What is The Impact of HR Analytics on Strategic Business Decisions ?
If you analyze functions like finance, supply chain, CRM, IT and marketing you will find common key drivers of success. They include: data-driven analytical decision-making, having everything digital and connected, showing in dollars how their actions directly impact strategic business goals, continuous improvement measures and being forward looking.
Most HR functions have not yet shifted to this high business impact approach, but fortunately Sage has taken steps with the addition of Sage People HCM and its deep analytics functionality to better support its customers.
Why should businesses shift to a data-driven approach and embrace analytics:
- Analytics allows HR and its functions to measure and then increase its business impacts.
When everything in HR is digital, prioritized and managed with data, HR can show where and how much it directly impacts strategic business goals.
- Analytics allow HR and its functions to increase workforce productivity.
HR can utilize analytics to identify the factors that directly increase productivity.
- Analytics allow HR and its functions to contribute to an increase in corporate speed and adaptability.
In a rapidly changing and volatile world, businesses can only succeed if they are fast and adapt quickly. HR can make a contribution to that effort by utilizing analytics to develop a hiring process that selects individuals with these two key skill sets.
- Analytics allows HR and its functions to contribute to increasing corporate innovations.
Analytics can help HR design recruiting systems that effectively attract the best innovators.
- Data allows HR and its functions to more effectively influence managers.
The best thing about using data to influence managers is it’s hard for them to contest it.
- Predictive analytics prepare managers and HR for the future.
The most impactful component of data-driven decision-making is the ability to predict trends and upcoming problems or opportunities in talent management.
- Analytics allows HR to prioritize and funnel resources into the highest business impact areas.
HR leaders can more accurately allocate their HR budget and staff into the programs with the maximum impact.
- Analytics allows HR and its functions to identify which existing talent programs are not working.
Analytics helps HR leaders discover which of their existing programs and tools are working and which ones are not. Analytics also allow you to assess the effectiveness of new programs.
- Analytics will identify the hidden causes of problems.
HR must go beyond its current “what happened metrics” (i.e. our turnover is 12%) and begin gathering what I call “why metrics” (i.e. 85% left because of bad managers).
- Data will increase hiring and recruiting efficiency.
Research by the Bosh Consulting Group found that the recruiting function had the highest impact on both corporate revenues and profits. As a result, it makes sense to apply analytics in this area.
By freely being able to share data, HR will better be able to understand their needs and to provide improved service to all other business functions.