The Crazy World of Human Resource Analytics

by Jeremiah Johnson

The Right Data For HR Insight

Fortune 500 companies have successfully leveraged their HR analytics to improve productivity for years, and even smaller companies are now doing the same.  As companies collect HR data, they better position themselves to make important decisions about hiring, retention and capacity.  The more information executives have, the more planning meets practice.  Human Resource analytics offer insights into the most effective hiring practices and the most effective ways to organize and motivate existing employees.  The challenge lies in collecting the right kind of data and using it to provide the right type of analytic reports.

Identifying Important Information

Businesses generate an amazing amount of raw data, but without some organizational structure and a solid understanding of what the numbers mean, data is useless.  Knowing that 10 percent of the sales force showed a remarkable increase in their numbers does not help a business duplicate the feat unless HR personnel make the connection to a particular training course.  HR data must be interconnected, with all the different pieces coming together to provide a coherent look at the whole.  From within an organization, it is often difficult to pick out the most important pieces of information, a case of not seeing the forest for the trees.  An outside perspective can be very helpful in choosing how to best utilize all the raw data collected by a human resources department.

Bringing in Strategic Consultants to Manage Information Organization

Analytical information is only as valuable as the data used to generate the report.  It requires considerable expertise to transform raw information into solid, organized reports.  Few companies have the internal resources to successfully create human resource analytics that provide useful information.  Software suites such as Peoplesoft, Workday, and Oracle E-Business Suite help with data collection procedures, but it takes a human eye and an understanding of employee development to make the most of human resource analytics.  Experts in the field understand how to package data to enable easy reporting that shows actual results. 

It is easy for poorly correlated data to provide wrong information on reports.  For example, a company needs to cut overtime hours to employees by 5 percent.  In order to make that happen, HR runs a report showing all departments over the target number and all departments significantly under the target number.  Inexperienced HR professionals might think that a quick juggling of employee hours could balance the overtime, but things are rarely that simple.  A look deeper into the data surrounding the overtime hours could reveal productivity losses or a training lag.  Instead of juggling employees, which will cause productivity decreases as inexperienced employees try to perform outside of their job description, HR could simply arrange for a training seminar to bring all their employees up to speed on changes to equipment, software or processes, reducing the need for overtime.  An outside pair of eyes brings fresh perspective to the problem.

Quality Reports Enable Quality Decision Making

Raw data must be put together into a coherent picture to be useful.  Even with new methods of employee tracking, it is challenging for businesses to see all of the different correlations and information needed to generate the best reports.  Bringing in an outside consultant from a company with HR Analytics experience allows businesses to get a look at the entire picture by working with an unbiased perspective and a solid understanding of how data can be used to create reports.