It will come as no surprise, to those of us in the HR sector, that businesses pursuing an analytical approach are said to be leading the way in terms of growing market share in their sector. An MIT report[i], looking at how the smartest organisations are embedding analytics to transform insights into action, found that the top-performing organisations use analytics five times more than the lower performing ones, according to a survey of 3,000 executives, managers and analysts.
Despite its recognised benefits, however, there is still room for improvement when it comes to the take-up of analytic tools across human resource departments. Deloitte’s Global Human Capital Trends 2015 study[ii], for example, highlighted a disparity between analytics knowledge and putting that understanding into practice. Of the survey’s respondents, three in four companies realised the value of analytics in HR, but shockingly, only eight per cent rated their organisation as strong in this area.
The question then arises; is HR so pre-occupied with day-to-day activities that it has become overly reliant on manual processes, despite the knowledge that these may be creating more problems than solutions? Manually entering data so multiple departments are able to track recruitment is a large financial drain on any business. There is also the issue of human error, where expensive mistakes can be caused from miscalculations in spreadsheets and payroll. This is worrying, particularly in light of the fact that errors from manual entry are said to cost firms one to eight per cent of total payroll[iii].
With UK job market confidence now at its weakest in three years[iv], the HR professionals we speak to have clearly seen a shift in role from that of data collector to data interpreter. With the assistance of dedicated analytics tools, key stakeholders within organisations are able to identify visually, in real time, areas that may be a cause for concern – for example, the number of current personnel vacancies, skills gaps within departments and the associated turnover of those departments.
Analytics is providing HR departments with valuable business intelligence in an accessible manner, key to effective recruitment and talent management. It’s also important to stress that analytics software is not just the domain of large enterprises, smaller businesses can save critical funds by facilitating smarter hiring decisions, which help to bolster return on investment. As HR staff gain more visibility over the strategic implications of their decisions, we suspect analytics’ role will continue to grow in importance for the wider business as a tool to drive and maintain competitive advantage.
Effective workforce planning, based on organisational results, enables senior decision makers including HR Directors to start shaping the business to meet current and future demands. More specifically, Corporate Performance Management (CPM) analytic and HR analytic tools provide sizeable visibility and input into all aspects of the recruitment and talent management process.
If you are interested in learning more about analytics in business, you can read Talentia’s white paper, The Future of Finance: Harnessing data analytics for competitive advantage.