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Analytics Moves HR Towards Being a Strategic Partner

Today's post comes to us from board member Neil Reichenberg.

A recent research report “Beyond HR Metrics: HR Analytics” issued by the organization where I work, International Public Management Association for Human Resources (IPMA-HR), sheds light on why and how public sector HR professionals are implementing HR analytics programs at their organizations.

Key findings included:

  • HR analytics result in better communication with senior leadership and affect the strategic influence of HR either somewhat or a great deal.
  • The primary reason for implementing HR analytics practices is to improve HR strategy and performance.
  • Data collection focuses on impacting both internal and external processes.
  • Data collected is used mostly to predict trends and influence future decision-making, report to both HR and the organization, and to answer specific questions or address problems.
  • The most commonly collected HR metrics are headcount (87%), length of service (87%), turnover (74%), and cost of benefits (61%).  

Improvements resulting from the use of analytics in HR functional areas that were cited include:

  • Recruitment/Hiring - Shorter time to hire, help HR departments to update their recruitment strategy, and find better qualified candidates.
  • Training and Development - Develop more effective training, better able to identify training needs, and improve training curricula. These improvements resulted mostly from tracking participation, undertaking post-training evaluations, and conducting annual surveys.
  • Compensation - Ability to provide more accurate and thorough data for market studies, update compensation strategy, adjust salary ranges, and review benefits packages.
  • Workforce/Succession Planning - Ability to identify and report on areas where succession planning is needed, improve succession plans, and develop training programs.
  • Performance Management - Increased completion rate of performance evaluations, assisting to switch to a goal-oriented evaluation approach, and facilitating the use of more frequent performance discussions.
  • Diversity and Inclusion - Ability to track and report demographic data, developing engagement programs, and updating diversity goals.

Obstacles to implementing HR analytics that were cited by the survey respondents included insufficient funding, lack of training, and no access to analytics software. Only 1/3 of the survey respondents are part of an organization that has a person or team dedicated to HR data analysis, and only 20% indicated that their employer provides training to HR professionals on data collection and analysis.

Overall, this report shows that more and more organizations are looking to analytics to increase the strategic value of HR. Despite this fact, organizations have not yet staffed this function appropriately or provided training to their own staff to ensure the measurement is done effectively. Staffing and training of this function are opportunities for organizations in the coming months and years.

What about your organization? Is HR using analytics to make better-informed decisions? Or do you think they should? Tell us about it in the comments.

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