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HR Analytics: what is it and how to use it?

If technology is capable of making our lives a little easier at a private level, it is clear that it can also do so at a work and business level. In fact, the digitization process is giving rise to companies much better prepared to adapt to changes, since data analysis facilitates decision-making and makes it more effective thanks to HR Analytics.

The financial department of the companies was one of the first to benefit from the latest technology, followed by the administration areas. In recent years, the turn has come to the Human Resources department. So much so, that the digitization of this area and the use of Artificial Intelligence are among the most outstanding trends for this 2023. And it is in this scenario that the HR Analytics takes on special importance.

Table of Contents

What is HR Analytics?

With this name we refer to comprehensive management systems that are oriented to professionals working in the area of Human Resources, and that allow an exhaustive, accurate and fast analysis of the main indicators relating to company personnel and their relationship with the entity.

A Human Resources department can handle many different data: recruitment statistics, absenteeism rates, the types of contracts entered into, employee evaluation reports, etc. Nevertheless, a high volume of data is of no use if we are not capable of organizing the information.

Today, it makes no sense to put specialized technical personnel to do manual data collection and analysis to find out, for example, what is the average time spent in the company by the personnel hired for the accounting department. Instead, experts can make use of HR Analytics.

Because the goal of this tool is work with the data, analyze it in detail and issue reports that can help experts to better understand the reality of the situation that the company is experiencing, and to make decisions.

Ultimately, it helps leaders to:

  • Measure the different rates that it is important to know in the company: absenteeism, turnover, etc.
  • Analyze the state of personnel administration.
  • Make strategic decisions based on data updated in real time.
  • Evaluate the performance of staff and different departments.
  • Streamline management by objectives.

Beyond the data

Information is important, but good Human Resources management requires much more than having well synthesized data. If the person who has to analyze them and decide based on them You are not entirely clear about the meaning that the information is conveying to youIt is of little use to have advanced digital tools.

Perhaps at some point machines will replace humans in some tasks, but for now, for people management we still need specialists. Of course, professionals who can now do their job much more effectively thanks to the support provided by technology.

The computer program does its job comparing and analyzing the data that has been requested, and when it finishes its task, the work of the Human Resources specialist begins, who must have sufficient knowledge to interpret the information, find answers to unknowns, and solutions to the problems that the data has brought to the table.

For example, with good analytics we can obtain in just a few minutes all the information related to the people who have voluntarily left the company in the last five years. We can even segment the data based on gender, age, work area, etc.

Suppose that from this information you conclude that, in the last five years, there has been a high percentage of women between the ages of 30 and 45 who have voluntarily left their position in the marketing department. The specialist's work should then focus on investigate what is happening for this to be so, and adopt solutions.

What factors can be measured through HR Analytics?

This type of software can provide us with detailed and segmented information on any aspect related to Human Resources management that is quantifiable. For practical purposes, the three main categories that we can measure are:

Monetary indicators as one of the factors measurable by HR Analytics

Through them we can obtain information about the cost of making new contracts, the salary cost that the staff implies, the cost of turnover, the cost assumed by the company in the event of accidents at work, etc.

Absenteeism indicators

It provides us with data on the number of days off work for a certain person or a certain group, the main causes of leave, the rate of absenteeism based on gender or age, and similar information that will also help us to know What cost does absenteeism have for the company?

Indicators related to management

They are data that tell us about how well or how badly we are doing regarding personnel management. Here we find information as diverse as:

Benefits of using HR Analytics in the company

Improve the hiring process

By evaluating the recruitment process and the quality of the candidates, we can get a better idea of whether or not everything related to contracting is efficient. We can know this by looking for data that help us to know, for example:

  • How many candidates have accepted the proposed job offer.
  • Which candidate search channels work best.
  • How many candidates must be interviewed (on average) to fill a position.

Improves employee retention as one of the benefits of HR Analytics

As we saw before, HR Analytics can be very useful when evaluating the personnel management that the company is carrying out. Knowing first-hand information such as the level of satisfaction that exists among employees helps to take actions increase the retention rate.

In it nielsen case, the use of HR Analytics and the application of the data obtained to find solutions, led them to increase their retention rate among employees classified as "at risk of flight".

Increases employee performance

Data can help us know what really motivates staff members when it comes to giving the best of themselves at work. If changes are implemented that seek to increase motivation, work performance will rise.

Increase employee engagement

This is closely related to what we have seen so far. Because by improving the level of employee satisfaction we are able to increase their performance and also make them feel more loyal to the company. something that, in turn, It has a positive influence in lowering the absenteeism rate and raising the retention rate.

Facilitates Human Resources planning

Thanks to HR Analytics, we can have real-time information on what is happening in the company and, by analyzing the data, it is possible to establish fairly accurate forecasts for the future about what could happen in personnel management. We can, for example, determine that at a given moment a department will have a lack of personnel, or anticipate the departure of an important executive.

Save time and money with HR Analytics

As if all of the above were not enough, there is still one more reason to use HR Analytics, and that is that it provides companies with great savings in time and money. when making decisions. Because these are not based on mere hypotheses or outdated information, but are based on real and current information.

How is HR Analytics used?

To implement this technology, a series of steps must be followed that are common to all companies:

Identification of the problems to be solved

Technology can give us a lot of different data, but we don't have to go through it all. What you have to do is prioritize when determining key indicators, which will be related to issues that the company is interested in solving, such as reducing the absenteeism rate.

Prioritize and segment problems

There can be many problems in the field of Human Resources, and all of them must be addressed, but in due time. The first thing is to detect the issues whose resolution is most important, and start working on solving them.

Collecting data

The quality of the analysis will depend on the quality of the data. collected by the company. If you do not have enough information, then you have to start by doing data collection work.

Design of the action plan

When the technology has done its job, it is time for the specialists to do theirs, and use the information that HR Analytics has provided them to design an action plan that can help correct inefficiencies that have been detected.

Today, using technologies related to Human Resources management such as HR Analytics is a good source of competitive advantage, because it allows the company to be aware of those specific aspects in which it must improve to achieve its objectives in terms of personnel. .

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