HR Analytics – Challenges and Chances

Challenges are a part and parcel of life, be it personal or professional. So, as mentioned in the previous blog, this article will focus on HR Analytics challenges and chance it provides for improvement by proper application. To revise our understanding from the previous blog, HR Analytics plays an important part in providing insight and helping achieve the best practices in organisations. It’s ability to inform a variety of decisions can be leveraged to make the most of the talent pool you already have.

Expanding on our understanding of metrics in HR analytics, it is important that we understand their significance in making people decisions. Business performance can be boosted using HR Analytics when proper metrics are applied to relevant and reliable data.

With that in mind, let’s discuss some of the key areas and challenges where HR can be of significant help.

Challenges in recruitment and how HR solves them

Recruitment

A crucial part of recruitment is to find the ideal candidate. With data analytics one can collect and correlate relevant data based on your company’s requirement. Matching candidates that possess the qualities you are looking for is sure to get you an employee that can be retained for a longer time and assures you the quality of work you desire. Identifying the common factors that retain the employees can help boost retention rates too.

Health and Safety Hazards

HR Analytics can help shape better policies and procedures related to health and safety issues. We collect the data regarding hazardous practices, roles, job locations and generate other related factors, correlated and combined insights to make more informed decisions.

Retaining Employees

When you know what is making your employees leave your firm, you can plan for better engagement. HR Analytics helps you to do just that. Collecting information during exit interviews, tracking overall employee engagement, conducting spontaneous surveys etc. act as the data points for generating insights using analytics.

Talent Gaps

When you have many different departments working in the same organisation, there will be competition in performance. While all teams are essential for the effective functioning of an organisation, some departments might be outperforming the others. Data can help you segregate talent gaps in such situations and analysing this data will give insights around which steps can be taken to ensure the gap is dealt with.

Challenges in establishing HR Analytics

When you look at implementing HR analytics in an organisation, there are bound to be some hiccups along the way. While HR Analytics can help you sort out problems using a data driven approach which will benefit you in the long-run, these are the main concerns when it comes to establishing HR Analytics within an organisation.

Overflow of Data

When you start collecting data at a rapid rate, blindly, you are bound to have a flood of data. It will end up flowing in as a mix of all kinds of data, without proper filters. Appropriate usage of  collected data becomes hard when it is not coherent.

You cannot expect better results just because you have a lot of data, unless you have the right analytics performed it is hard to generate proper insights. You don’t want to end up with bloated data leading to bloated results.

Defining and categorising the right analytics to be applied on the collected data becomes crucial once you are collecting the relevant data in required amounts.

Quality of Collected Data

When collecting data, one should be careful as to keep both data quality and quantity. A data deluge can lead to accelerated collection of bad data that will make it hard to correlate between different data sets.

Data integrity and security needs to be ensured to guarantee data quality. In many organisations, a common problem faced by HR Analytics is the inconsistency in generation of departmental data.

There are chances that data is missing, ignored, lost or dropped certain data sets resulting in inadequate analysis.

Lack of Analytical knowledge in HR Departments

Finding an HR leader that is as knowledgeable about data analytics as he is about HR functions is quite hard. For HR Analytics to succeed, the team needs to possess both  HR and data analytics knowledge.

While it is still hard to find such professionals that have an understanding of both these fields, a more alarming fact is that only 6% of HR teams are confident about using their data analytics skills. Also, there are only 20% of HR employees that feel that the data collected in their organisations is credible and reliable enough.

Executive Support Lacking for HR analytics

Since HR Analytics has not been accepted as a mainstream process yet, it becomes imperative that the executives are onboard for its application in any organisation. With executive support, we can expect a better implementation of  HR analytics in any organisation. However, we have to show them the importance of initial investment by highlighting the immense ROI.

High cost of Implementation with no visible ROI

Remaining practical and addressing the bottomline, cost becomes a big factor in implementation of HR Analytics. The cost of implementation for HRA tools is high, and varies over a vast margin owing to availability of tools.

Staff training also comes at a cost to learn to apply analytics whether it is by hiring new employees or training the existing staff. The fact that ROI is mostly not visible as the affects of HR Analytics takes years to show significant changes makes it hard for executives to agree to invest.

Steps involved in implementing HR Analytics to combat challenges

Step 1

Know your business problems. HR Analytics can be highly effective when you know what data to collect and control how you apply data analytics to solve the problem.

Step 2

Use the data that you have collected by answering the problems you have previously identified. This will ensure your HR department has all the required analytics to form insights that will increase productivity.

Step 3

ETL: Extraction, Transformation and Loading. When the IT and HR departments work closely, they produce more accurate results. Use tools for rapid ETL that you are most comfortable with. While non-technical employees can use these, IT professionals will really gain an edge for collecting data.

Step 4

Business Operations drive through data analytics to ensure maximum productivity. Change up things that are not working for your organisation, engage employees and improve the productivity of your organisation. You can achieve cost-efficiency by developing on insights gained through processing business data.

Step 5

Perform regular analysis in order to obtain consistent results. Untimely analysis will generate insights that are inaccurate and will lead to lower ROI. In order to enjoy the benefits of the process, ensure that you will follow a proper schedule as to when you conduct analysis.

Conclusion

Any organisation that implements HR analytics in the right manner as an essential part of their data management can expect positive results. Organisations need to understand that HR Analytics is not an instant fix to their problems. It takes time and skill to implement it effectively.

The real power of HR analytics is not the generation of insights. It is how those insights will drive the decision making process. HR Analytics has far greater contribution than only in the HR department, it has an organisation-wide effect.

For more on challenges in HR and how people management tools solve them, please visit peopleHum

Also, read our previous blog on HR analytics

Blog Cover Photo by Glenn Carstens-Peters on Unsplash