Most organizations already have data that is routinely collected, so why the need for a specialized form of analytics? Can HR not simply look at the data they already have? Unfortunately, raw data on its own cannot actually provide any useful vision. It would be like looking at a large spreadsheet full of numbers and words. Without organization or direction, the data appears worthless. Once organized, compared and analyzed, this raw data provides useful insight.

They can help answer questions like:

  • What forms 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.With the ability to answer important organizational questions without any guesswork, it is not surprising that many businesses using HR analytics are attributing performance improvement to HR initiatives.

HR analytics supports HR professionals to make data-driven decisions to attract, procure manage, and retain employees, which improves Return on Investment. It assists the people those who are in c-suite positions to make decisions to create conducive work environments and maximize employee productivity. It has a greater impact on the bottom-line when used effectively.

HR professionals gather data points across the organization from sources like:

  • Employee surveys
  • Telemetric Data
  • Attendance records
  • Multi-rater reviews
  • Salary and promotion history
  • Employee work history
  • Demographic data
  • Personality/temperament data
  • Recruitment process
  • Employee databases

HR leaders must align HR data and initiatives to the organization’s strategic goals. For example, information Technology Bellwether may need to improve collaboration across departments to increase the number of innovative ideas built into their software. HR initiatives like shared workspaces, company events, collaborative tools, and employee challenges can be implemented to achieve this goal. To decide how successful initiatives are, HR analytics can be used to examine correlations between initiatives and strategic goals.

Once data is gathered, HR analysts feed workforce data into sophisticated data models, algorithms, and tools to gain actionable insights. These tools provide insights in the form of dashboards, visualizations, and reports. An ongoing process should be put in place to ensure continued improvement:

  • Benchmark analysis
  • Data-gathering
  • Data-cleansing
  • Analysis
  • Evaluate goals and KPIs
  • Create action plan based on analysis (continuously test new ideas)
  • Execute on plan
  • Streamline process.


It is a truth across industry one should accept that qualified candidates become more difficult to find and retain; improvements in performance evaluation can prove to be extremely valuable. HR analytics leverages your employee data to determine who your best and worst performers are, based on factors like past work experience, length of employment, and to whom they report. Common characteristics between groups of employees can emerge, which can be used to properly motivate employees and ensure they receive the right rewards.

Career development is an important component to monitor, as well, since employees are much more likely to leave if they’re not satisfied with their career trajectory. Analysis of promotion rates, promotion wait times, and qualitative data from employees will help HR meet employee expectations and keep them motivated. Leadership traits may emerge in some employees, and companies can determine which characteristics correlate with future leaders. HR can then foster this potential, resulting in long-term ROI for the organization.


Many organizations realized that the cost involved in replacing an employee could be over 200% of their annual salary, according to The true cost might even be higher due to training/onboarding, lost productivity, recruitment, and decreased morale among other employees. Losing an employee that’s in the top 1% of performers could mean the difference between growth and decline. For this reason, reduced attrition and improved employee engagement are often top priorities for HR departments. HR analytics can help improve retention through a blend analysis that looks at data points.


Almost 40% of World’s employers say they cannot find people with required skill sets for entry-level jobs and almost 60% say entry-level candidates are not prepared professionally. Talent Analytics also plays an important role evaluation of employee development) programs minimize the skills gap. Analytics tools will be of immense help in assessing company needs, allocating resources to train employees most likely to fill those needs, and then evaluate the results. The objective is to close the skills gap so an organization can compete with increasingly supple global competitors.


Organizations should not ensure only they have employees with the right skills presently, but they also need to be able to antedate future departures or changes in the organization’s needs, particularly for business growth. HR requires a data-driven approach to positively direct the ever-changing configuration of organizational talent. This confirms that people and capacity planning are optimized.


A motivated workforce is crucial in attracting and engaging talent. The defy is that deciding upon which factors would result in profit maximization for the organization. This makes employee engagement a very difficult metric to quantify and take action on. How can HR analytics help with employee engagement? Statistical analysis of employee engagement survey data, Discriminant analysis to identify the needs of different segments within the organization Factor analysis to correlate engagement initiatives with retention and productivity, Inform testing of new ideas to measure lift in engagement.

Google is a perfect case study in how people analytics can be used to increase employee engagement. They’re one of the most data-driven cultures in the world. Its People Operations team utilizes a mix of quantitative and qualitative data to measure what employees value most and to keep them engaged. They discovered, through a combination of employee surveys and productivity analytics that great managers tend to have the following qualities:

  1. Coaching skills
  2. Does not micromanage
  3. Is genuinely concerned for well-being of employees and expresses this
  4. Results-oriented
  5. Excellent communicator (listens and shares)
  6. Develops employees
  7. Clear vision and strategy for team
  8. Possesses key technical skills to help guide team


Compensation is often the largest business expense, which underlines its importance in organization decision-making. Data analytics platforms can help analyze large volumes of employee and market data to achieve a competitive advantage. Smart HR analysts will keep track of what competitors offer employees to ensure top talent is attracted to the company. They can also look at exit surveys during the recruiting process and declined offers to better understand the compensation and incentive landscape. HR analytics can provide:

Incentive programs to motivate employees to maximize productivity. Data analysis can provide insight into the most impactful monetary and non-monetary rewards. For example, an HR department might implement a referral program where employees receive a bonus for referring new hires. With enough data, HR can determine what the ideal bonus amount is and cross-reference this to the increase or decrease in quality of hires.

Sales team motivation is another application. What quota should be assigned to each salesperson and what should their bonus structure look like? This may vary on the team, region, and products sold.

Executive compensation analysis needed to attract and retain top leaders. HR analytics can analyze the market rates for executives at similar companies, bonuses that properly motivate, and perk to provide. This is critical to the direction of the organization and can either make or break it.

(The  Author is Assistant Professor, Department of MBA, Siddaganga Institute of Technology, Tumakuru)

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