- October 11, 2021
- Posted by: Trust Bill Atorudibo
- Categories: Business Development, HR News, HR Tech
As more African industries continue to experience digital transformation across various sectors, the role of the HR Manager and its dependence on HR analytics in a company structure is also evolving. Asides the usual transactional tasks and workforce management, HR professionals are now required to fulfill more strategic responsibilities.
With so much data available to HR teams and professionals, creating valuable insights to inform key business decisions has become a vital HR skill.
From building a solid foundation to interpreting the relevant data, understanding the benefits of HR analytics is crucial to the success of your business.
As new opportunities spring up daily in Africa, developing an effective methodology from HR analytics will ensure you stay ahead of the competition.
What is HR Analytics?
It is important for present day HR professionals to understand the essence of HR analytics and how it can greatly enhance business performance.
Basically, HR analytics is a way to have a better understanding of how investments in human capital assets assist in the achievement of four main goals:
(a) producing income,
(b) lowering expenditures,
(c) managing risks, and
(d) meeting strategic objectives.
To achieve these goals, customized methods are usually developed from analyzing operational, financial and workforce data.
Why HR Analytics Is Important?
The HR Innovation Research Report for 2020 indicates that in the next 10 years, up to 50 percent of organizations will rely on HR technology for daily recommendations and workforce insights based on AI and machine learning. Yet somehow, many companies still struggle to make informed business decisions using data analytics.
According to the results of PwC’s most recent CEO Survey, there has been a ten-year “information gap” between what data CEOs want and what they actually receive from HR data.
Due to this inconsistency, business leaders often shy away from making decisions based on data from their HR functions.
However, as more companies around Africa continue to utilize business analytics to effectively facilitate strategic decision-making, more businesses are beginning to understand how crucial a data-driven culture is to achieving long-term success.
Today’s workplace has made it relatively easy for HR teams to have access to an unlimited amount of data. Yet most organizations in Africa tend to ignore HR analytics when it is time to make in-house decisions.
The result of this ignorance in the long run is felt in various forms. From fluctuating levels of employee engagement to differences in workforce productivity, the impact is usually costly to the overall business growth.
So How can HR teams use HR analytics to Transform the Workplace?
Whether you’re a HR professional with good experience in the bag or you’re thinking about beginning your HR journey, these 6 easy steps will serve as invaluable guidelines for a solid analytics foundation.
1. Gather, Sort & Segment
The first step to navigating HR analytics is to understand how important quality data is to achieving long-term business success. Then you’ll be able to patiently spend time collecting and sorting all the necessary data.
It is important to note that the data collection process is the most important part of developing HR analytics and therefore, must be done very carefully.
Ideally, a central data source should be used to combine all the available data for easy access. However, if it isn’t possible to use one data source, then a streamlined process should be developed for easy access to any piece of data.
Ensuring your data segmentation process is clear and seamless is really important to ensure you avoid having large chunks of inaccurate data.
So relax, take your time to sort your data and ensure you lay a solid foundation for the strategic long-term success these analytics provide.
2. Identify & Track The Right Metrics
The concept of identifying the right metrics to track is one that is unique to every business and organization. HR experts advise selecting three or four key metrics to track.
These metrics should be highly significant to your business goals. Hence, proper analysis should reveal focus areas and stimulate better decision making based on the numbers.
While most HR duties are generally similar in every organization, – such as recruitment, retention, and employee engagement – results of HR analytics are completely different and should be carefully implemented in line with the company’s business strategy.
Identifying and monitoring the right metrics is very important because it helps to forestall future problems that might have otherwise been neglected.
This helps HR teams make more informed analysis and increases the rate at which CEOs consult HR analytics in making key decisions.
3. Use Visualization Tools As Much As Possible
The current digital landscape has made it easier to not just track data, but to also accurately interpret them. While a HR professional might find it easy to scan and understand multiple data charts, the key decision makers may find it difficult to understand and engage without proper visualization.
Several HR management tools can help you build the right visuals for your metrics, making it easier and faster for the executives to make informed decisions.
Although some HR tools track data across a given period of time, it is advisable to adopt a visual tool capable of providing real time insights. This makes it easier to track data on-the-go as well as making effective decisions.
4. Provide Clear Data Interpretations
In order to ensure that no piece of information gets lost in transit, it’s important for the leaders within a business to be properly briefed about what the different HR metrics represent.
This makes it easier to generate meaningful insights and drive proactive decision making.
If you prefer to outsource your organization’s HR responsibilities, it’s advisable to inform them on any preferred visual representation preferences you have to ensure you get good value for your data.
5. Propose Practical Solutions To Real Challenges
While gathering and manipulating data is important, there’s really no point if it isn’t geared towards solving any particular problem. After analyzing your data, the results should be practicalized.
An easy way is to identify a current pain point that your data analytics can solve and provide a meaningful solution.
The more success you gain, the easier it becomes to engage and convince your executives about the benefits of HR analytics.
Furthermore, effective analytics will increase awareness and help more businesses tilt further towards a data-driven culture.
6. Compare, Contrast And Refine
The final step is crucial. You must recognize that developing HR analytics tools and capabilities is not a one-time job. Because your company is alive and breathing, your metrics and other HR tools must develop and change alongside it.
A one-time initiative may yield some advantages in the short term, but the efforts will become obsolete in the medium to long term.
Build in mechanisms to continually gather, modify, evaluate feedback, and stay realistic to ensure long-term success.
As more businesses continue to adopt HR analytics as a yardstick in making key business decisions, those who fail to build a solid foundation may feel the consequence down the line.
But you can avoid making short sighted business decisions due to inaccurate data when you follow the step-by-step process explained in this article.
If you’re itching to scale your business and stay ahead of the pack with better analytics and insight, then reach out to us for better HR solutions. We’ll help you scale your business and even upskill your workforce to improve their productivity levels.