hr analytics

EVOLUTION OF HR ANALYTICS

The evolution of HR analytics has come a long way since it was introduced and
organizations today have the ability to track all kinds of metrics to ensure that
their people analytics, talent analytics, and workforce analytics are accurate. HR
analytics, the application of statistics, modeling, and analysis of employee-
related factors to improve business outcomes, empowers HR professionals to
make data-driven decisions to attract, manage, and retain a successful
workforce. The benefits of HR analytics are many including, improved ROI,
improved retention rates, and improved business processes. Here’s everything
you need to know about the evolution of HR analytics.

Do you know the benefits of HR analytics today?

HR analytics, thanks to the advances in technology, have come a long way since
they were first introduced. From being able to only evaluate goals and KPIs to
data-gathering, thanks to the evolution of HR analytics, HR professionals can
do so much more with their data-driven metrics. Let’s take a look at a few of
the new HR analytics available to HR professionals.

Employees Leaving the Company, A.K.A Employee Churn Analytics

One of the many benefits of HR analytics today is the ability to properly
determine the likelihood of any employee leaving the company. This HR metric
is predictive based on specific variables and can save you a lot of money when
it comes to your recruitment efforts.

Employee Engagement
Employee engagement has become a very important HR metric for
organizations today as more and more businesses begin to realize the impact
engaged employees have on their bottom line. Measuring employee engagement
allows employers to know the extent to which employees are involved in
different projects, allows employees to identify with the corporate image or
brand and believe in the organization, as well as allows employers and
employees to align with the strategy of the business. The benefit of this new HR
metric is improved retention and reduced turnover rates.

Performance Prediction
There are many benefits of HR analytics today and one of those benefits is
being able to hire employees based on what they can bring to the company,
rather than what their educational background is. Many employers today have
begun to realize that having a degree doesn’t necessarily make a candidate a
better match for an open position and in some cases, the experience is much
more important. Thanks to the evolution of HR analytics, companies today can
ensure that they’re hiring the best employees to fill any open positions, based on
the performance they bring to the table and not their educational background
alone.
Diversity
Our world is becoming increasingly diverse yet many organizations have a
tough time hiring diverse employees. Thanks to the evolution of HR analytics
though, organizations today can improve their diversity hire rate and experience
the added benefits of HR analytics that diversity hires bring to a company.

From being able to only gather data but not do much with it to being able to
determine the likelihood of an employee staying with your company for an
extended period of time, the evolution of HR analytics is still an ongoing
process but continues to improve HR processes at all types of organizations.
Without proper HR metrics implemented at your organization, you will not be
able to experience the massive amount of benefits of HR analytics today.

Imagine a time when workers were considered expendable. Before

the evolution of HR to today's standards, working conditions were
harsh and dangerous (think the Middle Ages) and the tension
between the need for physical protection and higher output was
growing.

Maybe modern working conditions were never as terrible as the

medieval period, where you can imagine people were out for
themselves and there wasn't a human resource department to
quash the bullies and make them put down their swords. But there
was a time when working conditions were untenable and unsafe for
human beings.

Pre-1900s Human Resources Management: Tough Work, Tougher

Conditions

The idea of a connection between worker wellbeing and their

productivity emerged between 1890 and 1920. American business
leaders, aided by scholars and politicians, embraced "industrial
betterment" and embarked on plans to stabilize the labor force and
encourage employee loyalty. To carry out the somewhat
surreptitious practices of the time, departments called “industrial
welfare,” and “scientific management” were created.

The Main Takeaway:  Workers need to be treated as people, not as

expendable resources by a company.

1920s–1950s Human Resources Management 

Lucky for us human beings, the workplace began to change with the
realization that workers were not puppets on a string, but people
with emotional and psychological needs. "Personnel departments"
and "manpower development" increased their efforts around
internal training and working with labor unions to develop stronger
compensation packages. “Human capital” became synonymous for
the knowledge an individual embodies in affecting economic growth.

The Main Takeaway:  When employees have opportunities to learn on

the job and be compensated fairly for their efforts, they become more
valuable to the organization.

1960s–1980s Human Resources Management

In the early '60's, the US legislature began passing fairer employment

practices such as the Equal Pay Act of 1963 and Civil Rights Act of
1964 compelling human resource departments to focus on
compliance issues. At the same time, human motivation theories
including Herzberg’s Two Factor Theory and Deci and Ryan’s Self-
Determination Theory, began to transform the workplace.
Organizational management and industrial psychology contributed
to HR paying more attention to employees' need for achievement,
advancement, and recognition by matching the nature of the work
itself with a person's skills and interests.
The Main Takeaway:  Workers need certain rights to be considered for a
job, but they also need psychological motivators including autonomy,
purpose and mastery to excel in their work.

Related: Discover the art and science of motivation, reinforces this

through  MotivologySM.

1990s–2010s Human Resources Management

The role of HR is more complex than ever. New and emerging

technology has shifted the focus from personnel management and
administrative tasks, today’s HR departments—at least the forward-
thinking ones—spend their energies managing employee
engagement and strengthening culture. They’re also charged with
managing the employees themselves to increase the odds they’re
happy at work and will continue to stick around for the foreseeable
future.

Through the decades, the workforce evolved from labor-based to

services-focused requiring HR to shift from a process-centric function
to a worker-centric function, according to SHRM. Understanding the
needs, wants and motivations of a diverse and multi-generational
workforce has led HR to attract and retain high-performers, but the
battle for top talent has accelerated. The competitive business
environment and globalization necessitates that workforce change
initiatives be based on and integrated into the business strategies
giving more HR leaders a seat at the C-Suite table.

The Main Takeaway:  Human resource management responsibilities

reach far beyond administrative and compliance accountabilities.
Having a strategic understanding of the business climate will position
you to recruit, hire and retain the best employees while adding value at
the highest levels in the organization.
The Future for HR Leaders

SHRM points out that, "Tomorrow's HR leaders will need to be bigger,

broader thinkers, and they'll have to be tech-savvy and nimble
enough to deal with an increasingly agile and restless
workforce." Gartner agrees saying HR leaders will need to be "more
flexible and responsive to changing employee needs."

Leaders who understand HR's enormous value in the workplace will

have a unique, big picture view from both the company perspective
and employee perspective.

Here are five ways to help human resource management get there:

1. Embrace Technology & Analytics. Let go of old practices.

Predictive analytics will grow to “assess everything from
employee retention to recruitment strategies to the success of
wellness programs” according to a report by SHRM. Leverage
data to augment better informed decisions.
2. Understand Employees’ Life Stage. Today’s workforce is a
hodgepodge of employees going through a variety of personal
and professional change. Different employees will be
in different stages of life and career and may require
employers to make adjustments to find a balance between
work and life. They expect a wide range of employee
experiences to be accommodated by technology. In addition,
they want ongoing coaching, greater visibility and recognition.
HR should manage these efforts.
3. Change Your Mindset. In today’s competitive space where
driving engagement with both employees and customers is
vital, it’s important for marketing and HR executives to lead the
charge toward a meaningful partnership. Human
resource management is changing and HR leaders, “need to
transform their perceived administrative roles to positions of
innovation.” HCM (Human Capital Management) indicates there
 will be more cross-functional consulting among HR and
departments like marketing, customer service and finance.
4. Shift From Being Reactive to Proactive. HR professionals
have the “ability to completely transform a business’ entire
workforce,” says human resource consultants, G&A Partners.
Start by consolidating processes, developing future leaders and
building a culture of recognition to sustain employee morale,
productivity and retention.
5. Spend Time on Your Employer Brand Message. This
communicates what sets your organization apart and why
prospective employees should consider it. But if storytelling
isn’t your jam, consider connecting with your marketing team
members for support. They can help ensure you say exactly
what you want to say. This will also help you think long-term
about how best to integrate this message into the daily
experiences of your employees so it stays with them.
The 19th century "industrial betterment" is light years away from
HR's future opportunities to form a highly satisfied, productive and
happy workforce. “The next-generation HR function has an essential
role to play, replacing traditional ‘best practices and cost-cutting’
approaches with bold new strategies, structures, tools, processes
and metrics,” notes KPMG’s Vishalli Dongrie, Head of People &
Change in India. 

In other words, the future of human resource management puts

emphasis on humans; less so on humans as a resource.

MODELS OF HR ANALYTICS
HR analytics, talent analytics, people analytics, and workforce analytics have
become a confusing jumble of concepts. They can have different meanings
depending on context, but we frequently use them interchangeably.
To make matters worse, the term “analytics” often becomes conflated with
reporting and business intelligence. Software vendors package reports and
dashboards in their applications and call it analytics. Business intelligence
vendors wrap their entire suite of offerings into “analytics,” using it as an all-
inclusive term.
Embedded analytics is powering a new hype cycle, with competition driving a
rush to bring reporting and analytics directly into business applications,
enabling better decision-making. A new model for delivering actionable
information to business users is rendering IT-driven, centrally provisioned,
highly governed and scalable system-of-record reporting obsolete.  The future
belongs to self-service data preparation and data discovery, where users can
employ plain-language search tools to find the answers they need to seize
opportunities at today’s speed of business.[1]
Words matter. They can shine light on a concept or obscure it. When the future
of a project or strategic initiative depends on shared understanding, lack of
clarity has consequences. We want to spend a few minutes to develop a
framework for bringing your team together by promoting clarity of meaning.

The Analyst’s View

When researchers and data professionals refer to analytics they are describing
statistical and predictive

modeling—much different from the reports people use every day to manage
everyday business operations. They focus on predictions and connecting
between data and business outcomes. Reporting information in dashboards is
not analytics, it is operational or management reporting. Predictive analytics is
also much different from the simple analysis we use to correlate information
from various sources to understand what is happening now or occurred in the
past.[2]
Little of the work data teams do is predictive analytics. At the strategic level,
few things matter, but they matter a lot. Answering the big questions that
determine the direction of the business is worth the investment in sophisticated
statistical modeling. Most data work is reporting on processes and events
(Figure 1). We don’t mean to say reporting is not important. It is essential, but
requires fewer resources.

Marketing Messaging
Human capital management software vendors include “analytics” in their
marketing, but few offer true analytics in their reporting functions. Data
preparation tools are usually not part of the package. We can expect those things
to change quickly. Gartner, Inc’s strategic planning assumptions for analytics
point to a radical shift in the way business software vendors deliver data to end
users.
According to Gartner, by 2018

 most business users and analysts will have self-service tools for data
preparation,
 stand-alone self-service data preparation will expand into full analytical
platforms or be integrated into existing platforms, and
 smart, governed, Hadoop-based, search-based and visual-based data
discovery will converge into self-service data preparation and natural
language generation.[3]

Analytics in HR
To make sense of the way we use terms for analytics in HR, we reviewed the
way vendors and practitioners use the terms and applied our experience and
understanding to the differences among them. In many contexts, the differences
do not matter, but when they do matter, a lack of understanding can lead a
project team astray.

 Workforce Analytics focuses on workforce metrics and optimization,

applying statistical models
 to  worker-
related data to optimize human resource management. (Techopedia). In a
general sense, it relates to the size and shape of the workforce.
 People Analytics originated with the Google approach to making people
management decisions (Sullivan). A radical departure from the subjective
approach to managing people decisions, it infers application of the same
rigor used in engineering decisions to people decisions.[4]
 Talent Analytics means anything from using data to manage the
workforce to planning a single career, depending on the
source. Bersin defines it as “the use of measurement and analysis
techniques to understand, improve, and optimize the people side of
business” and conflates it with big data and people analytics.[5] Merriam-
Webster defines “talent” as the natural endowments of a person or a
group of individuals. Those attributes are what drive the competitive
advantage people bring to an organization.
 Human Resource Analytics is the application of analytics to HR
processes to improve employee performance and return on investment
(Techopedia). In its strictest sense, it focuses on how well the HR
organization provides services, with the ultimate output being
performance and productivity.
Use these suggestions as a starting point for creating the lexicon that works for
you. Clarification of terms will help your planning and project teams form
operational definitions that foster common understanding.