HR Analytics & the Advent of Data-Driven HR

You have probably heard about the idea of data-driven HR, and how HR analytics is the biggest innovation in human resources since the invention of the spreadsheet. But what is HR analytics, exactly, and how is it useful? The answer begins with data.

Even if you’re still using paper files or a simple spreadsheet to accomplish HR tasks, you’re already collecting and storing HR data. Sometimes called “people data”—although that should technically only apply to information about employees—HR data includes any information HR collects about their organization and workforce. And since most HR teams are using dedicated HR software of some sort at this point, that means they are collecting lots of data on a daily basis in all sorts of areas. The digitization of business functions means that every piece of information entered or created gets stored, somewhere, until it’s deleted by design or by its owner.

But collecting data is one thing; making it useful is another thing entirely. Data is only useful if you’re able to study it and find out what it means to your team and your organization. That’s where HR analytics—which is just another way of saying “studying HR data”—and HR reporting come into play. HR analytics allows you to take the data you’re collecting and organize it, compare it to other data, and reveal discrepancies between what you expect or want to happen and what actually happened. Reporting is the end result of HR analytics: reports let you take that data analysis and display it in a way that’s easy for you and others to understand.

In this chapter, we’ll go over what kind of data HR can collect, and how HR analytics and reporting allow human resources teams to use that data in ways that can have a big impact, not only on their practice, but on the entire business. Want to jump to a specific topic?

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HR Data Management: Metrics, Analytics, and KPIs

If you’re using an HRIS to help you collect, store, and organize employee data, and that HRIS has the ability to automate or semi-automate HR tasks like time-off requests, time tracking, job postings, hiring, onboarding, and offboarding, chances are good that it’s gathering and storing data. You can sort and filter that data into individual metrics, classify certain metrics as key performance indicators (KPIs), and study them to reveal insights that will help you make strategic decisions.

What Are HR Metrics?

A metric is simply a specific data set, and HR metrics are data sets specific to HR, like the total number of days employees take off in December, for example. Metrics are what you use as the ingredients for your HR analytics; if you had ten years’ worth of data stored in your HRIS, you could pull a report that showed how many days employees took off in December for the last ten years, and see how that number rose, fell, or stayed the same. That’s the most basic HR analysis and report: a single metric, tracked over time.