3.9 What is HR analytics?

While the HR Information System (HRIS) is responsible for collecting and organizing HR data, HR analytics is analyzing this data to improve an organization’s workforce performance. The process can also be referred to as talent, people, or workforce analytics.

HR analytics: HR analytics deals explicitly with the metrics of the HR function, such as time to hire, training expense per employee, and time until promotion. All these metrics are managed exclusively by HR for HR use.

Data is at the base of HR analytics. The wealth of data available to HR managers has increased exponentially in the past few years. As a result of high-performance HRIS and new technology such as employee tracking, HR managers now have a great deal of information at their disposal. Here is a list of the types of data that are commonly collected in organizations:

Offer acceptance rate: The number of accepted formal job offers (not verbal) divided by the total number of job offers in a certain period. A higher rate (i.e. above 85%) indicates a good ratio. If it is lower, data can be used to redefine the company’s talent acquisition strategy.

Involuntary turnover rate: When an employee is terminated, it is termed “involuntary.” The rate is calculated by dividing the number of employees who left involuntarily by the total number of employees in the organization. This metric can be tied back to the recruitment strategy and used to develop a plan to improve the quality of hires, which may reduce involuntary turnover.

Time to fill: The number of days between advertising a job opening and hiring someone to fill that position. By measuring the time to fill, recruiters can alter their recruitment strategy to identify areas where the most time is spent.

Time to hire: The number of days between approaching a candidate and the candidate’s acceptance of the job offer. Like time to fill, data-driven analysis of time to hire can benefit recruiters and help them improve the candidate experience to reduce this time.

Analytics and the Law

The sort of data collection that HR analytics uses is governed heavily by compliance laws. Some legal considerations to keep in mind when implementing an HR analytics solution are:

1. Employee privacy and anonymity
2. Consent from employees about the amount and type of data being collected
3. Establishing the goal of data collection and informing employees accordingly
4. IT security when using third-party software to run HR analytics
5. Location of the HR analytics vendor – with whom the data will be stored – and their compliance with local laws.

Recruitment and Selection and Legislation

The society in which we live is constantly evolving. As the values we share collectively change, so do the rules and regulations. As the legal environment of HRM changes, the HR professional must always be aware of these changes and communicate them to the organization and its employees.

“2.8 HR Analytics” from Human Resources Management – 3rd Edition by Debra Patterson is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License, except where otherwise noted.—Modifications: Edited down to Recruitment & Selection specific elements.