In today’s competitive business world, big data is, well, big. Always looking for an edge, the most successful companies are integrating big data and analytics into nearly every facet of their operations.
There is one glaring exception, however—HR.
A recent Bersin study found that only 14 percent of companies have used HR analytics in any meaningful way. Considering a company’s employees represent its largest single investment—and expense—this statistic is startling. Factor in that it can cost up to $7,000 to hire just one employee, and between 20-250 percent of a lost worker’s salary to replace them, and it’s clear companies are losing money by not leveraging HR analytics.
Collect intelligence that’s actually intelligent.
HR analytics provide a wealth of information to companies about their new hires, existing workforce, what motivates people, and why employees leave. This goes way beyond the traditional—and often anecdotal—monitoring of recruiting and retention into a deep data-driven analysis of the true success of company’s HR management. Leveraging HR analytics allows companies to get the most out of new hires right away, which is particularly important with the growing millennial workforce, as they are prone to job-hopping, sometimes leaving after as little as six months. Knowing more about a company’s employees can also help HR departments engage and keep top performers—and get better at weeding out workers who are not productively contributing.
HR analytics in action: Google is getting it right and has the ROI to prove it.
To find a business case for using HR analytics, we found a great example at one of the world’s largest technology companies. For the past six years, Google has invested heavily in making use of HR data, creating an entire department called People Analytics. Its mission is to use data and analytics for “unique insight into predicting employee success at Google.” Given the tech giant’s market dominance, this strategy has clearly paid off. More specifically, since investing in HR analytics, Google has cut the number of interviews it conducts; optimized the size of corporate departments; reduced post-maternity leave departures by 50 percent; and boosted the productivity of new employees by 15 percent.
Start here (and, ahem, now!).
As seen with Google, HR analytics tell a story about what makes an employee successful. While not every company can create a People Analytics department to rival a tech giant’s, all can put similar practices in place—and will lose a competitive edge if they don’t.
There is a place for HR analytics in nearly every phase of an employee’s tenure at a company, particularly:
Onboarding and training: Companies should ensure new employees reach maximum productivity as soon as possible. Establishing data-driven benchmarks for productivity allows companies to evaluate the time-to-contribution of new hires and analyze the effectiveness of onboarding and training programs. An optimized learning platform like Bridge can be invaluable in both collecting this data and delivering training that makes employees more productive.
Performance contribution and outcomes: Consistently reviewing and evaluating progress against goals and expected outcomes provides an opportunity to weigh an employee’s contributions against established benchmarks, and gather important information regarding what motivates a company’s workers and keeps top performers engaged. Analyzing this data allows companies to maximize employee productivity and satisfaction by finding ways to better manage organizational structures, ongoing training, incentive programs, and more.
Exit interviews: Exit interviews give valuable empirical data about the people leaving the company, and why. Smart companies will capture this information and create a dashboard for tracking it in real-time. The resulting analysis provides insights into every aspect of an employee’s stay at the company—and the basis for data-driven changes.
HR analytics are more than facts and figures—they’re the new business reality.
As more companies follow Google’s lead and embrace HR analytics, those not making data-driven decisions about their employees will lose an important competitive edge. The information is already within the company; it just needs to be collected and analyzed. Putting those processes in place will go a long way to ensuring a company’s long-term success.