The Power of HR Analytics: How to Use Data Science to Enhance Employee Performance and Retention
Back in 2019, a Deloitte report outlined how an impressive 70% of businesses had embraced the potency of HR analytics to enhance their overall performance.
This was in line with a 2018 CIPD-Workday study. It revealed that 65% of individuals from organizations that pursued a people analytics culture expressed that their companies exhibited superior performance compared to their competitors. Contrarily, only 32% of the employees from organizations with a weak analytics culture affirmed the same.
Considering the rising prominence of data analytics solutions and the overall democratization of data analytics functions across enterprise departments, it won’t be an exaggeration to assume that this number would be even higher today.
The growing significance of HR analytics can be attributed to companies’ need to become more data-driven in their decision-making processes. After all, the ability to critically analyze the data available across organizational functions and systems has become imperative for business success.
Indeed, there seems to be a strong correlation between an efficient HR analytics function and overall employee performance and retention.
HR Analytics – A Primer
HR analytics, also known as people analytics or workforce analytics, works to apply data analysis to gather invaluable insights about human resources and subsequently make informed business decisions.
At its core, HR analytics involves collecting and analyzing data related to employee performance, engagement, recruitment, retention, training, and other HR functions. Why?
To gain a better understanding of people-facing processes
To improve employee engagement
To enhance the recruiting process
To streamline workforce planning
To improve measures targeted at talent retention
All these efforts aim to keep the business competitive and successful by creating loyal, productive employees who add measurable value to the bottom line.
How Does Data Science Power HR Analytics for Improved Employee Performance and Retention
Utilizing data science means paving the way for a systematic approach that integrates data-driven insights into your organization’s HR strategies.
Once you follow a structured data science methodology, you can leverage its power to enhance employee performance, retention, and overall workforce management.
In that light, here’s a rundown of the six essential steps that outline how to effectively leverage data science-enabled HR analytics:
1. Define Your HR Analytics Objectives
Take the time to clearly outline your HR analytics goals, ensuring they are in harmony with your organization’s overarching strategic objectives and individual employee performance plans.
Also, pinpoint the specific dimensions of employee performance and retention that you intend to enhance — whether it’s curbing turnover rates or amplifying productivity.
Notably, this definition step plays a vital role in shaping how you harness the power of HR analytics to effectively pursue and accomplish the targeted goals.
2. Collect Relevant Data
Initiate the process by aggregating data from a range of sources, including employee surveys, performance evaluations, and attendance records.
The wealth of data enables HR professionals to:
Measure and analyze the impact of their human resource activities
Measure specific traits of an individual, such as job satisfaction or turnover
Monitor changes in the company’s workforce
The resulting data analysis results in a structured, standardized report that provides information about employee demographics, compensation structure, training needs, and spending.
3. Analyze Trends and Patterns
Engage in the process of reading patterns by executing rigorous statistical checks to unveil prevailing traits.
Upon completing this analytical phase, HR professionals can extract valuable insights. These insights then grow to be the bedrock upon which knowledgeable choices are made.
Such choices or decisions are instrumental in unraveling the intricate composition of employees and imparting a deep knowledge of the workforce’s dynamics, strengths, and regions for improvement.
All in all, this analytical undertaking empowers HR professionals to navigate the area of human assets with heightened clarity and strategic acumen.
Leverage the prowess of predictive analytics to predict forthcoming scenarios rooted in historical data.
Utilize this predictive capacity to anticipate potential areas of concern, such as identifying employees who might be at risk of departure or pinpointing avenues for performance enhancement. This way, HRs can proactively address potential challenges on the horizon.
With the foresight to anticipate future issues, the HR department is armed with the ability to swiftly provide strategic solutions, thus, fostering a more agile and adaptive work environment.
5. Implement Pertinent Strategies
The formulation of targeted strategies, informed by the wealth of insights gleaned from data analysis, serves as a catalyst for optimizing the efficacy of the HR function within any organizational framework.
For example, insights pertaining to development and skills training can help unearth the areas where training and development initiatives need to be implemented. This can play out particularly well for increasing employee retention.
Research has previously revealed that 92% of employees believe that employee training programs positively influence engagement. 45% even stay longer at companies when they see their organization investing in learning and development initiatives.
At the end of the day, insights gleaned from analytics initiatives can help HRs acknowledge cultural sensitivities and tailor their approach to resonate more deeply with their workforce, thereby fostering a more inclusive and harmonious environment.
The Employee Performance Front
Now that HR professionals have a wealth of data at their disposal, they can use it to understand the performance of their employees. For example, they can:
Measure employee performance in real-time and leverage it for greater accountability, more accurate performance management, and driving innovation opportunities.
Use the data to provide valuable insight into the drivers of workforce productivity and be better positioned to attract, retain, and develop top talent.
Identify employee trends, ranging from turnover rates and performance metrics to diversity and inclusion insights, to make actionable, data-driven decisions that lead to greater business results.
Gain granular insights into the working patterns, benchmark performances, and make better decisions that drive long-term growth.
What’s the Way Forward?
While the notion of steering HR decisions through data might initially seem a bit foreign to enterprises that aren’t yet data-driven, embracing this analytical perspective can usher in a transformational era for talent management.
By understanding the intricacies of human resources via the precision of data-driven insights, organizations stand poised to craft more impactful and efficient talent management programs.
This not only streamlines decision-making but also nurtures a culture of adaptability, ultimately propelling businesses toward greater success on the dynamic stage of modern workforce management.
Ready to elevate your HR strategy? The Rubiscape data science platform helps you create a healthy and productive workplace that effectively supports, engages, and develops top talent.
Connect with us to learn more about how you can lead with HR analytics to make more informed decisions.