In the past a lot of decisions relating to human centric functions were usually made out of intuition or ideas or feelings. There was not much of data or science which went into people related decisions inside the organizations. But today the emergence of HR analytics is helping organizations answer questions like who are the most engaged employees and what are their skill levels, are the high task performers at the risk of leaving, what kind of teams perform better and many more. Organizations like Google, P&G and Sysco are using analytics to improve their methods of attracting and retaining talent, connecting their employee data to business performance, differentiating themselves from competitors, and more.
This paper studies how the organizations are using HR analytics to make people related decisions in the organizations. Understanding people through data can be incredibly powerful. Numbers can reveal a lot about people. Today, analytics is allowing the corporate world to get important insight about the workforce which enable them to take proactive measures aimed at retaining the talent. HR professionals are now interpreting the analytics about the work force to provide strategic counselling to the organization. With the help of HR analytics HR managers are able to add in data and science alongside intuitions to help companies function as successfully as possible.
HR Analytics, also referred to as people analytics or talent analytics, refers to the application of analytics in the field of Human Resource in order to make decisions relating to the employees or the workforce in the organization. HR Analytics integrates statistics and technology to the data relating to the workforce in order to draw insights about the same.
HR analytics uses the data to support decisions relating to the HR systems, practices, and policies. In a world where top management often looks to the numbers before making decisions, HR analytics represents a growing trend amongst the management field (Pfau & Cohen, 2003; Rasmussen & Ulrich, 2014), as the practice offers a useful framework and set of tools for measuring and evaluating the efficacy of HR systems, programs, and interventions.
HR Analytics is a part of the broader field of Analytics which involves scanning, analysing and extracting of insights about the people, talent or the workforce in order to make strategic decisions. HR Analytics helps the managers and the senior leaders make more informed and better decisions. It has given rise to a culture of decision making which is data driven.
REVIEW OF LITERATURE
HR analytics is defined as the systematic identification and quantification of the people drivers of business outcomes (Van Den Heuvel & Bandarouk, 2016). HR analytics refers to the direct impact of people data on important outcomes of the business. HR Analytics is a HRM practice that is designed to provide managers with information that connects HRM processes to employee attitudes and behaviours and ultimately to organizational outcomes. Researchers have observed that the use of analytics in order to understand how HR practices and policies impact organizational performance is a powerful way for HR functions to add value to their organization (Lawler III, Levenson, & Boudreau).
In the article titled ‘HR Metrics and Analytics: Use and Impact’ appearing in Human Resource Planning, published by the Human Resource Planning Society, the authors distinguish ‘HR Analytics’ from ‘HR metrics’. HR metrics gives us the mere numbers whereas HR Analytics tells us the qualitative information about the data (Lawler III, Levenson, & Boudreau).A study by Lawler III and Boudreau showed that use of metrics and analytics by HR increased the scope of HR being seen as a strategic partner in the organisation.
Also organisations today have the ability to access and process a variety of data compared to a decade ago thanks to the developments made in information and communication technology (Banerjee, Bandopadhyay, & Acharya, 2013). However, despite these advances in technology over the years, HR has not been very adaptive to analytics (Carlson & Kavanagh, 2012). An organisation should have a strong analytic culture which is built through an emphasis on decisions at every level to be based on data (Levenson, 2005).
(Rajbhar, Khan, & Puskar, 2017) stated in their study that troubles faced by HR relating to succession planning, recruitment, manpower planning, forecasting of turnover etc. can be solved efficiently with HR analytics. HR analytics enables the HR fraternity to become a strategic associate for the organization.
HR ANALYTICS AND HUMAN RESOURCE MANAGEMENT
Human Resource has evolved from being Operational HR during 1990s, Strategic HR during the 2000s and currently to Data Driven. HR Analytics has radically changed the way HR functions. HR Analytics helps to understand what is happening within the organization. HR Analytics has the power to extract valuable insights from the huge chunk of data lying unexplored and redundant for years. It tracks whether the implemented processes and systems yield any solution or not. It plays a vital role in workforce management. HR Analytics is also referred to as People Analytics. HR Analytics harnesses the information related to employees, talent and workforce in the organization to make people related decisions. Data from various sources such as employee feedback forms, employee engagement survey feedback, HRIS data, training data, exit interview data, performance management system data can be studies to understand various trends. HR Analytics tells us about the past and present information about the workforce and helps forecast the future trends. HR Analytics has a major impact on the strategic decision making of an organization. HR Analytics has revamped how Human Resource Management of an impacts the business decision.
HR METRICS TO HR ANALYTICS
HR metrics focuses on collecting or gathering of workforce related data. HR Analytics, on the other hand, is about using data to bring forth various insights and predictions. For instance, metrics is about what is the what is the headcount in our organization, how many people di we hire this year, how many people resigned the organization and so on. Analytics goes deeper and understand what are the characteristics of the top performers in the organization, where do we hire our best performers from and which one of the top performers could leave the organization. Metrics reports on the current, past and over a period for areas such as employee engagement, employee retention and performance. For example, the average engagement level of the employees in an organization is 78 percent or the performance level score is 83 percent. Metrics only tracks the activities but it does not show the causal relationship. HR Analytics digs deeper and studies the patterns and the trends to fine possible causes and effects and the relationships. Analytics can tell us do the top performers of our organization leave the organization at a higher rate than the low performers and if this is the case then what is it that is driving such turnover. Therefore, HR analytics shows how does the performance of the organization gets impacted by the HR metrics.