HR analytics are the future of the profession

A more grown-up approach to metrics can help prove HR’s value to the organisation, says Dr Alejandro Martin Sposato

It isn’t news that HR analytics are fast becoming a more central part of HR. More data is the modern way of life, and with more information comes a greater need to process it. But I know from my own experience that some HR professionals are number shy: unnecessarily so, since what matters more than being able to crunch the numbers (we have software to do that) is being able to interpret, evaluate and make decisions based on results.

In today’s economy, two different factors are driving value creation: human capital and data. These are both represented in HR analytics. In the knowledge economy, human capital is the most valuable asset organisations have, and because of that there is a growing emphasis on aspects of HR such as talent management and engagement. But the future requires us to move from an amateur management of data to a more professional approach that can improve talent management, engagement and make a visible and quantifiable difference to the bottom line. Because in essence, HR analytics can’t only help us to make better decisions – it also shows how these decisions have had a measurable, demonstrable impact on the organisation.  

Being data-driven ensures that the results HR analytics provide are aligned with the overall strategic goals of the organisation. But that may also mean HR professionals need to update their skills. It’s important they see this as an investment rather than an expense: staying up to date with the latest skills required for the job market ultimately sends a message to potential employers that you care about improvement and development. And every year, more and more HR professionals are acquiring the skills to make the HR function a strategic organisational partner. Soon, analytical capability will be an expectation rather than an option.

Most HR practitioners are familiar with common HR metrics and ratios like employee turnover or absenteeism and also run surveys on issues such as engagement or satisfaction. What HR analytics suggests is that we upgrade these metrics and incorporate big data models and statistical analysis in order to increase accuracy. 

How does this help HR function more effectively? By diagnosing, predicting and prescribing solutions. Take the area of resourcing as an example: deployed correctly, analytics can be used to analyse different scenarios for employee turnover. And knowing accurately what your future turnover might look like can, in turn, aid resource planning. HR analytics looks not only at historical averages but adds new variables such as employee engagement and satisfaction and can turn them into best, worst and most probably scenarios.

In recruitment, analytics has the potential to become the lie detector of tomorrow. Hardly any candidate will ever admit they are dishonest in a job interview, but by cross-checking their answers we can have certainty about their truthfulness. Or by identifying employees at risk of leaving the organisation – based on cross-referencing data from engagement surveys with personal characteristics – we can create an early warning system of those most likely to leave.

Staying up to date with developments such as an analytics is imperative if HR is to stay relevant and join other departments in becoming central to analytics-enabled organisations. HR professionals must be confident enough to stay at the table when analytics are up for discussion, otherwise they miss an important opportunity to add value. 

Dr Alejandro Martin Sposato is senior lecturer in HRM at Middlesex University Dubai