In Human Resources (HR), data is a guiding compass. With talent analytics and predictive analytics, HR teams can make informed decisions to help support employee wellbeing, attract top talent, and remain a competitive place to work.
During the first quarter of 2024, unemployment in the UK was at 4.3%, the highest point in many years. The only exception to this is the COVID-19 shutdowns. We’ve experienced the Great Resignation, a shift toward remote work, and other never-before-seen trends in employment.
Research shows that turnover costs range from 30% to 200% of an employee’s annual salary. If the C-suite and other key stakeholders understood that, don’t you think they would insist on making changes — starting with using more data in HR?
Keep reading if you are ready to learn how a data-driven approach is an HR must.
In this article, we answer some of the top questions about HR data and reveal seven reasons it is HR’s most important asset.
What Type of Data Does HR Collect?
HR departments collect data about their organisations’ individual team members, job candidates, and overall workforce to determine the effectiveness of their employee programmes.
For instance, your HR department can discover how to better tailor benefit packages and annual raises to keep your company competitive. Or, they can learn how to spot the best candidates for your hiring role. Utilise AI headshots for a professional touch in your hiring process.
As a core pillar in people analytics, HR data is gathered through many different data collection methods and typically includes key metrics like:
- Employee Net Promoter Score (eNPS)
- Revenue per employee
- Employee engagement
- Total cost of workforce
- Employee productivity
- Survey participation
- Retention rates
- Absentee rates
- Survey scores
- Cost per hire
What Kind of Metrics Would Be Most Useful for HR to Track?
Some of the most useful metrics for HR to track are employee engagement, revenue per employee, and employee retention.
It is also important to ask for continuous employee feedback via focus groups, one-on-one meetings, and employee satisfaction surveys. This helps you gauge employee morale and gives you actionable insights directly from the people who matter most.
It is also important to remember that tracking and implementation are two different things.
To keep your organisation moving forward, directors and frontline managers must stay in the loop. This means updating them on employee metrics often—we’d say weekly or biweekly—so they can integrate the feedback in real-time.
Tuning into employees is a pivotal way to prevent smaller issues from becoming raging wildfires.
For example, you might learn that many employees are dissatisfied with how much Paid Time Off (PTO) they get. These insights can nudge directors to rethink PTO limits before employee churn starts to spiral.
To sum up, don’t just track HR metrics. Be sure to act on the insights you discover, too.
What Are the HR Metrics Related to Employee Engagement?
When employee engagement is high, sick absence is reduced, and fewer employees leave.
Investing in the continuous understanding of what drives employee engagement helps you develop long-term, meaningful relationships with your employees. This also keeps your organisation competitive and fosters company loyalty.
As a bonus, the longer employees happily work for your organisation, the more engaged, productive, and committed they will be.
Some of the HR metrics related to employee engagement include:
- Employee survey participation rate
- Voluntary turnover rate
- Employee productivity
- Retention rate
- eNPS
7 Reasons Data Is HR’s Most Important Asset
There are endless reasons data is a crucial HR asset. But here are some of the top ones to consider:
Reveals Employee Turnover Rates
Tracking HR metrics tells you a lot about your organisation’s company culture and attrition rates. High employee turnover rates — especially in a short time period — help reveal problem areas you’ll need to work on to keep churn low and team members satisfied.
For instance, you may discover that your salary offers aren’t competitive enough to keep employees around long-term. Or you may learn that your teams lack the proper management to turn in high-quality work.
Helps Point out Ideal Candidates
HR data analytics can help you refine the recruitment process and identify top-tier talent for upcoming roles.
Depending on your chosen software, you can analyse employee performance data, create candidate profiles, and use predictive analytics to spot promising employees.
This approach is a win-win for candidates and your organisation. Focusing on the right people for the job can make hiring easier for everyone.
Monitors Employee Engagement
Employee engagement metrics give you essential information about why people leave and what motivates them to stay.
Real-time employee engagement surveys and emotion monitoring apps, like Emooter, can help you tap into your workforce’s mood.
For instance, a simple survey question that provides rich insights might be: “What are some of the best companies in (insert your industry/niche, location here)?”.
For example, if your organisation is a travel nursing agency, you could ask: “What are some of the best travel nursing agencies in the US?”. This question not only reveals the top competition in your area but also helps you inspect what these organisations offer so you can improve yours.
Reveals Employee Productivity
Highly engaged employees are critical factors affecting business success and profitability, from sales to company morale to customer satisfaction.
When your employees are productive, they produce better work and can help you sell more products and services. They also take better care of your customers, which can inspire a higher customer lifetime value (CLTV).
With session replay, you can visually capture and analyse how employees interact with their daily workflows, tasks, and work platforms. You can also study their customer interactions and project quality.
These insights give you a deeper understanding of their production rates and user engagement and identify pain points in daily work processes.
Measures Revenue per Employee
Speaking of productivity.
HR data can help you uncover how much revenue each team member brings in. You can track commission rates, how many new clients they’ve onboarded, how long their new customers stay at your organisation, and more.
You can also gauge which employees are underperforming so you can reach out with specific support aids. These aids might include access to sales training software, customer service training, or skill development programmes.
Gauges Employee Wellness
HR data can help you discover how well your employees feel at work — and how you can better accommodate them.
By offering mental fitness programmes, dietary support, and other aids, you can support employees to bring their whole selves to work.
You can also go the extra mile and offer tailored support. For instance, for diabetic employees, you might offer a discount on telehealth subscriptions and custom nutritional support. For some team members, that might include offering tips on how to adopt a semaglutide diet plan and what healthy snacks to keep at work.
Gauging employee wellness also helps you stay prepared and offer the proper support in case an employee has a medical emergency.
You can also discover what employee wellness programmes keep your organisation competitive. Since the pandemic, 81% of employers have focused more on employee mental health in an effort to reduce associated costs.
Some wellness options your employees may value include:
- Low-cost or free therapy sessions
- Healthy snack vending machines
- Personal development coaching
- Tailored nutritional guidance
- Telehealth subscriptions
- Free gym memberships
Aids in Workforce Planning
With HR metrics, you can always closely monitor your organisation’s workforce needs — especially during peak hiring seasons when staff numbers are lower.
Reviewing workforce analytics helps you uncover how many people you need during specific periods so your company always has enough staff. You can also learn what kind of team members you need to hire or outsource to.
Some metrics you can track to stay on top of workforce planning include:
- Recruitment, onboarding, training, and retirement cost per employee
- Time to proficiency (for new hires)
- Facilities cost per employee
- Salary cost per employee
- Overhead per employee
- Workforce overheads
- Tenure and seniority
- Experience levels
- Skills coverage
- Turnover rates
- Attrition rates
- Absenteeism
- Headcount
- Benefits
- Salary
How HR Departments Can Improve Data Collection Now and in the Near Future
As technology progresses, our jobs change, too. I won’t dig deep into the past, but do you know how HR departments used to work years ago? They mainly relied on their intuition and the (physical) data they had in front of them – on paper.
Today, things are very different, especially for HR departments. HR can now harness the power of various technologies and tools. Doing this will help them develop streamlined processes and solutions and make faster decisions. Also, these changes brought the need to enhance things and come up with even faster solutions.
Here is what you should know:
Enhancing Data Collection Now
HR departments must improve their data collection processes. Only then can the team focus on maximising data value. They can incorporate integrated HR systems with centralised data from different sources, including performance reviews, employee surveys, payroll, etc.
Such integration ensures accuracy and consistency and will also help streamline data management. That’s why prioritising data security and privacy is a must. Handling sensitive data like employee information requires strict measures. These measures must follow regulations and protect the information from unauthorised breaches.
One more crucial point is encouraging a data-driven culture in the HR department. Data-driven encouragement entails training HR professionals to understand and interpret data. This is helpful when making important, data-informed decisions.
Organisations can ensure that their HR strategies are grounded in factual insights rather than intuition. They must foster a culture where data is valued and effectively used. This is where generative AI for HR comes into play.
Preparing for the Future
Predicting the future is hard, in general. But when it comes to HR data analytics, it’s pretty straightforward. AI’s role in HR data analytics is vast and will expand further; there is no question about it.
AI excels at automating repetitive tasks like screening candidates (resumes). This allows HR professionals to focus on developing new strategies and activities. Besides, advanced AI algorithms can provide much deeper insights into employee behaviour. These insights help with outcome predictions like performance potential and job satisfaction.
Yet, the department must invest in upskilling their team to leverage these technologies. An up-to-date HR team with new technologies like AI and Machine Learning (ML) is essential. With the latest knowledge, HR team members will be equipped to work alongside AI and ML tools. Thus, teams will better understand the AI/ML outputs.
Besides learning new skills, HR departments must explore these opportunities further. They must learn of the enormous potential of ML and predictive analytics. They can also analyse historical data and use it to forecast future trends. Some of these trends include the success of training programmes or workforce demand.
How does that help? Predictive capabilities enable teams to address upcoming challenges and capitalise on opportunities proactively.
Wrapping Up
How your organisation responds to HR data is one of the core pillars determining its success.
By using HR metrics to refine your recruitment strategy and improve the employee experience, you can position your company as one of the best workplaces.
Remember, insights without action are meaningless. Bookmark, print out and share this guide with your fellow HR reps and decision-makers. Then, pull out reports weekly or bi-weekly and send employee feedback to managers and relevant higher-ups.
Most importantly, implement your employees’ insights if they make sense for your business and team members. Rinse and repeat this process to create an environment where people love coming to work.
Author: Ezekiel Cohen – Freelance SEO & Marketing Specialist at Contently.
Photo credit: StockCake
