What Is HR Analytics

5/21/2019 What is HR Analytics (People Analytics)?
Human Resources Analytics | AIHR
BlogResourcesAbout Us  Academy  Sign In
Erik van Vulpen
8 min read
The question “what is HR analytics?” is asked by a lot of HR professionals who want to get started with people analytics. In this post, we will
explain what HR analytics is and how it will shape businesses in the future.
Table of content:
Introduction
What is HR analytics?
https://www.analyticsinhr.com/blog/what-is-hr-analytics/ 1/28
5/21/2019 What is HR Analytics (People Analytics)? Human Resources Analytics | AIHR
HR analytics in literature
How HR analytics helps Human Resources Management
How to get started with People Analytics
How does People Analytics shape the business?
People Analytics Factsheet
Introduction
Of all the departments in an organization, the Human Resource (HR) department may have the least popular reputation.
This has two reasons. First of all, they are like your doctor: you’d rather never see or need him. When the HR manager calls you and asks to
come by her office, it’s likely that there’s something bad about to happen. You may get reprimanded, put on notice, or even fired. If it was good
news, like getting a promotion, your manager would tell you. Not HR.
Second, HR is regarded as soft. Fluffy-duddy. Old-fashioned. A lot of the work in HR is based on ‘gut feeling’. We’re doing things a certain way
because we’ve always done it that way. HR doesn’t have a reputation of bringing in the bick bucks or playing a numbers game like sales. HR
also struggles to quantify and measure its success, like marketing and finance do.
HR analytics changes all of this. A lot of the challenges we just described can be resolved by becoming more data-driven and analytical savvy.
What is HR analytics?
HR analytics is also known as people analytics, workforce analytics, or talent analytics. Human Resource analytics is about analyzing an
organization’s people problems using data. It enables you to answer critical questions about your organization. For example:
How high is your annual employee turnover?

How much of your employee turnover consists of regretted loss?
Do you know which employees will be the most likely to leave your company within a year?
These questions can only be answered using data. Most HR professionals can easily answer the first question. However, answering the second
question is harder.
To answer this second question, you would need to combine two different data sources: your Human Resources Information System (HRIS) and
your Performance Management System.
To answer the third question, you would need even more data and extensively analyze it as well.
HR departments have a tradition of collecting vast amounts of HR data. Unfortunately, this data often remains unused. As soon as organizations
start to analyze their people problems by using this data, they are engaged in HR analytics.
HR analytics in literature
Because people analytics is a fairly novel topic, it is still mostly unexplored in the scientific literature. The best known scientific definition of
HR analytics is by Heuvel & Bondarouk. According to them, HR analytics is the systematic identification and quantification of the people
drivers of business outcomes (Heuvel & Bondarouk, 2016).
In other words, it is a data-driven approach toward Human Resources Management.
Over the past 100 years, Human Resource Management has changed. It has moved from an operational discipline towards a more strategic
discipline. The popularity of the term Strategic Human Resource Management (SHRM) exemplifies this. The data-driven approach that
characterizes HR analytics is in line with this development.
By using people analytics you don’t have to rely on gut feeling anymore. Analytics enables HR professionals to make data-driven decisions.
Furthermore, analytics helps to test the effectiveness of HR policies and different interventions.
By the way, HR analytics is similar to people analytics but there are some subtle differences in how the terms are used.
How HR analytics helps Human Resource Management

Like marketing analytics has revolutionized the field of marketing, HR analytics is changing HR. It enables HR to:
Make better decisions using data

Create a business case for HR interventions
Test the effectiveness of these interventions
Move from an operational partner to a tactical, or even strategic partner
Today, the majority of HR departments focus on reporting employee data. This doesn’t suffice in today’s data-driven economy.
Just keeping records is often insufficient to add strategic value. In the words of Carly Fiorina: “The goal is to turn data into information and
information into insight”. This also applies to HR.
Doing this enables HR to become more involved in decision-making on a strategic level. The picture below shows how this works in practice.
Online AIHR Academy
The demand for HR professionals with analytics related skills far exceeds the current
supply. The HR Analytics Academy offers a unique opportunity to develop these in-
demand skills.
Launch or Advance Your Career in HR Analytics
Browse Courses
A few examples of People Analytics

To get started with people analytics, you need to combine data from different HR systems. Say you want to measure the impact of employee
engagement on financial performance. To measure this relationship, you need to combine your annual engagement survey with your
performance data. This way you can calculate the impact of engagement on the financial performance of different stores and departments.
Key HR areas will change based on the insights gained from HR analytics. Functions like recruitment, performance management, and learning &
development will change.
Imagine that you can calculate the business impact of your learning and development budget! Or imagine that you can predict which new hires
will become your highest performers in two years. Or that you can predict which new hires will leave your company in the first year. Having this
information will change your hiring & selection procedures and decisions.
If you want to read more about how data can change hiring practices, check out Laszlo Bock’s book ‘Work Rules’. Laszlo Bock was the senior
VP of People Operations at Google. In his book, he describes how hiring practices changed at Google after they started to analyze their
recruitment data.
We’ve published some very practical case studies in the past that show a step-by-step approach to analytics. Three of them I’d recommend, are:
Case Study 1: Key Drivers of Retail Sales Performance

Case Study 2: Reducing Workplace Accidents Using People Analytics
Case Study 3: How we Determined Optimal Staffing Levels
How to get started with people analytics

Organizations usually start by asking simple questions. An example is: “Which employees are my high potentials?” You can answer this
question using quite simple statistics. Doing this helps to quantify the relationships between people’s abilities and organizational outcomes. This
way analytics helps companies track absenteeism, turnover, burnout, performance and much more.
An even better way to get started is following a professional course in HR analytics. In the HR analytics academy, we offer three courses.
The HR analytics lead course. This course is for people who are heading an analytics department and teaches all the skills and tools needed to
do this successfully.
The HR Analyst course. This course is for HR professionals who want to learn how to work with HR data using simple tools like Excel and
PowerBI.
The strategic HR metrics course. Metrics are a starting point for analytics. If you think you’re not ready for analytics because you’re not yet
working with the right metrics, this is the course for you.
Analytics makes HR (even more) exciting. Its insights are input for strategic decisions and optimize day-to-day business processes.
In addition, if you know what makes your employees tick, you can create a better work environment and identify future leaders. Imagine that
you can predict which employees are most likely to leave the company. This information helps your succession management and benefits
strategic workforce planning. A notable example of a company doing this is Credit Suisse.
After asking the right question, you have to select data from your different systems. This data is then combined, cleaned and analyzed. This
analysis leads to insights.
Not all insights are equally interesting. That’s why you should ask questions about things you can change. For example, you can’t change an
employee’s gender. However, you do have influence over your management styles and engagement levels. Asking the right questions leads to
actionable insights.
How does People Analytics shape the business?

You can imagine that HR analytics holds enormous value for an organization. These examples are only the beginning. Indeed, analytics enables
companies to measure the business impact of people policies.
By applying complex statistical analyses, HR can predict the future of the workforce. This enables managers to measure the financial impact of
Human Resource practices. To read more about the tools used for these analyses, check our overview on the top HR analytics tools.
Measuring the impact of HR on bottom line performance is the “holy grail” of HR analytics (Lawler III, Levenson & Boudreau, 2004). This is
often done by calculating a Return on Investment (ROI). It is the most powerful way for HR to increase its strategic influence.
Aforementioned examples have an impact on both the cost and the revenue side of the business.
Knowing the impact of HR policies will also help HR to become a strategic partner and get rid of its ‘soft’ image. It helps HR to align its
strategy with business goals and to quantify the value it adds to the business. It takes the guess-work out of HR.
So, how do we at Analytics in HR define HR analytics? We think it is about identifying the people-related drivers of business performance. It
takes the guesswork out of employee management and is, therefore, the future of HR. Or, to put it in the words of Edwards Deming: “Without
data you’re just another person with an opinion”.
People Analytics Factsheet

To wrap all the information up, we’ve created an infographic with the latest research on people analytics. It contains the major challenges that
the field is facing in terms of skills, data quality, data integration, and reporting. To download the full infographic as a PDF, click the link.
Author: Erik van Vulpen

Erik van Vulpen is founder of Analytics in HR (AIHR). He is writer, speaker and trainer on people analytics. Erik is
instructor for the HR Analytics Academy and has extensive experience in the application HR analytics. Contact Erik at
erik@analyticsinhr.com or connect with him on LinkedIn.
Join the Conversation

4 Comments AIHR Blog 
1 Login
 R d t f S tb B t
 Recommend 1 t Tweet f Share Sort by Best
Join the discussion…
LOG IN WITH
OR SIGN UP WITH DISQUS ?
Name
Prakash • a year ago

Dear sir / Madam,
I am Prakash, i have been working asst HR Manager in A NGO for 6 years. I want to be a HR Analyst. My background is Graduate with
Statistics and MBA(HR). Can you help me who i become a HR Analyst and what i want to learn for this position.
1△ ▽ • Reply • Share ›
Erik van Vulpen Mod > Prakash • a year ago

Dear Prakash, reading more about it is a great way to learn more.
If you want to learn even more, please check the HR Analytics Academy. On the Academy the best and most experienced
instructors in the world teach you how to do analytics or how to manage an analytics project at your organization. For more
information, visit https://www.hranalyticsacad....
Isyaku Ali • 2 years ago

Analytic in HR is very nice to use.
Aaron Windfield • a year ago

Hi Erik — great read, thanks for sharing! Appreciated the reference to using marketing-like approaches when thinking about HR
analytics. DDI, The Conference Board, and EY recently discovered that despite HR analytics becoming more widely adopted over the
last 5 years HR professionals are becoming worse at effectively using it. This seems pretty backwards, what are your thoughts on the
reasons why?
A hi f d t i
https://www.analyticsinhr.com/blog/what-is-hr-analytics/
ti t t ti 24/28
— Aaron, chief data scientist at www.psocratic.com
△ ▽ • Reply • Share ›
Found this useful? Share it on

   it!  + 
Want to learn more?
Blog
We provide the most knowledgeable content
See More
Academy
We provide the most comprehensive courses
See More
Community
We’re excited to announce the upcoming Forum
See More
Related Posts
5 Ways our Work will AIHR Live – Episode 6 Raising the bar in
Change within 10 years with Ryne Sherman benchmarking
May 20, 2019 May 13, 2019 May 6, 2019
How to Maximize the Strategic Workforce AIHR Live – Episode 5

Value of Competency Planning in 3-2-1 with Mark van Dongen
Analytics April 23, 2019 April 17, 2019
April 29, 2019
Welcome to the HR
Analytics Academy
Browse courses
  
© AIHR | Analytics in HR B.V. 2019. All rights reserved. - View our privacy policy

What Is HR Analytics

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

What Is HR Analytics

Uploaded by

Copyright:

Available Formats

5/21/2019 What is HR Analytics (People Analytics)?

Human Resources Analytics | AIHR

BlogResourcesAbout Us  Academy  Sign In

Erik van Vulpen

How high is your annual employee turnover?

In other words, it is a data-driven approach toward Human Resources Management.

How HR analytics helps Human Resource Management

Make better decisions using data

Online AIHR Academy

Launch or Advance Your Career in HR Analytics

A few examples of People Analytics

Case Study 1: Key Drivers of Retail Sales Performance

How to get started with people analytics

How does People Analytics shape the business?

People Analytics Factsheet

Author: Erik van Vulpen

Join the Conversation

Join the discussion…

Prakash • a year ago

Erik van Vulpen Mod > Prakash • a year ago

Isyaku Ali • 2 years ago

Aaron Windfield • a year ago

Found this useful? Share it on

Want to learn more?

How to Maximize the Strategic Workforce AIHR Live – Episode 5

You might also like