In the human resources field, decision-making is changing. Once guided by instinct and intuition, modern human resources specialists utilize data and algorithms to drive business solutions. According to Entrepreneur, a 2015 report by Deloitte found that 35 percent of surveyed companies said they were actively developing data analysis capabilities for HR. In today’s data-driven world, HR analytics are helping to guide talent, management, and hiring decisions for organizations of all sizes and in all industries. Many organizations use metrics in HR to influence how they recruit, retain, and compensate employees. This is beneficial because it allows companies to capture and analyze data that can “both increase revenues by better understanding and more accurately targeting customers and cut costs through improved business processes,” according to Startup Focus, a global program at the forefront of the big data and analytics space.
At a time when the old ways of running HR are no longer enough to keep pace with competition and new technology, the field is at a crossroads. As Fast Company says, “It’s now moving from transaction to interaction,” meaning that technology is changing the way HR relates to both employees and stakeholders. Though the use of analytics is far from new, more and more organizations have realized in the past two years that data can improve both HR functions and business processes as a whole.
HR plays an important role in business outcomes, and utilizing data provides a key advantage in terms of decision-making. As Deloitte’s Global Human Capital Trends 2016 report notes, “77 percent of executives now rate people analytics as a key priority … In response, companies are building people analytics teams, rapidly replacing legacy systems, and combining separate analytics groups within HR into one strategic function.” The same report found that 44 percent of surveyed companies use workforce data to predict business performance.
Though analytics won’t solve every HR challenge, they can provide an understanding of business functions and help trained HR professionals develop plans that “[optimize] talent investments while effectively monitoring recruiting, development, engagement, productivity, accountability, retention and many other workplace initiatives,” according to leading workplace intelligence expert Visier.