HR Analytics: 5 practical tips to get started

People love a good story. This is also true when it comes to getting started with HR data and analytics. So, be sure to create a clear and simple narrative that answers questions such as:

• Why is data analytics relevant to our organisation?
• What are we trying to achieve?
• Who will benefit from this?

Having that kind of overarching story will enable you to keep track of where you’re heading while rallying different decision-makers within your organisation behind the project and goals.

To kickstart HR and people analytics, first take a step back and ask the question: “What aspects of my workforce influence my business?” That’s where your gut feeling comes in. Then, based on your experience and backed by historical data, you probably have a clue of what kind of HR-related business topics deserve your attention.

You may want to tackle your labour costs, for example. Or perhaps you want to focus on enhancing your company’s capacity planning, productivity, talent acquisition, and so on?

Next, pick one well-defined topic to explore first. For example, say your organisation wants to do something about its capacity. Such a broad theme can be further subdivided into more easily manageable subthemes. Maybe absenteeism should be your focus? Or how about working time? Or perhaps your organisation needs more clarity on its recruiting and onboarding success rate? The more specifically outlined the topic, the better.

Determining the scope of your HR and people analytics should not just be “an HR thing”. On the contrary, HR acts as an important sparring partner in the whole process (but other departments and business units should also be fully on board). Whether it’s management, IT, finance, operations or legal, every part of your organisation has a different outlook on both workforce aspects and data usage that should be taken into account.

In other words, be sure to speak with decision-makers from every relevant department and/or business unit – and brainstorm about the project scope together. Here again: less is more. A small but successful first project will help you create a broad support base for more advanced HR and people data projects in the future.

Once you’ve determined the scope and built a support base, it’s time to map out the sources from which you’ll be pulling your data. Depending on the size of your company, these data sources can take on various shapes. From Excel and Google sheets to CRM and HR systems, time-tracking and planning tools, talent management software and training systems.

Depending on the scope of your project, you may also need to consider external data sources. Take, for instance, a company that wants to be the first thing that comes to mind as an employer that can attract and maintain a diverse and inclusive workforce. Such an organisation will want to include a share of voice on social media as an external data source.

Before getting started with HR data, it’s important to establish a common ground. This often means understanding each other’s language and terminology. The way you calculate FTEs, for instance, may vary depending on the context, especially in case of a merger or acquisition. Another example: not everyone looks at the employee turnover rate in the same way.

For your HR department, for instance, data on even interim employees are relevant to keep in mind here, while your finance department and executive management team may prefer to measure only the number of leaving employees who were actually on the payroll.

When documenting metrics such as these, describe in detail:

• what measure the metric expresses,
• how it’s calculated,
• from which data source it will be retrieved and with what frequency,
• which goals or KPIs you’re trying to achieve.

In addition to a shared data language, a common point of reference is crucial as well. Sometimes this means carrying out a zero measurement. Where is your organisation now in terms of employee wellbeing and satisfaction, performance or absenteeism, for example? To find out if you’re heading in the right direction, you’ll need to know where you started.