HR Analytics Explained – Metrics & Reporting Strategies

Technology has transformed the way the world does business. Not only from a B2C perspective, but also from an internal point of view. The advent of ‘Big Data’ has been particularly transformative for HR departments, and now serves as a major differentiator for gaining advantage over competitors.

Armed with bona fide insight into a host of variables, businesses are able to replace intuition with informed decisions. This is the reason an increasing number of blue chips are investing BIG money in HR analytics, with giants like Google and Facebook at the vanguard of the movement.

To put the concept of Big Data into perspective, here’s a glimpse at some examples that even the most unseasoned of tech can relate to:

  • 71% of all beef consumed in American restaurants is in the form of a burger, with McDonald’s serving up over 1 billion pounds of hamburger meat per year.
  • In 2015, Facebook had more than 1.59 billion global monthly active users, with a huge 1.44 billion of these identified as active mobile users.

Basically, analytics is a sizzling hot topic and the HR sector is no exception. So how can HR analytics help businesses gain a competitive advantage over the competition?

HR analytics defined

To really understand how HR analytics benefits businesses, it’s important to understand exactly what it is. Also referred to as talent analytics, HR analytics describes the application of data and business information to a human resources context.

The goal is to empower businesses with insight into how to effectively manage employees, increase productivity and reach goals as quickly and efficiently as possible.

The art of HR analytics isn’t without its challenges, with one of the biggest decisions being what data to capture, and how to maximise ROI.

The benefits of HR analytics

Improved hiring decisions

Employees are the heart and soul of any business, which means hiring the right staff is fundamental. Drawing on historical data as well as individual applications, HR analytics is used to hone in on the best candidates.

With a recent CAP study estimating that the cost of hiring a new employee sits at around 16% of annual salary for high-turnover/low-wage jobs, it pays to get it right the first time.

Basically, HR analytics helps businesses make informed hiring decisions, which ultimately saves them a big chunk of cash.

Strategic training

Staff investment is an integral part of building an inspired workforce. Gaps in the initial training process can lead to underperformance and costly mistakes.

From a retention point of view, professional development programs play an important role in boosting staff satisfaction, crystallising loyalty and minimising turnover.

By collecting training data and learning from the patterns, HR analytics can be used to develop strategic onboarding programmes, and ensure that all employees receive the training they need to perform at their absolute best.

Staff retention

As mentioned earlier, the cost of staff turnover is a major expense for businesses of all shapes, sizes and sectors.

In the past, exit interviews and intuition were the only way to gain insight into why employees threw in the towel. Now, the advent of HR analytics is arming businesses with candid insight into the various factors that influence employee retention rates.

Drawing on data like performance, skillset analysis, satisfaction surveys and team assessments, HR analytics offers businesses the scoop on patterns, trends and outliers. Data can then be used to chart retention strategies, and minimise turnover costs.

Improved organisational performance

HR analysis allows businesses to evaluate the individual performance of each employee, encompassing everything from sales figures and KPIs to absenteeism and salaries.

This data can then be used to make informed, high-quality, talent-related decisions that genuinely improve organisational performance. This includes identifying high value employees, and using data to optimise talent through strategic training and development programmes.

Increased productivity

True to the nature of HR analytics, the numbers speak for themselves. A recent survey by MIT and IBM confirmed the value of Big Data within a human resources context, reporting that companies with a high level of HR analytics enjoyed the following benefits:

  • 8% higher sales growth
  • 24% higher net operating income
  • 58% higher sales per employee


The ability to predict workforce requirements is intrinsically linked to business performance and productivity. Using historical data, HR analytics allows businesses to prophesise patterns and prepare for both spikes and slumps.

Enhance employee satisfaction

Employee satisfaction is inherently linked to organisational productivity. HR analytics unlocks access to the staff perspective, and allows businesses to recognise the factors that drive both employee satisfaction and organisational productivity.

Across the board, data management, analysis and interpretation is playing an increasing role in the HR narrative.

The concept may seem overwhelming at first, but with a strategic approach you can use HR analytics to empower your business with Big Data, and give yourself a fierce edge over the competition.

Learn more about how to make workforce management more efficient and effective on the Ento blog today.

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