HR Analytics: The Key to Maximizing Your Workforce
Your human resources department is sitting on a massive amount of data that can help you make more strategic HR decisions. Bersin by Deloitte Research indicates that in 2016, companies experienced a 120% increase in linking their people data to organizational performance.
Make Better HR Decisions with Data
According to an International Public Management Association for Human Resources (IPMA-HR) survey, nearly 70% of respondents said they collect HR metrics. But, simply gathering all of this data is no longer good enough; to meet corporate goals, you have to actually do something with it. You can no longer wing it and operate on a gut feeling or instinct; your C-suite expects you to come to the table with hard numbers and actionable information.
Workforce analytics help you drive more methodical decision-making throughout the organization. They can help you more easily understand and manage concerns such as:
- The cost of unplanned overtime
- Ways to reduce your labor expense
- Calculating the cost of employee training
- The impact of employee churn on workforce productivity
- Determining teams or locations that have unusually high attrition
Controlling overtime costs can be tough, but it’s a challenge most businesses face. Employee wages make up 70% of a company’s compensation costs, according to the Bureau of Labor Statistics. When you are presented with hard data you can easily analyze how much of your compensation can be attributed to poorly planned overtime – and quickly pinpoint the departments or managers that are the cause. You can then work with your senior leadership and managers to limit overtime when feasible, potentially saving the company a substantial amount of money.
If you feel like your company has a big “EXIT” sign on it, you can use HR data to find out where the issues are and take steps to Identify which areas of the business have the highest turnover rates – and then develop a strategy to stop the bleeding. Employee churn can have devastating impacts on a business and its bottom line. Some of the consequences of a high attrition rate include:
- Increased cost-per-hire
- Reduced employee productivity
- Decreased employee morale
- Increased overtime costs
- Poor brand reputation in the marketplace
Recruiting and Hiring Data
HR data is probably most important in the hiring process to help ensure you select the right employee for the job. Having a grasp on certain metrics can also help streamline the recruiting process and make it more efficient and effective. But, you need to dive deeper than just maintaining a spreadsheet to show how many resumes you’ve read through or how many telephone or face-to-face interviews the recruiting and hiring teams have conducted.
Offer Acceptance Rate Following the rate of job acceptances over time can help you determine the overall effectiveness of your company’s talent acquisition strategy. If your recruiting conversion rate is low or on a downward trend, you can take a hard look at salaries and benefits to make sure they track with those of your competition and your market.
Candidate Sourcing This important metric helps you make decisions about your recruiting strategy and will support other data points. The measurement will help you determine where you should focus your recruitment budget. For example, you can analyze where your recruiters have the most success sourcing candidates: Is it job fairs, on-campus recruiting, job boards, something else? You can also use it to determine how much time recruiters are spending on hiring resources, such as events, and to help determine recruiter performance.
Average Time to Fill Positions This metric is all about tracking how quickly (or slowly) applicants move through the hiring process once they’ve been recruited or have applied to a position. Time-to-fill calculates the number of days an available position remains open. It can also provide information about the amount of time it takes a recruiter to contact a candidate after one is identified, as well as how long it takes to schedule interviews.
Current Candidate Pipeline Understanding where a candidate is in the hiring process, as well as how many applicants are in each stage, is another good metric to have. This metric can provide insight into: The number of candidates you currently have in the interview phase; the number of outstanding offers; candidates who have accepted offers.
Reasons for Non-Selection Maintaining a record of reasons for a candidate not being hired is important as well. Some reasons to include: Failed to meet qualifications (e.g., education or experience, poor references, failed drug test or background screen); candidate didn’t interview well; another candidate was a better fit; candidate declined the offer. While having this information isn’t a requirement, keeping track of it can help with EEOC compliance in the event of a discrimination lawsuit.
Using predictive analytics can help you pinpoint characteristics and patterns that make up good or bad performance on an individual or team basis. Performance analytics give real-time information to help you make timely decisions. You can quickly recognize performance red flags and predict which employees are in the top flight risk group. You can then implement tailor-made retention programs to re-engage at-risk employees. When HR can gauge employee performance based on analytics, succession planning also becomes easier.
Using Data to Help Lower Insurance Costs
Analytics tools can help you examine insurance claims data and workplace demographics to identify coverage gaps and improve your understanding of what your employees want the most from your plans. This data can help you develop a comprehensive benefits strategy to address the needs of everyone in the organization.
Get the Analytics Advantage
If your HR software doesn’t offer robust reporting and analytics, your company could be at a distinct disadvantage when it comes to hiring and retaining top talent.
When you have data that “lives” in the same database, and not in unrelated systems that might have differing or duplicate information, you can easily and successfully manage it and build accurate and actionable analytics. Having the ability to access all of the pertinent data you need to make well-informed, strategic HR decisions will help you save time, money, and effort, having a positive impact on the company’s bottom line.
In this time of data-driven decision-making, a tool that combines HR, time and payroll data to explore workforce issues and deliver critical business improvements isn’t just a nice-to-have, it’s a must. To learn how you can spend less time searching for data and more time solving business problems, check out this short video of Paycor’s Workforce Insights. Or if you’re interested in seeing the product in action, click here to schedule a personalized demonstration with one of our expert solutions consultants.
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