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The power of HR Analytics in optimizing your strategic, tactical and operational decision

What is HR analytics and its Need

Analytics has been transforming every aspect of business and is driving informed business decisions and strategies. Useful, accurate information accessible in a timely fashion allows the decision makers to effectively measure progress against strategic goals, as well as to pinpoint discrepancies and improve their processes.

HR analytics is about applying the data mining and analytics techniques to human resources data which will help to better align your workforce with business initiatives. It is not only a mechanism to monitor/track the HR processes , ensure they are being followed, but to make sure they are creating the right impact and are helping achieve the business goals.

What are the problems that Analytics can solve

HR executives have a myriad of problems to solve

  • Do I have the right talent? Where do I find it? Do I have all the talent I need in the near future?
  • Spending too much on the “training and development”, Is it adding to my business value?
  • Who are at the risk of leaving? Do I have a plan to retain the ones I don’t want to lose?
  • Am I promoting the right talent?
  • Is my workforce diverse?
  • Was my new HR initiative “Women at Workplace” successfully adopted?
  • How can we extract high-employee value?

And many more

HR Analytics can give you the answers, it can give you what you require to formulate effective HR initiatives, track/monitor them, measure their impact and solve your problems.

HR Analytics can help in all critical HR processes that directly align to business goals – Talent management, Recruitment, Performance management, workforce planning, leadership management, controlling attrition and retention planning, skills management, succession planning, risk management, employee engagement, employee career management, HR Strategy and HR Planning to name a few.

In order to derive the information that can help decision making in these areas, HR analytics can dig through the data collected in the day-to-day Operational HR processes – Employee Payroll, Time management (Overtime, shift planning), Training and Development, Timesheets management, Attendance and Leave, Compensation and benefits, rewards and recognition, travel management, background checks, on-boarding / off-boarding, employee surveys, grievance management and others.

For instance, in order to do succession planning, HR can use information like “how many critical positions are at risk?”, “Do I have talent to replace?”, “Can I move any of my existing resources into these roles?”, “Do I need to give them any training? What will be the associated cost?”, “Do I need to hire? What will be the hiring cost?”, “Where will I find the right candidates?”

In order for these questions to be answered, data needs to be analyzed from different HR processes, skills data, training and development data, performance history, positions held by employees to find employees who have held matching positions in the past, recruitment data to understand available external resources and cost of hiring.

What sources of HR data can be analyzed

Next to a talented human capital, one of the most valuable assets in the organization is their wealth of information. Data is collected across all HR processes, right from the employee on-boarding to off-boarding. Organizations may be big or small, employee records are maintained, data is collected – skills data, performance data, compensation-benefits data, surveys, reviews, organizational movements, promotions, diversity and what not. It may be stored in multiple formats across many platforms / applications from simple excel sheets to HRMS or ERP tools to data warehouses. It may be in unstructured formats like emails, chats. That data, when properly assembled and analyzed, can reveal important insights that affect and guide business strategies.

What analytics will generate

What does “HR Analytics” generate? Is it more than reporting your KPIs or metrics?  It definitely is.

The common HR dashboards, reports and scorecards only show you the metrics or common HR KPIs. They show if you have filled all the positions in your organizations on time? What was the “Time to Fill” or the “Cost per hire”. But is this enough? That does not tell you why did it take so much time to fill those positions? Is the cost incurred in hiring justified? Did the talent that you hired generate the revenue they are supposed to?

HR analytics can tell you the complete story around your data.

This is what you can expect HR analytics to do for you –

  • Co-relations – Drawing co-relations between the HR data and the business data is important. Example, HR analytics can help you tie the “Increased Sales” in Quarter2 to the 20 new sales people you hired in Quarter1 and then refine the list to 12 resources which were hired from a particular Business school. You can also co-relate the fact that training costs you probably incurred on these resources was much lower than the others.
  • Spot the Trends – HR analytics will dig deeper in your data to give you trends in your data. For example, the positions that have taken longer to fill in the last 2 years are also the ones with highest attrition. This raises an alarm for attention if those positions are critical and requirements for those skills are expected in the near future.
  • Predictions – It will use the trends and other co-related data to make predictions. Which of my talented resources are going to leave? How much attrition do I expect?
  • What If analysis – HR analytics will also help you build what-if scenarios to help you plan better. HR analytics help you spot your problems and then measure the effect of various factors on the same. It will answer your What-If questions. Example, What If I increase my hiring staff by 5% in next year? What if I increase my bench strength by 10% in coming year?

Typical Usage of HR Analytics

A typical HR process lifecycle looks like the below.

planning-implementation

HR analytics tool can help at every stage by providing the right data and right tools for the task. It will help you in designing and implementing effective processes.

HR processes / initiatives that are launched across the organizations are designed such that they compliment the business goals or help achieve the required business results. For example, introduction of a new Performance appraisal process ensures that right talent in promoted and retained which will lead to increased employee productivity.

In order to design such processes or determine the need for such initiatives, HR executives need to look at the KPIs showing the current state of things and understand the various factors affecting these KPIs or causing the problems being faced. It is also essential to look at the trends in historical data, cause-effect analysis of past initiatives / decisions and also put up different What-IF use cases to arrive at any decisions.  It can also help in forecasting and make predictions that might help in decision making.

Analytics can also play important role in monitoring and control of the HR processes, by providing reports or dashboards that show if the processes are being followed efficiently. It will help monitor any gaps and also analyze reasons causing the processes to fail.

HR analytics can also help you analyze the impact of your HR processes and co-relate it with you business results. It will also help you re-align your process with the changing business goals, keeping them always up-to-date and also eliminate processes that are no longer effective or are redundant.

Sample dashboard & its story

dashboard6-04

 “Workforce Diversity” is one of the key HR goals and often the core value of many organizations. HR initiatives are launched to ensure that the workforce is diverse and inclusive in various aspects of race, gender, ethnic group, age, personality, cognitive style, tenure, organizational function, education, background and more.

This dashboard talks specifically about the Gender diversity in an organization, especially about representation of Women at all levels/areas in the workforce. The organization has set certain goals in this respect and the dashboard gives the picture of where they have reached so far and pin points the areas / factors which require attention.

Diversity Goals for the Organization:

  • Increase Female Ratio in total workforce (Achieve 20% female ratio by 2018)
  • Increase Female representation in Leadership(Management Roles / Higher in job hierarchy) (Achieve 17% female ratio in leadership by 2018)
  • Increase Female population in technical job roles (Achieve 20% by 2018)

This dashboard can be used by HR Coordinators / HR Leaders at various levels in the organization to monitor and control their efforts in achieving these “Diversity Goals” and also measure/analyze the impact of any HR initiatives that they might have designed to drive their Diversity program.

The dashboard has global parameters for selecting the Organization (Any Level in the organizational hierarchy) and the year. These parameters will help HRs at various levels to view the values as per their scope and also implement data security as each HR user will only be able to view the dashboard as per their scope. E.g. For the top management, it will show the global view whereas for regional HRs it will show the data for their regions only.

The dashboard has 3 sections, each providing the current picture and related factors / information for each of the above stated goals.

Goal 1: Increase Female Ratio in Total Workforce (Achieve 20% female ratio by 2018)

goal1

These set of panels give you an overall view of the Gender diversity in the workforce and also distribution of the female workforce and its movement.

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goal12

This first panel gives the current organizational headcount values. The next panel gives the female ratio in the workforce and also how it stands compared to the previous year.

We seem to be doing well on the overall Gender diversity in the Workforce given that we are just 3% short of our goal for 2018 and the change with respect to 2015 is 3% which presents a very positive picture.

Female Ratio by Region / Departments

The purpose of these panels is to show the consistency of workforce diversity across different regions and across various departments.

It shows the distribution of total headcount by Regions / departments and a heat map of the ratio of Female population in the headcount. The Size of the block indicates the total headcount of the Region/Department. The Heat map highlights regions / departments with lower female ratio in darker shades.

Female Ratio by Regions

goal13

The above distribution clearly shows –

The Female ratio in the regions of “Australia” (9%) and “Middle East and Africa” (8%) are significantly lower than the organizational average ratio of 17%

Female Ratio by Departments

goal14

The above distribution clearly shows –

The Female ratio in “Manufacturing” (~9%) and “R&D / New Technologies” (8%) are significantly lower than the organizational average ratio of 17%

The “Business Development & Sales” and “General& Administration” departments are the major contributors to the female HC.

Though “Manufacturing” might have limited roles that suit or attract female employees, efforts need to be increased in “R&D / New Technologies” to increase female contributors.

Head Count Movement

goal15

This panel shows the overall movement of female headcount in the organization. It will give the required insights into whether the organization is able to attract, promote and retain female talent.

The number of new hires and also the net change this year is significantly high which indicates that the environment of the organization seems encouraging towards women. It also shows that the recent HR initiatives related to female recruitment are quite effective.

Trend in Female Head Count Movement / Trend in Female Ratio

goal16

This panel has 2 views that show –

  1. The Trend of female ratio over the last 5 years
  2. The Trend of female Head count movement over the last 5 years

Currently it shows the 2nd view. The Trend shows the hiring rate, turnover rate and promotion rate of the female employees over the last 5 years. This chart shows 2 things:

  1. The policies of hiring and retention or any new initiatives in that area are bearing results.
  • Female hire rate in the last 2 years is very high, ~40% in 2015 and ~50% in 2016.
  • Female promotion rates have gone above 15%.
  • The turnover rate which has gone up since 2014 (18%) is still up. This is an area of concern.
  1. Though due to specialized hiring initiatives for women in the last 2 years, the current hiring rate is very high, this is bound to go down. In the past, there has been a gap in the hiring/promotion rates between male and female population and also the turnover rates differ significantly. This gap needs to be bridged to sustain the diversity that we have achieved.

Goal 2: Increase Female representation in Leadership (Management Roles / Higher in job hierarchy) (Achieve 17% female ratio in leadership by 2018)

goal2

The above set of panels in the dashboard is related to female representation in leadership roles.

goal21

This panel gives the female ratio in leadership and also how it stands compared to the previous year.

Though we seem to be doing well as compared to the previous year (2% change compared to 2015), the overall figures suggest we might be a little off our goals and need additional effort in the area. We currently stand at 12% which is a required change of 5% in the next 2 years to achieve the desired goal.

 

Bandwise Female Head Count Distribution

goal22

The purpose of this panel is again to show the consistency of workforce diversity, in this case, across different organizational Levels or bands. The panel also shows the hires, exits and promotions at various levels which help analyze if there are any particular levels which are facing issues with retention or are not promoting female talent.

Though we see a significant activity in Bands 4/5/6 and lower, the headcount movement in the leadership bands (top 3) is less.

Trend of Female Ratio in Leadership / Trend of Female Head Count Movement in Leadership

goal23

This panel has 2 views that show –

  1. The Trend of female ratio in different levels of leadership over the last 5 years
  2. The Trend of female Head count movement in leadership over the last 5 years (this will show trend of hire rates, turnover rates and promotion rates)

Currently it shows the 1st view.

The above trend shows –

  • There is no female representation at the top leadership level in the organization over the years
  • Though there is female representation at the leadership level 2 since last 3 years, it is significantly low.
  • Female representation at Levels 3 & 4 which had gone low in 2014 has improved but is still off the required mark
  • Female representation in the lower level of management is consistently increasing and these leaders need to be promoted to higher levels.

Goal 3: Increase Female population in technical job roles (Achieve 20% by 2018)

goal3

This section gives the current status and information related to female representation in Technical workforce.

goal31

This panel gives the female ratio in Technical workforce and also how it stands compared to the previous year.

We seem to be doing well overall on this aspect and also as compared to the previous year (3% change compared to 2015). We currently stand at 17% which is a required change of 3% in the next 2 years to achieve the desired goal. This seems to be quite achievable.

Female Headcount Distribution in Technical Job Roles

goal32

This panel shows the distribution of Female Headcount in the different Technical job roles. There might be many Technical job roles in an organization, this chart shows the ones where there is significant female count and groups the rest of the roles as “others”.

This panel shows that there are certain categories of technical job roles that seem to attract female workforce, like “Quality Control”, “Continuous Improvement”, “Production manger”, “Configuration Analyst” etc. This information is useful in identifying job roles or areas where female talent could be promoted.

Trend of Female Ratio in Technical Roles / Trend of Female Head Count Movement in Technical Roles

goal33

This panel has 2 views that show –

  1. The Trend of female ratio ( vs male ratio) in Technical Roles over the last 5 years
  2. The Trend of female Head count movement in Technical Roles over the last 5 years (this will show trend of hire rates, turnover rates and promotion rates)

Currently it shows the 1st view.

The above trend shows that there has been a little variation in the female ratio in technical roles in the past. In last 2 years, this ratio is increasing and this trend needs to be sustained in the coming years as well.

This completes all the sections and panels in this dashboard. Thus all the panels give you a 360deg view of the various factors and data points related to all the 3 diversity goals.

Conclusion

After having discussed about HR analytics in brief and its various use cases along with a sample dashboard, we can say that HR analytics if used effectively can generate significant value by supporting the decision making process with the right data.  As illustrated in the sample dashboard, it can give you insights into the actual organizational data revealing useful information that can be leveraged to achieve the business goals.

HR Analytics is developed and powered by Helical Insight An Open Source Business Intelligence Tool

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