Analytics has been too much in the HR and systems news in recent months for me to ignore – almost as much as Covid 19. In an effort to help people understand the world of HR and People Analytics, we’ve put together this handy guide, featuring 10 – hopefully helpful – answers to commonly asked questions:

1. Should I be interested in HR Analytics? Especially right now?

I’d say yes. There has been too much noise for too long in HR to pass off analytics in HR as a trend. HR systems vendors are making stuff, new products are out there, and the HR press is full of it. Analytics to me is looking like an emerging new focus for many, much like Talent a few years back. In the current climate analytics are so important – especially when looking at simple items such as how many people are working, furloughed, flexibly furloughed etc

2. What is Analytics?

Information is meaningful data. Think of Analytics as a step further – data with analysis, information with insight. And you can, with Analytics, take the information (reports), step right out of it, jumping straight from raw data to insight. This comes about in an age where “big data” availability creates massive potential for finding out new things. Read on to discover some of the benefits as analytics pertains to HR.

3. What’s the difference between reporting and Analytics?

Reports are flat data in two dimensions. Reports state things, often in great detail (think long lists of data in Excel). Reports draw on pieces of information that you put into them and design. They are great for precise things you need to know or to offer to an audience in a given format. Analytics can take data from more dimensions (otherwise unrelated factors). The extent to which this is then developed is changing all the time, but I believe true analytics has got to include insight

4. Is analytics the same as dashboarding?

I see reporting tools developing some really great new dashboards and other visualisation tools, calling themselves ‘tools for analysis’. It is really just semantics but do be aware that there is a great difference between showing information in a way that’s easy to read and creating new information. This is a key distinction.

5. What is predictive analytics?

With predictive analytics, as you’d expect, past data can be taken and insights about the future drawn. Insights don’t need to be about the future, but they could be. Analytics tools might otherwise find information you didn’t know about buried in history or purely data that is current. And analysis could even be prescriptive – guiding the organisation based on predictions made as to what should be done to create the best future scenarios. If you think about it, we all do predictive analysis – otherwise (with the exception of compliance reporting) why would we bother asking for reports at all, unless we were going to utilise the data?

6. How does analytics work?

Iinterrogating the experts, I came to an appreciation that analytics tools combine the ability to trawl through vast amounts of data, from different sources, with some sophisticated mathematical modelling to arrive at results. Big data and clever sums are two things that humankind is not so great at!

7. Do I need an analytics tool specifically?

Possibly yes. Everyone in HR tries to perform analysis to some extent but it calls for skills our minds don’t do well at. The bigger the organisation, the more relevant it could be to look at a product, but licensing options these days don’t prohibit analytics products for the medium enterprise either. But check out what your existing HRIS technology and/or business intelligence tool can now offer and compare prices, taking care to look at what these tools really do, rather than just the use of the word “analytics” in product headline descriptions. And if you are still at a basic level with management information, then wait.

8. What’s the benefit of HR analytics?

Benefits, of course, will vary with the tool and the data you choose to use it with. But here are just a few things analytics can do for you:

  • Impressive visualisation of information in a user-friendly way.
  • Answers to questions you write in plain English.
  • The option to change your question without re-writing a report.
  • Potential to predict the future with accuracy.

Another benefit is combining data from different sources and systems. In HR, this could be in respect of recruitment success, performance indicators, absenteeism, skills and their outcomes, costs etc. I saw a great example recently of a measure of “effective FTE” – a productivity measure.

9. Is analytics affordable?

Licensing for new cloud-based tools delivered to a Software-as-a-Service (SaaS) model, tend to be priced on a per employee per month basis, which is very affordable and scalable. Obviously, do expect economies of scale there, not least in factoring in implementation cost, which will vary according to the product you choose and the data sources you need to link new top layer products to, and how they are set up. But compared to the big beasts in core HR and payroll systems/services, analytics could be modest and with a considerable return on that investment.

10. How do I choose the right analytics system for me?

Well, there is a lot that is new, which makes it hard to know where to start. Find out what reporting and Business Intelligence tools you currently have in your organisation and any potential that may reside there. If you have an in-house person who is interested, task them to explore or engage for a few days with independent systems selectors to research and draw up product specifications on your behalf. However, unlike your choice of master HRIS, I think that this could be a case of selection for “good enough”. By this, I mean that if you can identify what you want to achieve, then it is arguably the right approach to stop searching when you arrive at the first solution that ticks all the boxes. Please don’t be horrified at my suggestion here – in a world with a plethora of newly-emergent choice, for a question of lower investment and shorter commitments and where ongoing service is of reduced significance compared to the core HRIS, try and pick your battles.

My top 10 questions and answers on analytics may not use big data, nor offer predictions of the future, but hopefully, they make sense and has provided you with a helpful introduction to HR analytics.

Discover what Phase 3 – the HR & Payroll Technology Consultants – can do to help you with data, reporting and business analytics.

This article was created by James Proctor, Director of Consulting & Services.

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