Decision-making without data is a thing of the past.
Is your business’s data analysis and collection strategy all over the place? Is there even a formal strategy in place? If you’re an HR professional who is operating within an organization where data is inefficiently gathered or underused, this guide is for you.
Collecting and analyzing employee data is a cornerstone of strategic HR, but it’s also a necessary practice to navigate the challenges of recruiting and retaining top talent in today’s working environment.
In Capterra’s Company Culture Survey* from early 2022, nearly a third (31%) of respondents revealed that turnover within their department is higher than it was before the COVID-19 pandemic. And considering that approximately four million Americans have left their jobs every month since August 2021, that’s not too surprising.
So, how can data analysis help? By identifying employees who are at risk of leaving your organization, revealing the sources of voluntary turnover in your workplace, and uncovering how you can improve your candidate experience in order to improve your offer acceptance rate. And that’s just the tip of the iceberg when it comes to what’s possible through data analysis in HR.
Ahead, we’ll explain what data analysis in HR is and provide you with five applications of this practice, along with suggestions for software that can help you get started.
Data analytics is the process of examining raw data with the goal of identifying trends and drawing conclusions. In the human resources field, data analytics is often deployed to help HR professionals make more informed decisions about the future of their workforce. There are a few notable subtypes of HR analytics, and we’ll give a brief overview of how those are differentiated from one another below:
- People analytics: People analytics, also called talent analytics, involves collecting information about your organization’s talent with the goal of improving the employee experience. The type of information that would be collected for people analytics includes data concerning employee performance and productivity, work-life balance and well-being, and employee satisfaction and engagement.
- Workforce analytics: Workforce analytics is a tactic that’s closely tied to strategic HR planning. There are several goals of workforce analysis including managing staffing levels so that they are aligned with business needs and priorities, optimizing your organization’s structure, and preparing for the future of your workforce through informed succession planning. According to Capterra’s glossary, workforce analytics entails collecting information related to recruitment, staffing, training and development, personnel, and compensation and benefits.
- Predictive HR analytics: More future oriented than the two analytics tactics above, predictive analytics is an advanced strategy that uses techniques such as regression analysis, multivariate statistics, pattern matching, predictive modeling, and forecasting. Adoption rate of predictive analytics in HR is still low, but it can be useful for things such as predicting when employees are at risk of leaving the company.
HR data analytics can be used to make improvements in nearly every area of human capital management. Ahead, we’ve included examples of five applications for HR data analytics to illustrate how this practice can be used to finetune different HR processes.
If you haven’t heard, it’s a tough time for recruiters. We’re in the midst of an ongoing talent shortage, which means that sourcing and recruiting quality talent is more competitive than ever. Data analytics can help by revealing where your recruiting process can be improved.
For example, you can set hiring goals and see how you’re progressing toward them, compare your time-to-fill and cost-per-hire metrics with other industry standards or organizations through benchmarking, and track how your results ebb and flow after making adjustments to different aspects of your recruiting strategy.Track the recruiting data that’s a priority for your organization. Many
Training and development
Are your training and development programs effective? That’s an important question for HR professionals to answer, but without a method for measuring results, there’s no way of knowing if your teams’ resources and efforts were wasted on a training initiative.
An effective approach to gauging the impact of training and development programs involves asking employees for feedback through a survey or manager one-on-ones, as well as collecting and analyzing data related to the completion and comprehension of programs.
In some cases, predictive analytics can also be used to create personalized learning paths for employees and even tailor training content to meet different learning styles.Measure your employees’ engagement with and comprehension of training programs.
Attrition and retention
In Capterra’s Recruiting Strategy Survey** from July 2021, 51% of employees with recruiting responsibilities revealed that the number of job openings that they’re actively recruiting for is higher than average. The talent shortage is partially to blame, but ongoing, record-high levels of turnover is another major factor contributing to the surplus of open positions.
Knowing that, uncovering sources of turnover is a priority for HR leaders. And predictably, data is one of the best ways to do that. For example, you can collect information from departing employees through exit interviews and surveys, then use analytics software to identify commonalities between the results.In order to get turnover in check, you need to understand what’s contributing to it.
Benefits and compensation
One of the biggest expenses for any business is employee compensation. This, coupled with the fact that we’re currently in an inflationary environment, has made compensation analytics a more essential practice than ever for HR managers.
For instance, our Recruiting Strategy Survey* revealed that only 13% of employers are not considering increasing compensation as a means of attracting job seekers to their organization. So, if you’re having a hard time recruiting quality talent and you’re a part of that minority, it’s time to take a more intentional approach to compensation planning. You can do this by comparing your organization’s salary ranges to those from similar businesses, reviewing adoption rates of different benefits to determine where changes should be made, and assessing pay equity gaps.Ask your
From the perspective of the HR department, productivity refers to how efficiently resources such as talent, money, and time are being used. Data analytics is particularly helpful when it comes to measuring productivity, but the kind of productivity data you should analyze depends on your goal.
For instance, some metrics (such as revenue per full-time employee) are helpful for judging the productivity of your workforce as a whole, while others (such as project completion rate) are more useful for measuring the performance of a team or individual. Further, you can measure how efficiently resources are being allocated by tracking the adoption rates of different tools or benefits.Encourage department leaders to report on their team’s productivity. Most businesses today use a
According to our Recruiting Strategy Survey**, over a quarter (27%) of the HR professionals we polled already have recruiting analytics software and an additional 52% are either considering or planning to purchase it in the future.
If you’re a part of the minority who is not considering investing in a tool that makes data analysis easy, we have to ask: Why not?
When data informs every decision your HR department makes, from recruiting and retention to training and productivity, the outcome will be a much more effective human resources business function.
And while kicking off a data analysis strategy may seem like a daunting practice to put in place, it doesn’t have to be. Start with the three suggestions we included earlier on in this guide:
* Capterra’s 2022 Company Culture Survey was conducted in December 2021 among 958 employees at U.S. companies with at least six employees: 332 who work fully on-site (e.g., in an office, store, or other central location), 300 who work fully remote, and 326 who split their time between working on-site and remote (i.e., a hybrid model). The goal of this survey was to learn how hybrid and remote work formats impact different aspects of company culture.
** The Capterra Recruiting Strategy Survey was conducted in July 2021. We collected 300 responses from workers with recruiting responsibilities at U.S. employers. The goal of this survey was to learn how much companies are struggling with recruiting and hiring, and what solutions they’ve considered to improve recruiting and hiring outcomes.
Note: The applications mentioned in this article are examples to show a feature in context and are not intended as endorsements or recommendations. They have been obtained from sources believed to be reliable at the time of publication.