of the
job application procedure.
• Turnover – Understanding why employees leave the organization means that
decisions can be made to prevent or reduce turnover from happening in the first
place. If lack of training support was identified as a contributing factor, then
initiatives to improve on-going training can be put together.
• Absenteeism – Understanding the reasons for employee long-term absence
enables organizations to develop strategies to improve the factors in the work
environment impacting employee engagement.
Predictive HR Analytics

Predictive Analytics analyzes historical data in order to forecast the

future. The differentiator is the way data is used.
• In standard HR analytics, data is collected and analyzed to report on
what is working and what needs improvement. In predictive analytics,
data is also collected but is used to make future predictions about
employees or HR initiatives.
• This can include anything from predicting which candidates would be
more successful in the organization, to who is at risk of quitting within
a year.
Predictive HR Examples
• Turnover
With predictive analytics, an algorithm can be devised to predict the
likelihood of employees quitting within a given timeframe. Being able
to flag which employees are at risk enables organizations to step in with
preventative measures and avoid the cost of losing productivity and the
cost of re-hiring.
• Organizational Performance
Historical data can pinpoint reasons for poor performance, but
predictive analytics can make predictions about what initiatives are
most likely to improve performance. If engagement levels are identified
as being correlated with performance, then organizations can
implement specific initiatives that boost employee engagement.
 Key HR Analytics Metrics [With
Examples]
1. Revenue per Employee=Revenue per employee measures how much money the
business is bringing in for every employee it has on staff and is paying expenses, such
as salary and benefits, for.
2. Time To Fill=The time to fill metric measures how long it takes to fill an open
position at the company.
3. Voluntary and Involuntary Turnover Rates=These rates measure the percentage of
employees who end up leaving the company. The voluntary rate calculates the
percentage of employees who decided to leave the company while the involuntary rate
calculates the percentage of employees who end up getting fired.
4. Offer Acceptance Rate=The offer acceptance rate is another hiring metric that
measures how well the hiring team is at convincing the people they want to take the
job.
5. Retention Rate
6. Absence Rate=The absence rate is the total number of days an employee is absent
from work, not including approved time off such as vacation, over a specific period of
time.
LAMP FRAMEWORK OF HR ANAYTICS
The LAMP Framework
• The LAMP Framework emphasizes continual development through
obtaining input, examining the outcomes, and revising the procedure
as necessary.
• The LAMP Framework is a vital instrument that can improve
organizational performance by developing a more profound
knowledge of employee performance and making data-driven choices.
• The LAMP Framework offers an organized, evidence-based method to
comprehend and enhance employee performance
COMPONENTS OF LAMP-
• Logic — Make the right connections between talent and strategic success
and find the predictors of individual and organizational behavior.
• Analytics — Use the right tools and methods to transform data into
practical insights that reveal causation, not just association
• Measures — Get the right data (accurate and system-generated) for
analytics input to ensure your numbers, and resulting decisions have a
solid foundation
• Process — Take the right communication approach in timing, channels,
and tactics to share data with decision-makers and make an impact
HCM 21 FRAMEWORK-
The Human Capital Management (HCM) 21 Framework is a comprehensive framework that outlines the key components of effective
talent management practices.
It consists of 21 components grouped into three categories-P.P.T, namely-
The People

• People refers to the individuals in your organization responsible for

putting in individual work or completing a project. This includes the
employees that execute tasks, managers and leaders who set goals and
make decisions, or stakeholders who bring companies toward their
goals.
• Identify the skills, knowledge, experience, and capabilities you
need:
• Provide adequate training and support
 The Process
• The process in the PPT framework describes the “how” part of achieving
a particular result. How will we achieve the desired result? How do we
utilize people and technology to solve business problems? Processes are
repeatable actions that produce the same results regardless of who
performs them.
Examples –
• Workforce planning
• Career planning
• Succession planning
• Employee engagement
• Compensatuion and benefits
The Technology
Technology provides the tools that people need to implement the process.
It also helps automate certain parts of the process.
It provides organizations with the tools to implement and automate processes efficiently
Technology must align with an organization’s overall strategy, and it must fit into the organization’s
culture and processes.

COMPONENTS OF TECHNOLOGY-
 HR Technology strategy
 HR Self Service
 HR shared services
 Mobile HR
 Social media and collaborations
 HR Metrics
 HR Compliance
CRITICAL STAGES OF TALENT MANAGEMENT CYCLE

The term “talent lifecycle,” also referred to as “talent management lifecycle,”

encompasses the entire process of recruiting and retaining the right individuals,
nurturing their growth within the organization, and enabling them to reach their
full potential. In simpler terms, it represents their journey throughout the
company.

• CRITICAL STAGES-
Attraction
Selection
Onboarding
Performance management
Retention
HOW HR ANALYTICS IMPROVE ONBOARDING PROCESSES?
Given the need to compete for talent, your organization can use HR data
analytics to discover the best methods for sourcing, evaluating, and
selecting hires.
For example, Organisations can use applicant tracking data to understand:

1. Which sources yield the best candidates.

2. How long it takes to hire a candidate.
3. What each hire costs to attract, select, and onboard.