When determining your company’s success, it’s common to look towards financials and numerical data. But what about your people data? Employees are the backbone of your company and human resource (HR) data and analytics is just as important to driving success as any other metric. Let’s discuss what people analytics is and how you can leverage it to your advantage.
What is People Analytics?
People analytics measures how well an organization is performing when it comes to its employees. Different companies may refer to it as workforce, talent, or HR analytics.
The idea of HR analytics centers around the ability to measure the success of internal processes such as payroll, employee benefits, recruiting and hiring, onboarding, performance management, and overall morale. Acquiring this data can help organizations determine whether their processes resonate with employees and make better decisions regarding hiring, firing, and promotion. This type of data also helps employers see where employees feel undervalued and how engaged their workforce is.
What are Some HR Metrics?
When pulling data on people analytics, there are some key metrics to focus on.
- Revenue per employee: This measures how much income a company makes for every employee on the payroll. It is calculated by dividing the company’s total revenue by the total number of employees. This metric helps businesses determine how efficient they are at generating revenue for every new hire.
- Time to fill: This metric determines how long it takes to fill an open position. It will help organizations determine how efficient their recruiting team is at sourcing candidates and moving them through the hiring process.
- Turnover rates: This metric includes voluntary and involuntary turnover. The former calculates the percentage of employees who choose to leave the company and measures how well a company is at retaining its workforce. The latter calculates the percentage of employees who are laid off or fired and measures how well a company hires the right people and manages them effectively.
- Offer acceptance rate: This data will determine how effective your hiring team is and how attractive your company appears to candidates. If offers are made and continually declined, this suggests your hiring process needs to be adjusted to better move candidates through, or you may need to take a deeper look into company policies that might be turning away good talent.
- Retention rate: In addition to turnover rate, your overall retention rate is also important to track. This can be done at the company level and manager level to see how well you and your managers are doing at keeping employees from leaving.
- Absenteeism: A company’s absentee rate is the total number of days an employee is absent from work over a specific timeframe. This doesn’t include approved time off such as vacation or PTO. This metric provides insight into which departments or roles have employees calling out of work at a higher rate than others. From this data, you can pinpoint where your team might be feeling overworked, undervalued, or management is not performing optimally.
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When it comes to workforce analytics, there are some best practices businesses should follow to ensure the right data is collected and is done efficiently. The idea is to find inefficiencies in your company regarding the people function and implement the necessary changes to increase morale, retention, and overall satisfaction.
- Encourage data-based decision-making: It’s a good idea to encourage your managers to make decisions based on the data that is provided. Leadership should make reviewing this type of data part of employee performance reviews, budgets, etc. to encourage management to review the data and make recommendations from it.
- Utilize your HRIS platform: One of the best ways to access HR analytics is to utilize your HRIS platform. If your HR team is documenting and storing data in this system, most of the above metrics can be pulled directly from one place, rather than accessing multiple locations and data points.
- Act on the data: It’s one thing to pull the analytics, it’s another thing to do something about what the data is telling you. Companies should use this data to make actionable recommendations and decisions for improvement.
- Include employee feedback: All of the data is based on your employees, so it makes sense to ask your employees directly for their feedback. This can be feedback on the organization (policies, engagement, morale, etc.) or feedback on the specific processes within the company. Your people are your greatest asset, so it’s a good idea to check in with them when determining efficiency and satisfaction.
How Will HR Analytics Help Your Company?
This data can be used in many ways to improve your business. Firstly, it provides ways your company can better serve its employees, which will help retain top performers and provide an edge over your competition. HR analytics help companies save money by determining where processes are inefficient and cost more money. Lastly, it creates greater efficiencies. Gaining insight into how well an organization is performing from the people side helps streamline and improve the efficiency of processes. A good example is the hiring process. By seeing how well your company is managing the process from job posting to hiring to managing, you’ll gain greater insight into where the process needs improvement and is hurting employees and your company.
If you are looking to gain insight into this critical area of your business, VensureHR can help. Our team of HR professionals will guide you through the best practices, ensure proper analysis, and help provide recommendations for improvement. Request a call with us today to get started.