Advanced-HR-Analytics5

Advanced HR Analytics

By HR Advisory, 3EA
Advanced HR Analytics

Today when companies around the world are only customer and employee centric, 'Human Capital' has emerged as the most crucial factor in impacting an organisation's profitability. There has been a paradigm shift from traditional recruitments to 'Strategic Talent Management'; and this shift has been driving the move towards HR analytics.

In today's hyper-competitive marketplace successful organisations need to be able to move fast and adapt quickly changes in their organisations. Analytics in Human Resources means the extensive use of data and quantitative analysis to help predict behaviour.

Following are some applications of what can be achieved with Advanced and predictive analytics in HR :

  1. Segmentation of employees to identify patterns in employment and key performance indicators: Segmentation of employees based on selected KPIs e.g. skills, experience, sales performance, probability of leaving, etc.

  2. Strategic Recruitments and Retention: Involves attrition and recruitment planning based on predicted future resourcing requirements. This includes demand forecasting based on industry trends.

  3. Screening of New Resources: Optimum screening of CVs and social media with the use of advanced text mining tools leads to a lot of automation in reporting relevant results and saving thousands of man hours otherwise needed to determine ideal 'fit' for the job role.

  4. Risk Management: Predictive HR Analytics help in identifying potential risks posed to an organisation through the behaviour of employee/s. Outlying behaviour can be identified using the technique of cluster analysis.

  5. Gauging Employee Engagement: Data mining can be used to detect the level of engagement towards the organisation.

Following are the key HR metrics that are being widely used in application by organisations globally:

1. Absence Rate: Unscheduled Absence Rate is a key HR Metric to gauge non-attendance. It tracks the level of employees who are absent during a particular time frame. This metrics additionally gives a benchmark after some time.

2.Employee Productivity Index: Depending on the industry and nature of work, companies are allowing employees flexible timings and customised schedules , and work hours are not limited to traditional 9 - 5 jobs. Consequently, measuring an employee's' productivity can no more be merely dependent on the employee showing up regularly. In this age, achievement of KRA is a critical success factor, and more important than how many hours an employee works in a day. a widely used HR metric, a 'productivity index' can analyse this.

3.Per Employee expenditure on Training: This is a commonly used metric in organisations that spend on Learning & Development activities. Training are often associated with high costs and it becomes necessary to assess the per employee cost incurred by company for same. This metric aids in tracking training related costs and further aids their team to make better training decisions. Additionally, the 'Training Effectiveness Index' measures the returns on investment for a company investing in various trainings and the yield or effectiveness that is realised for same.

4.Employee Satisfaction Index: Employee satisfaction also casually referred to as 'Employee happiness' is considered as an important application of HR Analytics and a valuable HR metric. Research has proven that satisfied/happy employees are more productive and engaged in their organisations. Adversely, low employee satisfaction measures reflect a disengagement and low productivity.

5.Rate of Retention per Manager: this is an important metric to identify ineffective people/team managers. A team manager is expected to be a binding force of the team and lead the team together towards achieving team goals. A low retention rate per manager reflects inadequate people skills and assessing the same, HR managers can offer relevant training and development exercise to such resources in order to make them better at their respective role.

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Article by: HR Advisory, 3EA