HomeContributionsThe Crucial Roles of HR Analytics and Why Your Company Needs It

The Crucial Roles of HR Analytics and Why Your Company Needs It


This article was contributed by Ignas Mingaila who works as a SEO specialist at coresignal.

Regardless of which industry your business belongs to, your company must have an HR sector. Whether you run a small family business or a large international enterprise, you must understand the importance of a good HR sector. 

Although the primary responsibility of HR experts is to onboard new hires, professionals in this field have numerous other duties as well. For instance, companies using HR analytics can streamline all processes and tasks related to the HR field. 

The key roles of HR analytics have the power to transform your business and that’s why your company needs it. If you’d like to learn more about how HR analytics can accomplish that, keep reading. 

What is HR analytics? 

First things first, let’s define what HR analytics is. 

Human Resource analytics, or simply HR analytics, focuses on analyzing people and applying analytical processes to employees within an organization. 

Why would anyone do that? 

By looking at HR analytics insights, the primary purpose of HR analytics processes is to improve employee retention, motivation, and performance. 

That means HR analytics doesn’t collect information about your employees’ professional performance. Instead, it only focuses on gathering data necessary to make informed decisions on improving these employee-related processes and secure better working conditions for everyone involved. 

HR professionals can even use predictive HR analytics to gain insights from historical workforce data. They can identify trends, forecast employee performance, satisfaction, and well-being, optimize HR initiatives, and reduce turnover. 

While HR experts can collect the necessary data, they are often lost when it’s time to analyze it and extract valuable information.

Luckily, that is where HR analytics comes in handy, as it can quickly provide company executives with accurate, reliable, and unbiased data. 

Essential metrics of HR analytics 

Companies using HR analytics can measure all kinds of HR metrics. However, the most important include the following. 

  1. Revenue per employee 

One of the essential HR analytics metrics is each employee’s average revenue. Since revenue is the core of all the other activities that take place at a company, revenue data can help company executives determine how efficient their organization is. 

  1. Offer acceptance rate

The offer acceptance rate showcases the ratio of accepted job offers and given job offers in a specific period. The higher this ratio is, the better. Generally speaking, anything above 85% indicates a favorable offer acceptance rate. 

  1. Training efficiency 

Measuring training efficiency is essential for determining the effectiveness of a training program. This metric includes measuring test scores, performance improvement, and employee transition after training completion. 

  1. Training expenses 

Closely related to training efficiency, measuring the cost of training expenses also plays a vital role in determining how effective a training program is. If you struggle with higher training expenses, consider calculating and re-evaluating the necessary costs per employee. 

  1. Turnover rate 

The turnover rate can be voluntary or involuntary. The voluntary turnover rate shows how many employees chose to leave their positions. 

On the other hand, the involuntary turnover rate measures how many employees a company has terminated. The data from both turnover rates can help HR experts improve their future recruitment strategies. 

  1. Time to fill 

Time to fill measures the number of days that pass from publishing a job opening to filling in the position.

Time to hire measures the total number of days that pass from approaching a candidate to accepting them as an employee. By measuring the time to fill/hire, companies can optimize their recruitment techniques and alter where necessary. 

  1. Absenteeism 

Finally, absenteeism shows the number of missed working days per employee. Measuring absenteeism can tell a lot about the general employee health as well as employee happiness and motivation. 

What data to use for HR analytics 

Specific data is required for obtaining valuable information through HR analytics. Companies using HR analytics typically use the following internal and external data to improve their analytics processes. 

  1. Internal data 

Internal data is information an HR department gathers within the company. The information they can collect data through internal HR systems includes: 

  • Employee compensation; 
  • Employee tenure; 
  • Employee training records; 
  • Performance appraisals. 
  1. External data 

Contrary to internal data, external data comes from working with other company departments. You can also collect external data outside the organization. It incorporates: 

  • Financial data: financial aspects of a company and its employees, including the employee revenue and the cost of hire; 
  • Organizational data: the type of organization and products or services a company offers to its clients; 
  • Employee passive data: employee data acquired through surveys, questionnaires, feedback sessions, or social media posts; 
  • Historical data: records from past events to determine patterns in staff behavior and examine political, economic, and environmental events on a global scale.

The bottom line 

As you can probably tell, companies using HR analytics can enjoy numerous beneficial properties of HR analytics. 

From calculating the revenue per employee to determining the level of absenteeism present in a company, HR experts can transform companies they’re responsible for simply by considering HR analytics data when making important decisions. 

So, don’t allow your HR team to miss out on the opportunity. Invest in an HR analytics tool today and help your company grow by securing a happier and healthier work environment for your staff.


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