HR analytics: the starter guide for HR pros

• Who is this guide for: HR, Recruitment, D&I and Reward professionals trying to get more from their People Data to drive positive change in their workplace.
• What you’ll get from it: this guide aims to demystify the world of data for HR professionals (spoiler: it’s not that bad).

It’s all going faster. Are you keeping up?

Our society is evolving. Fast. And it’s only natural for the average workplace to evolve too.

This constant and ever-accelerating environment is quite a challenge for HR professionals whose responsibilities involve taking care of everything that’s people-related.

HR leaders are currently battling to figure out what the new normal is in the workplace after the world was taken by storm by COVID-19, decrypting what Gen Z wants and needs, while trying to build more diverse and inclusive work environments.

Uncertainty is gaining ground.

We currently live through what we call the Great Paradox; a recession is just around the corner, the Great Resignation is still ragging on, and some companies struggle to hire talent while others need to make some tough redundancy decisions  to stay afloat.

The best or nothing

Workers are increasingly paying more attention to their well-being and work-life balance. They need workplaces where they can be themselves to reach their full potential. This is especially true for Gen Z employees.

As it is becoming a critical selection factor for top all talent out there, organisations need to become more efficient at measuring their HR performance to fix whatever needs improvement.

Now, the amount of data to collect and analyse to see a complete and relevant picture is far too important for humans to be on top of everything. At least, not without the help of technology.

In other words, HR teams need to get comfortable with the world of HR analytics. And they need to do it fast.

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In this comprehensive guide, we’ll walk you through the world of HR analytics, from what it is to why it matters and how to get started with it. 

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What is HR analytics?

Simply put, HR analytics covers the data-led analysis of everything people-related, from reward, to D&I, absences, engagement, or even HR operations. Everything.

Why all organisations should invest in HR analytics

Well, knowledge is everything.

As one collects AND processes information about their people, policies and their overall market, knowledge grants them the superpower of anticipation so that they can always be in the know and always one step ahead of the competition.

Now, analytics involves metrics. But which metrics should you follow to measure your HR performance?

Key indicators to measure HR performance

In application, there are hundreds of metrics you should be able to track to get a complete picture of your HR team’s performance. 

We won’t be listing all of them here. Instead, let’s look at focus areas you can impact by getting your HR analytics game in order.

Employer brand and recruitment 

Time to hire, recruitment costs, recruitment model, overall employer brand awareness, candidate experience, etc. There are lots of indicators you can track to get a clearer view of your recruitment funnel and performance.

Let’s take two simple examples.

Job ad clarity

You publish a job advert and receive 100 applications. After screening candidates, you realise that only 10% are good-fit candidates. It could be that you didn’t publish or advertise your job ad in the right places, or maybe your job ad isn’t quite optimised for your ideal candidate profile.

Candidate experience

You interview ten good-fit candidates, but none accepts to join your organisation. Here again, many metrics can help you understand the reasons for this scenario: too many interviews, failure to show your company culture during the interview process, poor candidate experience, pay that’s under the market average, etc. 

‍Only by measuring key metrics will you be able to identify bottlenecks.

Talent management

An organisation is only as great as its people.

For this reason, it is paramount that HR teams track what their talent needs to keep up with ever-growing targets.

• What skills do you have in-house? Are you missing key skills to help your organisation achieve its targets?
• Can you cover for potential employee churn? Employees don’t stick around as long as they use to a few decades back. Do you have a succession planning … plan? If so, can you measure your succession planning readiness?
• Do you have training programs? Do you need to hire talent to fill gaps? Or would it be more cost-efficient to train your people? More often than not, training is a great idea. It increases your people’s market value as they learn and grow their own skills, and it shows your employees that you value them.

Good to know

With HR Datahub, HR teams can put a number of their Succession Planning readiness, measure the performance of their High Potential Programs, or even compare their Learning & Development (L&D) budgets with competing organisations.

Research says happy employees stay longer and work more efficiently.

Find out what drives your employees and work from it.

A study conducted by Oxford University's Saïd Business School revealed that happy employees are 13% more productive than the average worker.

It also goes without saying that keeping employees happy by meeting or exceeding their needs will also result in them staying around longer, thus reducing operational costs.

Diversity and inclusion

The latest market developments tell us that organisations that are not trying to build safer, fairer, more inclusive and diverse workplaces will soon be in trouble as they see top employees leave.

Top employees don’t complain. They leave.

For this reason, organisations need to invest in developing their company culture and ensure all employees feel included, regardless of their identity.

Don’t be afraid to measure and address the elephant in the room.

It’s factual; there are real inequalities when it comes to occupying leadership positions. Back in October 2021, only 8 of the UK’s top 100 organisations were led by women.

Of course, gender disparities in leadership positions are only the tip of the iceberg, but the example speaks for itself.

By not measuring and comparing objectively, organisations live in denial and contribute to not supporting a needed mindset change – either by choice or by lack of means to measure and compare themselves.

Productivity needs diversity and inclusion.

D&I is now a strategic investment for organisations as not addressing it actually affects performance and revenue. Indeed, research shows that low-performing companies, when it comes to D&I, are 19% more likely to underperform (source: Mckinsey).

Did you know? HR Datahub lets you analyse and benchmark your diversity and inclusion performance with your closest competition. 

[Learn more about our D&I Index]

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In many ways, we could compare well-oiled HR analytics with a thorough detective job.

• Observe a problem
• Collect data
• Analyse data
• Draw conclusions
• Experiment

Now is the time for HR to turn data into actions

Quote us (and challenge us) on that if you will, but we believe that HR is the new cool kid in town, and the time has come to go beyond counting.

If it’s well established that talent and culture are the cornerstones of success for all organisations, HR professionals have been kept out of the board room for far too long, and it does not make sense anymore.

Think about it: 

• What is your organisation made of? Your people.
• Who carries your organisation? Your people.
• Who has the power to make or break your organisation? Your people.

The equation is quite simple: 

Your organisation = your people.

We recently questioned dozens of Diversity and Inclusion and Reward professionals to better understand their current challenges and road blockers.

Here’s what they said: 

• “Lack of dedicated resource”
• “Slow decision-making processes”
• “Senior stakeholders”
• “Sufficient buy-in from the top, to enable action”
• “Lack of awareness and time from leaders”
• “Ingrained behaviour and cultural norms”
• “Getting senior leaders buy-in”
• “Obtaining buy-in from all staff”
• “Getting people to see the relevance or understand the importance”

Can you see a trend? We sure can.

Most referred to slow decision-making from ‘the top’. One of the reasons for this is that senior stakeholders struggle to link HR to revenue. HR analytics is here to help quantify your actions and get rid of outdated views.

Go beyond just counting and spending.

Let’s begin with a comparison.

In the early 2000s, marketers had to fight to prove the effects of their work without having any tangible results to show. Then came solutions like HubSpot allowing, them to understand their actions, tie them to revenue and, therefore, show the value of their work to management. 

This was when marketing teams moved from the cool group organising events and branding pens to having a real seat on the board table.

History repeats itself, and the very same is happening to HR right now.

Up until recently, HR performance was essentially measured based on recruitment, layoff numbers and overall cost of operations.

Well, HR professionals can now use solutions to measure the impact of almost everything they do and tie it to revenue. 

We at HR DataHub, for instance, help D&I and Reward professionals measure and compare their performance based on 150+ key HR metrics.

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This is a game-changer. Essentially, technology is turning HR into your organisation’s most valuable department.

Make data-driven HR decisions (and convince your board)

HR data isn’t just numbers. It tells the story of your organisation. 

Also, data doesn’t lie. It shows trends and helps make the right decisions ahead of the curve.

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Let’s take a concrete example involving pay and reward.

Yes, the Great Resignation taught us that employees are aspiring for more than high-paying jobs. However, pay remains crucial to attract, hire and retain talent.

For instance, at equivalent title, location and seniority, a company offering a higher compensation will likely secure more top talent than their direct competition.

There is only one way to avoid such situations; the knowledge you get from analysing data.

Looking at the average pay data for specific titles and seniority in a given region, you should be able to adapt your future job offers to the market.

To do this, you can either conduct manual research—and potentially spend hours to find and compute relevant data—or use technologies like Pay Tracker Live.

Introducing Pay Tracker Live

Pay Tracker Live analyses job boards and gives you access to live pay data all across the UK. Among other things, it can help HR teams: 

• Find pay data even on the most niche roles to offer the right compensation based on the job title, skills, or experience.
• Notice pay developments for specific roles and anticipate market evolutions before it’s too late.
• Offer the right pay for the right location.
• Retain staff by offering competitive compensation.

Read our Pay Tracker Live blog to learn more.

How to get started with HR analytics?

Let’s make one thing clear; all organisations can do HR analytics. The real challenge is to get started and adopt the right mindset.

Adopt a data-driven mindset

Collecting data for the purpose of collecting data won’t help you achieve anything.

You first need to understand that you need data to make more informed HR decisions to support your people and your organisation’s growth.

From there onwards, you also need to invest in the right technology and build an integrated ecosystem to collect, aggregate and analyse data to make the right calls and implement relevant tactics.

Carefully map your ecosystem

If you’ve worked in HR long enough, you are most definitely aware that some HR systems can be a real pain to work with, may it be due to obsolescence or lack of flexibility to match your internal processes.

Now, the issue is that implementing an HR system can take long months and often represents heavy investments, thus making it difficult to switch from a system to another. In other words, carefully map your HR data ecosystem from day one.

Quick word on GDPR*

*General Data Protection Regulation

Because it fosters transparency, GDPR should help you establish and/or strengthen the trust of your employees towards your organisation.

What’s more, getting employees’ buy-in will get easier with time as they see that you use People data in a safe way to make their work environment safer, more diverse and inclusive. 

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“As we all strive in the HR world to be more data-driven, HR DataHub is a key enabler, allowing access to data and insights to inform decisions across the employee lifecycle.”

— Vicki Farquhar, Assoc. CIPD, Compensation and Benefits Advisor at ProServ

Run relevant benchmarks

A growing number of organisations are prioritising diversity and inclusion topics, and this is a great evolution. A self-improvement journey that begins with collecting and analysing data.

Now, everything is relative, and the best only way to know how well you’re performing is by comparing your performance to your closest and most relevant competition.

To learn more about the topic, you might like to hear what Alexandra Evreinoff (INvolve's Managing Director), David Whitfield (Co-Founder of HR DataHub), and Helen Townend (Technical Director for Diversity and Inclusion at Amey) had to say about what good looks like when it comes to diversity data (find the webinar replay below, no registration required).

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Why data literacy shouldn’t prevent any HR professional from doing HR analytics

We understand that HR Analytics sounds scary. After all, what if you don’t know anything about analytics, to begin with? 

First things first, you won’t be alone on this journey; you should be able to count on your tech team to implement smart and safe HR solutions for you. 

Furthermore, you don’t need to be a data scientist to deal with HR data as long as the tools you use actually speak your language; may it be diversity and inclusion, reward, recruitment, or employee engagement, just to name a few.

Good to know

You don’t need to break the bank to build an efficient HR data ecosystem for your organisation. Solutions such as HR Datahub (wink, wink) can help you aggregate your people data in an easy to use portal.

You know your field and organisation better than anyone else. And you can now count on easy-to-use solutions to measure what matters and turn raw data into actionable insights.

Ready to implement the right HR tactics for your organisation?

You may be sitting on a data goldmine.

Whatever the quantity of information collected (keeping in mind that most organisations still stick to the strict minimum when it comes to collecting people data), there is a gap between data collection and data usage in the world of HR. In fact, many HR teams struggle to exploit their people data, not because they aren’t aware of the opportunities lying ahead, but because they lack the time and the support of their board of directors to act on it.

The good news? 

You can now show the value of your work and get a seat at the table. And that journey begins with entering the world of HR analytics.

We at HR DataHub are all about this. Our mission is to help you evaluate your overall HR performance - with a focus on D&I and Reward - by comparing your organisation to your closest competition using key HR metrics. Join our waitlist to try our solution for free, or book a chat with us to explore the possibilities for your organisation.