From People to Patterns: Should HR Professionals Become Data Wizards?

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4 MIN READ | Last Updated on 13 April 2024 

BY: Kanchana Nirupamala (E223799) 



 Source: (Tata Consultancy Services, 2024) 

Data-driven insights are paramount in navigating today's volatile, uncertain, complex and ambiguous (VUCA) business environment. In light of the growing importance of data analytics, one must ask: should HR practitioners get analytics training? The answer is YES. The role of HR has evolved from operational HR during the 1990s to strategic HR in the 2000s to the data-driven HR now (Boatman, 2024; Marr, 2023). This blog delves into analytics and human resources and provides a fair and impartial perspective on how analytics might impact HR practices and decision-making in modern organizations. 

Evolution of HR Role 
Source: (Marr, 2023) 

What is HR Analytics? 

Also known as people analytics or talent analytics, HR analytics entails gathering and analyzing HR data to back smart business choices (White & Bottorff, 2023). It focuses on studying how workers behave, how well they work, how productive they are, and how they connect. The key objective is to make informed decisions on the company's workforce across different HR functions: HR planning, recruitment, training and development, performance management, compensation and employee relations. 


Importance of HR Analytics 

HR analytics plays a pivotal role in the strategic management of modern businesses. Its importance is multifaceted. 

 • Informed Decision-Making 

Decisions made by the HR department may be grounded on facts, not gut feelings or assumptions, thanks to the evidence-based insights provided by HR analytics. Better, more strategic decision-making is a result of this.

• Talent Management 

Improved recruiting, training, and development tactics are made possible by gaining a deeper understanding of the characteristics and abilities of high-performing individuals. This ensures that the organization's objectives are met by hiring and developing the proper personnel. 

• Performance Management 

Organizations may find strengths, trends, and places to enhance their performance by analyzing performance data. With this information, performance management tactics may be improved, leading to more efficiency and output from staff. 

• Cost Reduction 

To save costs, HR analytics may be used to find areas where HR operations and workforce management are inefficient. Companies may save money by enhancing staff planning and streamlining the recruiting process. 

• Competitive Advantage 

Companies may get a competitive edge via HR analytics by enhancing their HR services. This results in a staff that is more motivated, productive, and stable. 

Importance of HR Analytics 
Source: (Edureka HigherEd, 2023) 

Check this video for more understanding of HR Analytics and its benefits: .

Source: (AIHR, 2019) 


Types of HR Analytics 


HR analytics can be broadly classified into four: (1) Descriptive analytics, (2) Diagnostic analytics, (3) Predictive analytics (4) Prescriptive analytics (Gupta & Sharma, 2022). These have unique features and purposes and differ based on complexity level. Descriptive analytics is the least complex involving data reporting, while prescriptive analytics is more complex, facilitating decision-making via the use of complicated algorithms and, often, data processed in real time. 

Types of HR Analytics 
Source: (Boatman, 2024) 

HR Analytics Classification
Source: (Gupta & Sharma, 2022).

Success Stories in HR Analytics

eBay is a key company that uses HR analytics to make data-driven employee decisions. Using Visier People, an HR analytics tool provided by Canadian Visier, eBay dissects the whole employee experience, from creating development plans and remuneration packages to customizing perks (Visier, 2024). By doing so, the company increases employee engagement and performance and saves millions of dollars by cutting attrition even by a small percentage. 

Scott Judd, Senior Director of People Analytics & Technology at eBay, explains the importance of HR analytics as follows:


Source: (Visier, 2024) 

Google uniquely employs analytics by polling workers regularly. They optimize and match their HR procedures and the working culture using the feedback or data. With an average participation rate of 90%, they have a lot of engaged workers, which shows that they have succeeded in enhancing company techniques and morale (McNeill, 2020). Employee mobility and turnover are WalMart's emphasis. With HR analytics, Walmart can highlight employee responsibilities and advancement opportunities, particularly in talent development and competence. Better results in almost every area of the business result from increased efficiency and productivity (McNeill, 2020).

 

Way More to Go…….

The majority of companies worldwide still need to prepare to implement and integrate HR analytics despite its perceived value, according to Deloitte (2018). Another survey was conducted by HR. Research Institute (2021), considering 302 HR professionals, just 29% consider themselves excellent or very good at using people analytics to make positive changes, while 35% consider themselves "moderate" at best. This implies that around one-third of HR professionals need to improve their use of people analytics to bring about positive change. One of the biggest obstacles is the company culture. Further impeding this shift is the need for more analytically minded individuals and the corresponding software and hardware (Fernandez & Gallardo-Gallardo, 2020).

Perceived Importance of HR Analytics
Source: (Deloitte, 2018)

Any Solution?

Organizations may address the shortage of analytics-savvy HR workers and the associated infrastructure issues in numerous ways:

  • Invest in Training: Create courses to help human resources experts become more analytical.
  • Integrate Data-Driven Culture: To transform the organization's culture, leadership should prioritize data-driven decision-making.
  • Recruit Analytical Talent: To close the gap, the company should hire people good at analysis.
  • Invest in Technology: Put money into the HR analytics software and hardware need.
  • Teamwork: Promote teamwork across HR and other departments, such as IT, to facilitate sharing of information and resources.

To Conclude

 Integrating HR analytics is ongoing, but the path forward is clear. Investments in talent development, a data-appreciating culture, targeted hiring, enhanced technological capabilities, and cross-departmental collaboration are all critical. By embracing these strategies, human resource professionals may thrive in today's data-driven environment. In addition, they can turn ideas into actions and take their businesses to the next level.


References

AIHR, (2019). How Does HR Analytics Help HRM? | AIHR Learning Bite. [Online]. Available at: https://www.youtube.com/watch?v=lTzWGaFpimk. Accessed on 18 March 2024.

Boatman, A., (2024). 4 Types of HR Analytics [With Examples]. [Online]. Available at https://www.aihr.com/blog/types-of-hr-analytics/. Accessed on 18 March 2024.

Deloitte, (2018). 2018 Global Human Capital Trends, London: Deloitte. [Online]. Available at https://www2.deloitte.com/us/en/insights/focus/human-capital-trends/2018.html. Accessed on 17 March 2024.

Edureka HigherEd, (2023). What are HR Analytics and Metrics?. [Online]. Available at https://www.edureka.co/blog/hr-analytics-and-metrics/. Accessed on 18 March 2024.

Fernandez, V. & Gallardo-Gallardo, E., (2020). Tackling the HR digitalization challenge: key factors and barriers to HR analytics adoption. Competitiveness Review: An International Business Journal., pp. 1-44. [Online]. Available at https://upcommons.upc.edu/bitstream/handle/2117/332828/HR%20digitalization%20challenge.pdf?sequence=3. Accessed on 17 March 2024.

Gupta, S. & Sharma, R., (2022). Types of HR Analytics Used for the Prediction of Employee Turnover in Different Strategic Firms with the use of Enterprise Social Media. Proceedings of the 5th European International Conference on Industrial Engineering and Operations Management Rome, Italy, pp. 1977-1994. [Online]. Available at https://www.researchgate.net/publication/368313154_Types_of_HR_Analytics_Used_for_the_Prediction_of_Employee_Turnover_in_Different_Strategic_Firms_with_the_use_of_Enterprise_Social_Media. Accessed on 17 March 2024.

HR. Research Institute, (2021). The State of HR Analytics 2021, Canada. [Online]. Available at https://www.oracle.com/a/ocom/docs/applications/human-capital-management/hrt-talent-analytics-hrdotcom.pdf. Accessed on 17 March 2024.

Marr, B., (2023). The Evolution Of Data-Driven And AI-Enabled HR. [Online]. Available at https://www.forbes.com/sites/bernardmarr/2023/12/08/the-evolution-of-data-driven-and-ai-enabled-hr/?sh=218555501549. Accessed on 18 March 2024.

McNeill, M., (2020). How 5 Successful Companies Are Using HR Analytics. [Online]. Available at https://www.icslearn.co.uk/blog/human-resources/how-5-successful-companies-are-using-hr-analytics/. Accessed on 17 March 2024.

Tata Consultancy Services, (2024). Effective Decision-making with HCM Transactional Dashboards. [Online]. Available at https://www.tcs.com/insights/blogs/hr-analytics-dashboard-effective-decision-making. Accessed on 18 March 2024.

Visier, (2024). Customer Story: eBay. [Online]. Available at https://explore.visier.com/customers/ebay. Accessed on 17 March 2024.

White, J. & Bottorff, C., (2023). HR Analytics: Definition, Best Practices & Examples. [Online]. Available at https://www.forbes.com/advisor/business/hr-analytics/. Accessed on 17 March 2024.


Comments

  1. Dinesha Paranagama ELMSApril 6, 2024 at 10:33 AM

    Great article, Kanchana! Your clear and concise writing style made the topic of HR analytics easy to understand. I particularly appreciated the real-world examples you included, which helped illustrate the importance of data-driven decision-making in HR. Your practical suggestions for overcoming adoption challenges were spot-on. Looking forward to reading more from you.

    ReplyDelete
  2. Anjali Hettiarachchi E225448April 6, 2024 at 11:02 AM


    "From People to Patterns: Should HR Professionals Become Data Wizards?" raises the question of whether HR should embrace data analytics more extensively. It suggests that adopting a data-driven approach could enhance HR's ability to understand and cater to employee needs effectively. However, it also underscores the importance of maintaining the human touch in HR practices. keep in touch with like this great articles.

    ReplyDelete
  3. manojidilushaApril 7, 2024 at 7:39 AM

    HR analytical article is easy-to-understand & we can enhance our knowledge. Good work

    ReplyDelete
  4. Sameera SandaruwanApril 8, 2024 at 10:33 AM

    Overall, the blog effectively underscores the significance of HR analytics in driving organizational success and offers practical insights into overcoming challenges and implementing effective HR analytics strategies. well done!

    ReplyDelete
  5. Geeth ChathurangaApril 9, 2024 at 4:35 AM

    “Useful post & Great article, Kanchana!

    ReplyDelete
  6. LAthan (E223750)April 9, 2024 at 6:11 AM

    As a data scientist, I totally agree with this article! It's crystal clear about how important data is becoming in HR. Breaking down HR analytics into different types makes it easy to understand their benefits, from making better decisions to saving money.

    The idea of HR professionals becoming data wizards is spot on. It's not just a trend; it's essential for staying ahead in today's world. Great job on shedding light on this crucial aspect of HR!

    ReplyDelete
    Replies
    1. Kanchana Nirupamala (E223799)April 9, 2024 at 8:28 PM

      Totally agree with you! We live in information age so we cannot disregard important of data for our decision making.

      Delete
  7. Piyumi FernandoApril 10, 2024 at 9:34 AM

    Good job dr, keep it up

    ReplyDelete
  8. Kasun KarunaratneApril 12, 2024 at 4:16 PM

    HR professionals should be trained in data analytics to navigate the volatile, uncertain, complex, and ambiguous (VUCA) business environment. HR analytics, also known as people analytics or talent analytics, focuses on gathering and analyzing HR data to support smart business decisions. It plays a pivotal role in strategic management of modern businesses, providing evidence-based insights for better decision-making, talent management, performance management, cost reduction, and competitive advantage. HR analytics can be classified into four types: descriptive, diagnostic, predictive, and prescriptive. Success stories include eBay using Visier People to make data-driven employee decisions, Google optimizing HR procedures and working culture, and Walmart highlighting employee responsibilities and advancement opportunities. However, many companies still need to integrate HR analytics despite its perceived value. Solutions include investing in training, integrating a data-driven culture, recruiting analytical talent, investing in technology, and promoting teamwork. By embracing these strategies, HR professionals can thrive in today's data-driven environment and take their businesses to the next level.

    ReplyDelete
    Replies
    1. Kanchana Nirupamala (E223799)April 12, 2024 at 7:50 PM

      agreed on the companies that u mentioned. They are disruptors!!

      Delete
  9. R. A. P. K. JayaratneApril 13, 2024 at 6:32 AM

    As organizations generate more and more data, the role of HR professionals is evolving. In today's data-driven world, HR professionals must have a solid understanding of data analysis and be able to interpret data to make informed decisions. Therefore, becoming data wizards can help HR professionals gain a competitive advantage and add value to their organizations. So, it's time for HR professionals to embrace data analytics and become proficient in data-driven decision-making.

    ReplyDelete
    Replies
    1. Kanchana Nirupamala (E223799)April 14, 2024 at 10:31 AM

      agreed! data driven decison making is key in today's BANI enviornment.

      Delete

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