HR Analytics for the right business decisions

As human resources professionals, we are accustomed to remarks such as: "I did not select this CV because it did not convince me / it does not have the" vibe I am looking for" or "We do not increase the salary by 30%, we better recruit someone else on the current salary…". In our daily routine, these kinds of statements intrigue us, sometimes irritate us, because we can't offer clear arguments when someone else is guided by instinct.

Human resources management, long assimilated to personnel management, has been constantly changing, moving from a management based on intuitions and feelings, to a much more analytical management, based on figures, data and statistical methods.

Even though indicators such as retention, fluctuation, absenteeism, etc. are reported in the field of Human Resources, analysts have identified a gap between these indicators and the analysis of their significance for organizational performance. For example, we know that employee involvement increases performance, but intuitively we cannot estimate how or how much this performance increases in our organization. These two questions: “how and how much” can only be answered by analyzing data on ‘employee involvement’. The analysis of HR data involves the use of statistical methods in order to make correct decisions or to make certain predictions. Using the example above, through statistical analysis of data in HR, we can identify that a store's profit increases by about 10% following a 0.1% increase in employee involvement.

The systematic analysis of HR data must be based on a business problem - such as, for example - increased turnover among employees with 1 year of experience in the company, the small number of senior experts in the company or increased absenteeism in X department. The link between various indicators such as retention, longevity in the company or recruitment efficiency offers the possibility to understand the difficult situations that the organization faces and naturally leads to decisions made based on objective reality reflected in figures.

The performance of HR processes is given by specific results for the organization, results that must be analyzed and interpreted by scientific methods, otherwise the impact and added value brought by the activity of the HR department will remain at the level of intuitive interpretations of the decision makers.