Employee engagement and productivity is changing for good. With your workers sharing opinions, reviews, and commentary on multiple platforms, there’s are massive data volumes pouring in which are full of rich insights. Having a robust HR analytics strategy in place can help measure performance, fine-tune workforce management blueprints, and push employers to greater heights.
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Today, HR analytics is being used by businesses across the globe. For high-performance employers, a smart HR analytics strategy can unleash several overarching benefits, while improving the ROI. So how does HR analytics really work, and what is its true impact on a businesses’ bottom line?
Also read: Top Trends Driving the Demand for an HR Analytics Strategy
We share 5 principle illustrations of the impact of a well-articulated HR analytics strategy.
Enhancing hiring precisions
Recruitment continues to be a vital area for companies, fraught with several fluctuating challenges. An HR analytics strategy can help you review previous decisions and approaches, refine approach, and making hiring more aligned to specific requirements. This makes the process faster by eliminating time wasted on futile applications and focusing on the connections that really matter.
Also read: 3 Ways Predictive Analytics is Changing Recruitment Practices
Boosting employee retention rates
High employee turnover is another problem area for modern businesses. With a powerful HR analytics strategy in place, you can identify the reasons why an employee moves away from a business, allowing you to rethink your retentions strategies. It can even detect employee disengagement, a big differentiator for retention.
Take a leaf from IBM’s playbook: Big Blue leveraged their HR analytics strategy to get a real-time view of employee engagement. It was found that 48% of the variability in employee-engagement scores could be accessed beforehand, by analyzing social-media-data use among employees. IBM developed Social Pulse, a “social-media sentiment” tool, in response, and created a data-based channel to hear the voice of the employee. Read HR analytics strategy success stories at IBM and other top employers here.
Evaluating data on employee attrition, conducting exit interviews, and satisfaction surveys, your HR analytics strategy must go beyond numbers and arrive at a definitive understanding of what’s working for a business, and what needs fixing. This ultimately reduces the cost of hiring new employees to replace a spate of exits, thereby enhancing the bottom line.
Also read: Driving Retention Using Talent Data and Analytics
Unlocking human potential
The hiring, maintenance, and nurturing of the best performing talent is integral to overall business productivity. An HR analytics strategy should be designed to cut through the clutter and offer key insights into an employee’s work records, satisfaction levels, output, and involvement with a project or target.
As a result, the most deserving employees are rewarded and recognized, engagement is optimum, and individuals are empowered to bring out their best and improve contribution to a company’s core objectives.
“Consider the following story,” said Dr Steven Hunt, SVP of Human Capital Management Research at SAP SuccessFactors, in a conversation with HR Technologist. “Following a financial downturn, a large company had to rapidly reduce total workforce costs. Senior leaders were given spreadsheets showing salary and headcount for different departments.
They identified a team working on a new but non-critical product that had relatively high workforce costs. But the leaders never looked at data showing the capabilities of the people on the team.
Shortly after letting the team go, the company discovered it had eliminated several highly skilled engineers. A few months later the company had to re-hire these employees as consultants at rates far greater than what they were paid as full-time employees. And their sense of company commitment had been lost.
These leaders were smart people who made a confident decision based on accurate data interpreted the wrong way. What they lacked was additional data needed to fully understand the context of their decision and its impact, both positive and negative.
Part of the art of using HR data is presenting it in a way that leads people to draw appropriate insights and conclusions. This is about providing data in the right context coupled with effective analytical interpretation.” Click here to read Hunt’s 4 stories of an HR analytics strategy being used to bolster employer performance, the right way.
Let’s now look at an example of how a high-performing employer’s HR analytics strategy is making a difference:
Xerox’s 150 US-based customer and contact call centers employ around 45,000 workers.
Till 2010, they were utilizing traditional methods for their hiring decisions. However, after having moved to an online evaluation model, driving by cognitive skills measurement, personality testing, and situation simulation, the hiring process has been significantly transformed.
The HR analytics strategy changed hiring quality, reducing attrition by 20% and making promotions easier to determine. While in-person interviews continue to happen, Xerox continues to put greater emphasis on tests & analytics.
In a scenario where data is a true change agent, an HR analytics strategy could completely change how you hire, the way employees are acknowledged, how value & productivity is assessed, and finally, make outputs and profitability more streamlined. All that’s required is its practical and individualized application.
Also read: How to Get Started with Implementing HR Analytics