Ijhrmr - HR Analytics - A Strategic Approach To HR
Ijhrmr - HR Analytics - A Strategic Approach To HR
Ijhrmr - HR Analytics - A Strategic Approach To HR
ABSTRACT
HR analytics is playing major role in today's business changing environment with increased business
requirements towards organizational efficiency. It enables better decision making about workforce using employee data.
HR analytics supports organizations for mapping HR metrics with strategic business goals. It majorly focus on acquiring
talent to assessing future HR needs by improving employee morale and satisfaction.
HR analytics supports data interpretation to recognize trends and take corrective measures for profitable
functioning of business. organizations strive for more innovative business practices to improve efficiency and HR
analytics has the highest impact on organizational success. The paper highlights how the business analytics provides a
multi dimensional approach towards building an effective HR strategies.
Received: Apr 14, 2016; Accepted: Apr 25, 2016; Published: May 03, 2016; Paper Id.: IJHRMRJUN20164
INTRODUCTION
Strategic planning become more complex for business units and subsequently for the Human resource
Original Article
function with recent advances in data driven analytics and the resultant improved capabilities in working with
huge data sets. Most business units have already adopted predictive analytics to guide their decision-making and
strategy development processes. Predictive analytics offered new opportunities which are applicable to all core
human resource processes such as employee sentiment analysis, talent acquisition, capacity planning & attrition
risk management.
Figure 1
The effective approaches to the measurement of HR analytics and the impact of people on organization
processes will enable utilization of human resources more effectively. This measurement is accomplished by
focusing on the development of HR analytics and supporting HR metrics that meet the needs of organization
decision makers.
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HRM strategies are changing in terms of HR metrics and hr analytics being used in the organization for better
decision making. These advances will help the organization balance the costs & benefits of decisions. Human resource
analytics can help organizations take current operational and strategic data and convert it into an active approach to
tomorrow's HR issues. HR analytics has become an important tool for success; leveraging current data to anticipate future
ROI that serves as a source of competitive advantage.
Figure 2
HR analytics solutions can help
Prioritize and target applicants who are most qualified for a specific position.
Forecast workforce requirements and determine how to best fill open positions.
Link workforce utilization to strategic and financial goals for improved business performance.
Identify the factors that lead to greater employee satisfaction and productivity.
Discover the underlying reasons for employee attrition and identify high-value employees at risk of leaving.
Figure 3
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LITERATURE REVIEW
Table 1
S.
No
Author
Title
Dulebohn
&Johnson (2013)
Workforce Analytics
Approach: An Emerging
trend of Workforce
Management
Human Resources in an
Enriched Environment of
Business Intelligence
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Steps in HR Analytics
Figure 4
The Future of HR Analytics
HR analytics is an evidence-based approach for improving individual and organizational performance by making
better decisions on the people side of the business. HR analytics can certainly enhance the credibility of the HR function by
improving the effectiveness of HR policies and practices and contributing to the competitive advantage of organizations
that develop it as a core competency. As such, HR professionals develop new skills and capabilities so that they can
effectively partner with and lead IT and finance on HR analytics initiatives. Along the way, HR professionals will need to
address ethical dilemmas.
Without a doubt, mastering the art and science of HR analytics takes effort. But it can result in an elevation of the
status of the hr practitioners by helping them to guide their organizations in finding the intersection between more
profitable and more enlightened management and development of people. Mastering this effort would represent a win-win
for employers and employees, and ultimately the society in which we live and work.
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Figure 5
Effectiveness of HR Metrics and Analytics
HR Practices to Performance
Evaluating HR Practices
Benchmark Data
Electronic (on-line
line application, rsum)
Virtual on-boarding/e-learning
learning data
Assessment of HR Metrics
It is necessary to determine the HR metrics that an organisation will use for decision analysis process, but several
measurement characteristics of each objective owners of data.
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Table 2
Employment
External Hire Rate
Net Hire Ratio
Rehire Rate
Referral Rate
Average
Interviews
per Hire
Performance Appraisal
Average Rating
Peer Review Rate
Self-Appraisal Rate
Performance-based
Pay Differential
Upward Review Rate
Talent Management
Manager Instability Rate
Manager Quality Index
Successor Pool Coverage
Successor Pool Growth
Rate
Remuneration
Average Hourly Rate
Bonus
Actual
to
Potential Rate
Compensation
Satisfaction
Index Overtime Rate
Bonus Eligibility Rate
Separation
Involuntary
Termination Rate
Voluntary Termination
Rate
Average Termination
Value
Figure 6
Practical Road Map to Conducting HR Analytics
HR analytics moves beyond conducting analysis and creates an environment of executive buy-in, cross-functional
interaction, targeted initiative-building and a discipline of measurement and re-focusing. It includes following steps:
Step 1: Determine Critical Outcomes
An organization must first determine the top two to three most critical outcomes on which to focus. For example,
outcomes such as productivity, turnover and customer satisfaction are commonly desired outcomesbut those are not the
end of the list. Financial indicators, costs and safety-related data are all outcomes that can be connected to employees. Key
stakeholder interviews of the board, CEO, CFO or other business leaders are very helpful in the processthis is also a
great chance to generate buy-in.
Step 2: Create Cross-Functional Data Team
Next, you will need to identify the various owners of the outcome data. These data owners become the key
members of a cross-functional data team (CFDT) that needs to be organized. This team should consist of measurement
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experts, key line-of-business leaders or metric owners, and HR leadership. The measurement experts are needed to
determine data requirements, to scientifically link the necessary datasets, and to conduct the requisite statistical analyses.
Step 3: Assess Measures of Critical Outcomes
The next step is to determine how data are currently captured in the organization. This step gets into the details of
the actual analysis process, but several measurement characteristics of each outcome measure must be assessed:
Level of measurement (e.g., by line of business, by work unit, by manager, at the store level, at the
department/function level).
Organizational owners of each of the outcome measures (e.g., the department or leader of the particular
measurement).
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CONCLUSIONS
To play a more relevant and strategic role in the organization, the HR function needs to move beyond mere
reporting to accurate prediction. Instead of just generating reactive reports, it needs to embrace advanced analytics and
predictive techniques that support strategic organizational goals. Application of predictive analytics in HR entails utilizing
relevant data to solve specific business problems. The insights derived can help improve business performance as well as
employee engagement and satisfaction.
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