HR analytics: more of your questions answered

A little while back, we put together a handy guide on HR analytics, answering the top 10 most frequently asked questions on this topic. HR analytics provides HR teams with valuable information and insights, with the massive potential for businesses to find out new things that can guide informed business decisions.

It’s a trend that is still going strong within the HR industry, and with this in mind we decided to create ‘Part 2’ of our guide to HR analytics, covering some more commonly-asked questions…

1. What is the purpose of HR analytics?

The purpose of HR analytics is to achieve a data-driven approach toward HR Management. HR analytics are also referred to as people analytics or talent analytics, and their purpose is to gather, analyse and report on HR data.

HR analytics enables your organisation to measure the impact of a range of HR metrics and make decisions based on data. They’re used to provide insight into how best to manage employees and reach business goals.

2. How can HR analytics value-add to the business strategy?

The biggest value-add from HR analytics is that it offers tangible data that can help you make business decisions and create strategies that are underpinned by people-centric data.

HR analytics can be used to improve processes in a number of HR areas, and also allows you to collect and analyse data to help you continuously improve your business. You can also use analytics to address particular problems or areas of concern. If you have a high staff turnover rate and are looking for someone who will be less likely to leave, for example, analytics can be used in the hiring process to allow you to filter candidates by those who have stayed in previous jobs for longer periods of time. 

3. How can HR analytics transform the workplace?

HR analytics really comes into its own when it comes to talent management. HR analytics software enables HR teams to track data around elements such as performance, attendance, workforce costs, and staffing needs. This helps predict future trends and allows HR teams to hire when appropriate.

HR analytics can also help to identify traits that are predictors of success within an organisation or a team. This means that HR departments can then search for new talent that ticks these boxes, which helps avoid hiring the wrong people. Hiring the right people from the off avoids costly hiring mistakes and has a big impact on the success of teams and the organisation as a whole.

HR analytics can also be used to monitor employee development, productivity, and staff retention: all valuable data that can influence future business decisions.

4. Which is the best HR analytics solution?

Whenever it comes to software selection, there is always an abundance of options available and it can be difficult to know which solution is best for your business.

When choosing the best HR analytics solution for your business, the key is to think about what your specific business needs are: what do you want to achieve from using HR analytics?

Certain HR analytics tools excel in particular areas, so it’s a good idea to understand a little more about the options on the market place before selecting which software is best for you. For example, some HR analytics software is great for activity tracking and employee monitoring. Others are excellent for performance analysis, strategic goal tracking, or workforce forecasting. There are other tools which are great for building customisable reports, conducting employee surveys, or engagement forecasting, or forecasting employee engagement. There are even tools that provide culture analysis.

If you’re confused as to which software is best suited to your business, a HR analytics consultancy can help. HR analytics consultants are experts in HR software and will be happy to help when it comes to software selection.

What metrics does HR analytics measure?

Whilst not an exhaustive list, here are some of the most common metrics that HR analytics are used to measure:

Time to hire –

The average length of time that it takes for you to hire a new employee, from the time of the job posting to their acceptance of an employment offer.

Cost per hire-

How much does it cost for you to hire a new employee? Elements such as recruitment fees, third party listing sites, and time spent on candidate selection and interviews will all be taken into account.

Staff turnover-

A key metric for HR teams who want to reduce employee turnover and spot trends in data that could help with future staff turnover.

Billable hours-

A highly-relevant metric for services such as marketing agencies or law firms.


Understanding the amount of time that employees are absent from work for holidays, sick days, or other reasons. Understanding this data and spotting trends may help reduce absenteeism and the related costs to your business.

Employee engagement-

Some HR Analytics software excels in creating employee surveys which are the best way to measure employee engagement.


Diversity includes race, ethnicity, job type and salary. If you are an equal opportunities employer you should have access to these metrics.

How Phase 3 can help with HR Analytics

As a business, you may understand the importance of using HR analytics but are unsure of where to start when it comes to software selection. This is where Phase 3 can help. As professional HR software consultants, we can advise on which HR analytics will help you to achieve your specific business goals. Get in touch for more information.

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Written by : Laura Lee

Laura’s role as Head of Marketing sees her continually looking for new opportunities to tell the world how great Phase 3 is.

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