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What is HR Analytics?

Last Updated June 18, 2021

A modern workspace with vibrant blue walls and a group of co-workers sitting at a table looking up at a man standing up giving them instructions.

As data-driven approaches are being implemented in almost every function of business today, human resources is also feeling the impact.

HR analytics takes datasets and attempts to find insight into how people behave – which is why it’s also known as “people analytics.”

Villanova University offers a People Analytics and Research graduate certificate to meet the demand in this area of human resources. Those who earn the certificate will develop expertise in the quantitative and qualitative research methods that can deepen the understanding of both the antecedents and consequences of workplace behavior.

Students will also learn the techniques and tools needed to successfully implement HR analytics and leverage its findings to drive better business decisions.

Demand in HR Analytics

According to the Society for Human Resource Management (SHRM), the need for professionals with skills in HR analytics is one of the fastest growing job fields in human resources.

The SHRM report cited a 2015 study from Deloitte that found 35% of organizations were working on implementing analytics into HR, but only 9% had done so. That offers a telling picture of how demand in this area is outstripping supply.

A 2018 report from Deloitte also found that HR analytics is growing so fast that companies need to move toward creating transparent policies around the use of data or risk backlash from employees.

Despite that 9% number, analytics already plays a role in HR at some companies. Google, for example, used analytics to determine that soft skills such as communication and collaboration ranked more important for managers than technological skills. This insight led Google to change what they looked for when recruiting new managers, according to SHRM.

HR analytics are also being adopted at a rapid rate in the retail industry, according to HR Technologist. The goal is to is “ensure optimum allocation and utilization of human resources while reducing operational costs.”

People Analytics

Studying human behavior through analytics is a goal of many organizations, particularly in understanding consumer choices (i.e., why did you buy this car instead of that car?). In HR, however, the questions go deeper into the areas of recruiting, retaining and motivating valuable employees to deliver high performance.

For example, HR analytics could help answer questions such as:

  • How might we change the wording of our job posting to contain language that is more likely to recruit the type of candidate we are looking for in our organization?
  • In what way should we modify our training programs to deliver better business results?
  • Does our performance rating system accurately reflect employee performance?
  • Are there any patterns that can indicate when a valued employee is considering leaving?

As with all efforts in data, the idea is to glean information from large datasets and, in turn, use that information to develop actionable strategy. Much like how retailers can anticipate some consumer behavior, HR analytics can drive insight into how to better manage a workforce.

Benefits of HR Analytics

HR analytics can serve employers in “optimizing” a workforce, but there are benefits for the employees as well.

As the Google example shows, analytics can provide insight that can benefit performance. By shifting their recruiting strategy to include those with better management skills and not focusing completely on technological skills for management roles, Google was able to improve the overall organizational culture and create a better job fit for individual employees. That’s a good thing for the organization and the employees.

Also, by using data to identify talented employees and deliver the right resources to help them in their jobs, employees are more likely to deliver high performance leading to higher levels of job satisfaction, giving them more reasons to stay with a company.

HR analytics also could lead to better training and development programs that also lead to employee retention.

These are some of the reasons why HR has moved past intuition and strategic planning and more into a data-driven model that can better serve the employee and the employer.

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