The Benefits of HR Analytics

HR analytics, also known as predictive retention modelling, is the application of analytics processes to an organisation’s human resources department, for use in performing workforce optimisation. The aim is to use the collected data to provide insights to effectively manage employees, so as to help reach the organisational goals efficiently. Doing this requires identifying the data that should be collected, plus how to use said data in order to replicate and predict employee performance. This way the organisation can determine how to receive a greater return on its investment. HR usually already collects the data used—such things as employee's personal information, attrition, performance, and compensation benefits.

Some advantages of using HR analytics include:

Increasing accuracy of hiring decisions - Better decisions can be made based on the historical data used in HR analytics. If the HR analytics tool works effectively, an organisation can decide on the best candidate to hire using the historical data. Mistakes are easily prevented especially with regards to hiring or firing, since recruiters can learn more about candidates through online resume databases, applications, social media profiles and so on, to see if they are a good fit or if they are no longer useful to the organisation.

Improvement in training - HR analytics can provide great information necessary for training. Training is essential in all organisations. Issues with training can lead to various outcomes, for example, an increase in costs. With the data obtained, an organisation can see if employees are taking advantage of the opportunities provided. If not, it is likely time to cut costs and decrease the budget, which saves money, or to find alternative ways to have employees gain interest.

Helping maintain stability in the workforce - One of the main advantages of HR analytics is being able to establish employee retention rate, informing an organisation of reasons why employees leave or stay. There are countless reasons for leaving such as lack of compensation, difficulties with managers and so on. The data also helps to discover possible room for skills development or areas of the organisation in which employees struggle the most. With this information various strategies can be put in place in an effort to retain employees.
The Example of Google

HR analytics play a core role in an organisation’s operations and strategies. They are able to gain a competitive advantage because they can keep their workforce happy by not just collecting data, but by doing something about the collected data. For instance, Google is an organisation that has successfully used, and continues to use, HR analytics. Their mixture of quantitative and qualitative data gives them the opportunity to delve into their organisation’s inner-culture. Using HR analytics has helped Google improve their workplace. For example, in their Leadership case study: project Oxygen, Google utilised their analytics team to determine the difference managers make. They found that many employees including Google’s co-founders are averse to hierarchy.

Everything from managers’ performance ratings and upward feedback from surveys was analysed. The results were compared with productivity metrics, and the outcome was that great managers led to more engaged and productive teams. In order to establish a “great” manager, the employees then created the Oxygen Eight Behaviours for a “good” manager. Some behaviour includes: be a good communicator, empower the team, do not micromanage and have a vision.

Data Analysts

Data needs to be properly analysed. If managers or employees struggle to use the data adequately, it is most likely because they do not understand how to interpret the data. One option would be to either internally or externally hire a data expert. This individual must be able to properly mine and interpret data. Since such a person is not easy to find, many companies have resorted to hiring Big Data analysts or data scientists. Finding someone that can properly interpret data will help to spot noticeable trends that could be improved within the organisation.


All organisation no matter their size, location or goals, would greatly benefit from using HR analytics. They are key to making strategic HR decisions. HR analytics uses real data directly from the organisation, these can be easily applied to help make more accurate decision with regards to worker numbers, training budgets and so on. Therefore, there is no need for estimations and the amount of inaccurate decision may well decrease. Adopting a tool such as HR analytics must be done carefully and precisely. If the correct care is taken and data is properly interpreted, organisations will be more able to identify high-risk employees, and to build profiles of employees that are likely to stay or leave more accurately.

Lucine Bassa

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