HR Analytics

Putting data to work


To make smarter decisions about human capital and organizational investments, HR and business executives are turning to analytics to reveal fresh insights about their workforce.

While HR data has become increasingly accessible in the last few decades, the analytics movement is relatively new. With proper systems and structures, companies find that analytics can improve decisions in all areas of HR—for instance, staffing, training, compensation, retention and engagement—but also positively impact the bottom line.

“Today’s organizations expect HR professionals to make greater use of data and analytics to guide their recommendations and decisions,” says John Hausknecht, associate professor of Human Resource Studies at Cornell University’s ILR School and co-faculty director of ILR Executive Education.

HR analytics frequently refers to applying statistical and analytical techniques to workforce data. At a fundamental level, HR analytics helps companies understand their workforce. When properly structured and resourced, HR departments can leverage analytics to better manage talent, improve operations and create a competitive advantage.

According to Hausknecht, there are three popular applications of HR analytics today:

  • Workforce Planning – Analyzing current organizational talent and future needs, anticipating employee exits and optimizing staffing levels for the future.
  • Attrition and Retention – Building predictive models that help forecast costly employee turnover, as well as correlate turnover rates with operational and financial performance.
  • Recruitment and Selection – Examining the value of pre-hire data and analyzing recruitment channels to identify the best sources of new recruits.

“Where do companies seem to be heading?” asks Hausknecht.

“The systems are getting better, and companies are finding greater ways to link data across sources, making it easier to answer questions about how talent relates to the business.”

“Companies are hiring analytical talent within HR to increase the sophistication of data collection and analysis,” he says. “Talent data can now be reported in tandem with business data to show how workforce characteristics contribute to the overall success of the organization.”

A natural extension to the recurring narrative of HR playing a more strategic role in the organization, HR analytics is now seen as a gateway to connect with business leaders who are already comfortable with data-driven decision making.

“Using analytics to understand how changes in HR policies or practices affect business performance moves the conversation beyond feeling or intuition,” Hausknecht says, revealing that the need for such data-driven information will only grow as business leaders see its value over time.

The data is there in most cases, but unless HR professionals have the training to use it correctly, critical insights could be missed.

“At the end of the day, analytics can’t be done solely by computers or machines,” said Hausknecht. “There will always be a role for asking the right questions, determining what the right data points are, and drawing sensible conclusions from the findings.”

“I don’t think the technology, while certainly helpful, is ever going to replace the human element that HR professionals bring to the conversation.”

hr and business analytics

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