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HR Analytics In 2015

How are HR analytics changing the work environment?

23Jun

As technology enables increased automation, staff are being required to spend less time on basic tasks and more time adding value. Talent has never been more vital to a company’s success than it is today. Recruiting, retaining, and motivating capable staff is one of the central challenges being faced by organizations, and HR professionals have their work cut out ensuring the right employees are in place.

A data-driven HR department can use analytics to do a number of things, including better understand the drivers of performance and retention, use statistics to make recruitment decisions, and analyze how pay correlates to performance. Perhaps most importantly, predictive analytics applications are helping to establish the factors that impact retention rates, such as salary, distance from the office, and team manager.

HR has proven something of a laggard in its adoption of Big Data as a tool compared to departments like finance. According to a Pulse survey conducted by Harvard Business Review, this is often because HR departments lack the analytics skills necessary to convert the data into anything useful. Many have continued to rely on intuition when finding the best candidates, even as companies around them have seen substantial returns from adopting analytics. Respondents to the survey also said that they were hindered by the quality of data in HR, finding much of it to be incorrect.

Cloud technology, however, has proved a boon to enabling the use of analytics to leverage actionable insights, and optimize the return on investment (ROI) on its human capital.

Most new cloud-based HR systems vendors, such as SAP and Oracle, provide analytics solutions built into their software. Cloud technology can now utilize cognitive capabilities to put the vast amounts of human data gathered into a language HR professionals can understand. It also allows them to link business performance to the productivity of the people under their purview, which was also found by the HBR survey to be a hindrance to its adoption.

The cloud enables analytics to be put in place at a faster rate than before. Paul Rubenstein, leader for talent solutions and strategy at Aon Hewitt, provider of HR consulting, solutions, and outsourcing services, cited the proliferation of cloud-based tools as a key reason that firms expect to move up the workforce analytics maturity curve over the next two years. Rubenstein notes that ‘The technology is vastly different from just a year ago. We used to think this cycle would take three to four years. With cloud-based technology, it should take two to three months to get the tech ready and get the first analytics up and running and then six to nine months to get good at it.’

As the capabilities of HR departments increase, so too does expectations of what they contribute to firms. The cloud will do much of the work with data that they would have had to previously do. Although they will be expected to ensure that the data is all correct, this will allow them to contribute far more to their organization on a strategic level that can add value to the business.

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