HR ANALYTICS

Yatin Nodiyal
Yogesh Bisht

MBA FA

USMS,GGSIPU, New Delhi

HR Analytics

 Analytics is not so much about numbers, as it is to do with logic and reasoning 

Analytics is different from Analysis, which is the equivalent of number
crunching. Analytics uses analysis but then builds on it to understand the 'why'
behind the figures and/or to predict decisions. Analytics is the methodology of
logical analysis
 Analytics requires the use of carefully constructed metrics
 HR Analytics is data based; it uses past data to predict the future
 It is not about the quantity of data churned; it is about the logic used to link
metrics to results
Core concepts and terminologies

Analytics = Business
Intelligence

Decision
Core concepts and terminologies
Business intelligence (BI) is a set of theories,
methodologies, processes, architectures, and
technologies that transform raw data into meaningful
and useful information for business purposes.

Business analytics (BA) refers to the skills,

technologies, applications and practices for continuous
iterative exploration and investigation of past business
performance to gain insight and drive business
planning.
7
Past to
future

Tera bytes of data

information being Analytics is
of emphasis
generated every single shifting from
analysis
trend based purely
day which is being used
internal
on data to
to accurately, what will
answer, fairly
scenarios of the
presenting
probably occur in the
future
future
HR’s
Evolution
Background
Need of HR analytics &
reporting
 Many organizations have high quality HR data (residing with a multitude of systems, such as
the HRMS, performance management, learning, compensation, survey, etc.) but still struggle to use
it effectively to predict workforce trends, minimize risks and maximize returns.

 The costs of attrition, poor hiring, sub-optimal compensation, keeping below par employees, bad
training & learning strategies are just too high

 Data-driven insights to make decisions are always better than judgmental (subjective) HR
practices in terms of
 how to recruit
 whom to hire
 how to onboard and train employees
 how they keep employees informed and engaged through their tenure with the
organization
Hence regular tracking and prediction of crucial HR metrics is
indispensable
Why HR Analytics?
“What gets “The business
measured, gets demands on HR are
managed; What increasingly going
gets managed, to be on analysis
gets executed” Measure & Return on just because people
- Peter Drucker are so expensive“
Manage Investment
- David Foster

“ To clearly “Global organizations

demonstrate the with workforce
interaction of
Linkage of
Business analytics and
business objectives Performance workforce planning
and workforce Objectives Improvement outperform all other
strategies to and People organizations by 30%
determine a full Strategies more sales per
picture of likely employee.”
outcomes” - CedarCrestone
HR Dashboards - SAP
Objectives

 Predict attrition especially amongst high

performers.
 Forecast the right fitment for aspiring
employee
 Predict how compensation values will pan
out.
 Establish linkages between Employee engagement score and C-
Sat scores(Work in progress)
What should/could be
measured?
Recruitment

Organization
effectiveness Retention

HR
Matrices
Performance &
Workforce Career
Management

Comp &
Training
Benefits
Critical areas for HR Predictive
analytics
1. Turnover modeling. Predicting future turnover in business units in specific
functions, geographies by looking at factors such as commute time, time since last
role change, and performance over time.

2. Targeted retention. Find out high risk of churn in the future and focus retention
activities on critical few people

3. Risk Management. Profiling of candidates with higher risk of leaving prematurely

or those performing below standard.

4. Talent Forecasting. To predict which new hires, based on their profile, are likely to
be high fliers and then moving them in to fast track programs
Trendwise Analytics – HR
analytics capabilities
Three levels of HR analytics and
reporting

• Reporting of basic metrics, their frequencies & percentages

Level- by various cuts followed by key highlights. These can be
1
Descripti monthly, quarterly, half yearly tracking reports
analysi • Tool:
ve
SAS/REPORT
• Techniques: frequencies , means, percentages
s
etc.

• Derivation of some HR operational metrics which will help

Level- us in tracking the efficiency of HR functions
2
Operation • Tool:
al metric SAS
• Techniques: means, variance, control limits,
ratios, percentages etc.
s

• Predictive analysis based on historical HR data.

Attrition forecasting, performance management,
Level- compensation analysis, survey analytics, new hire
3
Predictive • strategies etc., SAS E-miner,
Tool: SAS BASE,
Excel
• Techniques: Regression analysis, Time series analysis,
analysis
cluster analysis etc.
Stages of
Analytics
Predictive Analytics
What can happen?

Analysis & Monitoring

Why did it happen? What is
happening now?

Reporting
What happened?

Complexity
Types of Analytical
Models PREDICTS
PREDICTIVE
PREDICTS ANALYTICS

Current
Future
Data
Predictive Analytics
PREDICTS

INFERENTIAL
ANALYTICS
Drawing
Analysis & Monitoring Conclusions or
Past Data Inferences
REPORT

DESCRIPTIVE
ANALYTICS
Representation of
Reporting Data and
Summarizing
Critical areas for HR
Predictive analytics

 Turnover modeling. Predicting future turnover in business

units in specific functions, geographies by looking at
factors such as commute time, time since last role change,
and performance over time. One can accelerate hiring efforts
accordingly, reducing lead time time and panic hiring, which
can lead to lower cost, higher quality hiring.
 Recruitment advertising /HR Branding effectiveness: HR
Branding efforts based on Response modeling for advertising
jobs.
HR – Predictive
analytics
 Targeted retention. Find out high risk of churn in the future and
focus retention activities on critical few people
 Risk Management: profiling of candidates with higher risk of
leaving prematurely or those performing below standard.
 Talent Forecasting. To predict which new hires, based on
their profile, are likely to be high fliers and then moving them
in to fast track programs
Tools & Software Used
Typical tools / software:

• Microsoft Excel (max used)

• BI reporting tools

• ERP reporting tools, dashboards

• Statistical software like SAS, SPSS etc.

Social media impact

Day to
Predictive day
ANALYTIC existence
is is now
Predicting
touching being
the future
every exploited
sounds
human on by social
mystical
Earth who media
accesses and then
internet the
analytics
 HCM Analytics consumers by
role Stakeholders across the organization
HR
Needs ad-hoc
Analyst
capabilities to do
sophisticate

MGR
analysis
d
Executives; Corporate planning
and Middle Managers; Line
Strategy Craft and guide Managers Execute on strategic
long workforce
term plan based plans and manage organizational
on given Employe performance to assure strategic
information Needs
e objectives are reached timely and
√x
contextual efficiently
data to better
HR
perform
HRB
P

€$
HR Business ¥
Consult with Partner
Business Units Finance; Controlling;
based on workforce HR HR Give input regarding financial
Budgeting
drives action
intelligence and plans as HR figures and receives insights
final deliverable from the HR Administration; HR for midterm financial
process Recruiting, Staffing, Talent
Functions regarding the
planning
Management and other HR functions workforce
support fulfillment of workforce action
plans
Real world case studies
Starbucks, Limited Brands, and Best Buy—can precisely identify the value of a 0.1%
increase in employee engagement among employees at a particular store. At
Best Buy, for example, that value is more than $100,000 in the store’s annual operating
income.

Many companies favor job candidates with stellar academic records from prestigious
schools—but AT&T and Google have established through quantitative analysis that a
demonstrated ability to take initiative is a far better predictor of high performance on
the job.

Employee attrition can be less of a problem when managers see it coming. Sprint has
identified the factors that best foretell which employees will leave after a relatively
short time.

In 3 weeks Oracle was able to predict which top performers were predicted to leave
the organization and why - this information is now driving global policy changes in
retaining key performers and has provided the approved business case to expand the
scope to predicting high performer flight .
 Real world case studies
Dow Chemical has evolved its workforce planning over the past decade, mining
historical data on its 40,000 employees to forecasts promotion rates, internal transfers,
and overall labor availability.

Dow uses a custom modeling tool to segment the workforce and calculates future head
count by segment and level for each business unit. These detailed predictions are
aggregated to yield a workforce projection for the entire company.

Dow can engage in “what if ” scenario planning, altering assumptions on internal

variables such as staff promotions or external variables such as political and legal
considerations.