HR ANALYTICS

COURSE OBJECTIVES
 To introduce the student to the theory, concepts, and
business application of human resources research, data,
metrics, systems, analyses, and reporting.
 To develop an understanding of the role and importance
of HR analytics, and the ability to track, store, retrieve,
analyse and interpret HR data to support decision
making.
 To aware the challenges human resources analytics for
the competitive advantage of the organization.
 To enable students to use applicable benchmarks/metrics
to conduct research and statistical analyses related to
Human Resource Management.
COURSE OUTCOMES
 Have an understanding of How HR function adds value
and demonstrates the value in business terms
 Measure the value of Intangibles that HR helps builds for
the organization given a particular business context to
facilitate decision making.
 Convert soft factors in a people management context
into measurable variables across various domains.
 Devise, conduct and analyze a study on employees or any
other related to the HR context in an organization.
HR Analytics in Perspective

Module 1
ROLE OF ANALYTICS
 Data-driven decision-making
 Competitive advantage
 Improved performance
 Better customer insights
 Risk management
HR ANALYTICS
 HR analytics is the process of collecting and analyzing
Human Resource (HR) data to improve an organization’s
staff performance.
 HR Analytics refers to the application of analytic logic to
the HRM Function.
 Analytics implies in itself the Art and Science of data
universe. Here Art teaches as how to look at the data in
different patterns and Science supports in application of
the data in various domains.
 HR analytics: HR analytics specifically deals with the
metrics of the HR function, such as time to hire, training
expense per employee, and time until promotion. All
these metrics are managed exclusively by HR for HR.
.
 People analytics: People analytics, though comfortably
used as a synonym for HR analytics, is technically
applicable to “people” in general. It can encompass any
group of individuals even outside the organization. For
instance, the term “people analytics” may be applied to
analytics about the customers of an organization and not
necessarily only employees.
 Workforce analytics: Workforce analytics is an all-
encompassing term referring specifically to employees of
an organization. It includes on-site employees, remote
employees, gig workers, freelancers, consultants, and any
other individuals working in various capacities in an
organization.
Features
 Real Time Reporting
 Predictive Capabilities
 Automated data gathering
 Recruitment planning
 Flexibility
 Protected Data
Value – Levels/Types of Analytics
 Descriptive(What happened, why it happened?)
 Organize, Display
 Predictive (What will happen?)
 Relate, Model
 Prescriptive(What to do?)
 Evaluate
Role of HR Analytics
 Enhance organizational efficiency
 Achieve competitive advantage
 Maximization of resource utility
 Establish the best alternatives
 Support decision making process of organization
 Leverage cost effective methodologies through analytics
 Building effective strategies for human resource management
 Business Intelligence & Market Research (Where should we
locate a new manufacturing plant?)
 Customer Intelligence (Who gets the latest catalog or
brochure?)
 Pricing strategies & optimization (How much should we charge
for a particular item?)
Importance
 Analysis of data can uncover correlations and patterns. There’s
less need to rely on guesses or intuition. And it can help
answer the following types of questions:
 What happened?
 How or why did it happen?
 What’s happening now?
 What is likely to happen next?
 With faster and more powerful computers, opportunity
abounds for the use of analytics and big data. Whether it’s
determining credit risk, developing new medicines, finding
more efficient ways to deliver products and services,
preventing fraud, uncovering cyber threats or retaining the
most valuable customers, analytics can help you understand
your organization – and the world around it
Three Waves
 1. Lead the Value
 2. Manage the Value
 3. Market the Value
WHAT WILL BE FOUND IN THE THIRD
WAVE HR?
 HR will be the host for the departments that will answer
questions on how to create the utmost efficiency.
 Big and Small data will both be handled.
 Analysis based on data will play a great role as a decision-
support mechanism in all processes from hiring to firing.
HR Analytics will become one of the most important
units of HR.
 The employees of these units will include graduates of
natural sciences and engineering just as much as social
sciences.
 The most important difference of the HR analytics will be
their shedding light into the future. Otherwise, HR today
also uses employee data and analyses it to understand the
past and the future.
 HR analytics will make predictions for employee loyalty
or quitting rates using foresight models and developed
artificial intelligence systems to look at today’s picture.
HR Value Chain
1. Efficiency
 Workforce planning:- Aligns changing organization
requirements with individuals' strategies. It can be the
most effective activity an organization can engage in. It
doesn’t need to be complicated and can be adjusted to
suit the size and maturity of any organization. It can
provide market and industry intelligence to help
organizations focus on a range of challenges and issues,
and prepare for initiatives to support longer-term
business goals.
 Recruitment and selection: Process of identifying the
need for a job, defining the requirements of the position
and the job holder, advertising the position, and choosing
the most appropriate person for the job.
 Training : Training and development refer to instructive
activities within a company shaped to enhance the knowledge
and skills of employees while providing information and
instruction on how to perform better for specific tasks.
 Talent management : For Most companies, talent
management is a long-term business strategy. If any firm can
retain its employees at the optimum level it would have an
impact on their business. Because it's only human resources
that are required to run machines or any other task.
 Coaching : Coaching is a sophisticated management style that
requires developing a relationship that empowers employees
by building confidence and competence.
 Organizational Design : Process of aligning the
structure of an organization with its objectives, with the
ultimate aim of improving efficiency and effectiveness.
 Industrial Relation : Relations and interactions in the
industry particularly between the labor and management
as a result of their composite attitudes and approaches
regarding the management of the affairs of the industry,
for the betterment of not only the management and the
workers but also of the industry and the economy as a
whole.
2. Effectiveness
 HRM outcomes : The goals to achieve with the HRM
activities. We recruit, we train, and we compensate to
achieve certain goals/ outcomes. These outcomes include
employee satisfaction, motivation, retention, and
presence.
 Employee Engagement : How committed your
employees are to the organization.
 Retention : How long do employees want to work in
the particular organization? HR analytics is working on
the past historical data using the step of descriptive
analytics and predicting the future based upon the past
incidents and then prescribing some functions how to
avoid retentions issues in the future.
 Competency Level : How competent the employees
are in the organization? Competency level in the
organization will help you to do workforce planning and
using HR analytics will help the manager to meet the
future demand of the origination appropriately.
 Workforce cost : How much cost does the employer is
bearing to recruit, maintain, and retain the employees in
the firm? If a firm is making an attempt to measure the
cost of the an employee it starts before an employees
enters into the organisation .There are various costs that
is measured like: Cost per hire, cost per source,training
the new joinee ,induction cost ,interview cost etc
3. Organizational Objectives
 Profit : Profit is considered as the gain amount from any
business activity. Whenever an employer hire one
employee he is looking forward for the returns that he
will receive after hiring that person. Basically, when
employer earned more money from the employee .This is
called Profit which describes the financial benefit realized
when revenue generated from a business activity exceeds
the expenses, costs, and taxes involved in sustaining the
activity in question.
 Market value : To calculate the market value of a
company, you would take the total shares outstanding and
multiply the figure by the current price per share. For
example, if ABC Limited has 50,000 shares in circulation
on the market, and each share is priced at $25, its market
value would be $1.25 million (50,000 x $25).
 Market share : A company's market share is its sales
measured as a percentage of an industry's total revenues.
You can determine a company's market share by dividing
its total sales or revenues by the industry's total sales
over a fiscal period. Use this measure to get a general
idea of the size of a company relative to the industry.
 Turnover : It is defined as the rate at which employees
are leaving your organization. Is one of the important
goals of HR analysts/HR managers to always maintain the
attrition level in the organization. Because high turn over
in the company is reflecting s big problem in the firm
because if good employees are leaving the organization it
would have poor impact on profits.
 Moral values : Ethical values and Business ethics include
Honesty; Integrity; Responsibility; Quality; Trust; Respect;
Teamwork; Leadership; Corporate Citizenship;
Shareholder Value; social ethics, moral modes, a customer-
centric focus, employee satisfaction, customer satisfaction
and finally leading to sustainable business
LEAN ORGANIZATIONAL SYSTEM
 A Lean system describes a business or business unit that
holistically applies Lean principles to the way it plans,
prioritizes, manages, and measures work.
 Two of the fundamental concepts of Lean:
 Eliminate anything that does not add value to the customer
 Work systematically and continuously to create more value for
the customer
KEY PRINCIPLES OF LEAN SYSTEM
 Optimize the whole -Visualize, optimize, and manage
the entire organizational value stream as one value-
generating system.
 Create Knowledge - A Lean system is a learning
system, it grows and develops through analyzing the
results of small, incremental experiments
 Eliminate Waste - Eliminating any process, activity, or
practice that does not result in more value for the
customer
 Build Quality in - Lean organizations set themselves up
for sustainable growth by building quality into processes
and documentation. They automate and standardize any
tedious, repeatable process or any process prone to
human error, which allows them to error-proof significant
portions of their value streams.
 Deliver Fast - In Lean, flow refers to the manner by
which work moves through your organizational system.
Good flow describes a Lean system with a steady,
consistent flow of value delivery, while bad flow describes
a system with unpredictable delivery and unsustainable
habits.
 Defer Commitment - This Lean principle says that
Lean systems should function as just-in-time systems,
waiting until the last responsible moment to make
decisions and deliver work.
 Respect People - Lean systems are designed to
maximize customer value while minimizing waste, out of
respect for the customer. Out of respect for employees,
Lean systems encourage environments that allow
everyone to do their best work.
Locating the HR challenge in the system
 Tracking Time & Attendance
 Quiet Quitting
 Attracting High Quality Talent
 Employee Engagement & Well being
 Measuring HR Effectiveness
 Compensation & Benefits
HR Analytics Metrics
 Revenue per People
 Offer Acceptance rate
 Training efficiency
 Training expense per employee
 Involuntary & Voluntary Turnover rate
 Time to hire
 Time to fill
 Human capital risk
 Absenteeism