Chapter 5 HR Metrics and Analystics

HR metrics and workforce
analytics
Data/numbers giving details about given
process or outcomes
What are Metrics to measure/ analytics means a

method of logical analysis
HR
metrics?
Metrics tell managers whether they are
reaching goals and what the problems are
Helping identify trends and HR planning

History of HR metrics and analytics
1. 1978
An article titled ‘The measurement imperative’ proposed the idea of measuring the impact of HR activities with collected data on the bottom line of the business. The
proposed activities included staff retention, staffing, compensation, competency development, etc.
The idea marks the beginning of the data capturing activity in HRM and its application in organizations.
2. 1990
With growing development in the field of and HR measurement integration with more business dimensions, the predictive and assessment models became a subject of
study. But still, the field of HR analytics remained unknown to many organizations and they couldn’t realize its potential.
The developments leading to the concept of ‘Bench-marking’ to compare the HR measurement data in various functions and with other companies. Though companies
soon realized that while in theory ‘Bench-marking’ promises to provide strategic business insights, in real business scenario it fails to do the same and Bench-marking
lost its recognition by early 2000.
3. 2000
The emergence of HR accounting and utility analysis was witnessed and this added new dimension and measurement data to quantify HR. Researchers not only drew
the inference from business firms but from other sources too. One such research is on the metric model adopted by Billy Beane, the general manager of the USA
baseball team to select team members.
The study led to a breakthrough metric-based selection model development called as ‘Moneyball’ concept in 2003 and found its adoption at large scale by
organizations since 2006.
Limitations
of traditional
HR metrics
Limitations
of traditional
HR metrics
1. Emphasis on
readily available data
from accounting
systems
But every managerial

decision has cost and
benefit consequences
Limitations
of traditional
HR metrics
2. Metrics tented to
sum data to the
organizational level
(too general)
Limitations
of traditional
HR metrics
3. Only provided
data after events
had occured
Difference
Between HR
HR Analytics
This is the branch of analytics tasked exclusively with metrics of the HR function. It
Analytics,
covers functions like training expense per staff, time duration until promotion and
time to engage talent.
People Analytics
People Technically, this has to do with analytics about people that is all-encompassing. It
captures not just the employees of an organization but also customers of the
Analytics,
organization.
Workforce Analytics
Workforce This arm of analytics specifically addresses employees of a business concern like
remote employees, on-site staff, freelancers, consultants, gig workers, and all other
personnel employed in various capacities. Here statistical methods and metrics are
Analytics applied to the performance of workforce talent.

The key differences per the three terms are that HR analytics covers a broader scope
of data while people analytics and workforce analytics has to do with data metrics
exclusively related to people and their behavior.
Improves HR performance: HR performance can be improved by one major factor: better decision
making. HR analytics is important because of the increased need for data which makes this
possible.
The Identify the best performing talent: Critical insights can be gained from accessing and analysing
data collated about a company’s workforce. A key example of this is the identification of the best
performing personnel in an organization.
importance Identify attrition and its causes: Employee data can reveal and expose departmental units
of HR
suffering from maximum attrition, patterns of attrition, identify commonalities and isolate root
causes.
analytics Predict in-demand skills and positions within the organization: HR analytics data can help you as
a practitioner determine accurately skill and positional requirements within your organization.
Transforms the role of HR as a strategic partner: HR analytics places the HR department in a

unique position to influence personnel matters within an organization. This is because employee
data grants valuable insight thus empowering human resources tremendously. HR can furnish the
company executive with accurate, tested, verifiable data to back up policies undergirding staff
recruitment, retention, and engagement.
The difference between HR
metrics and HR analytics
HR Metrics HR Analytics
Metrics handles tangible data, which is easy to measure but is of low Analytics, on the other hand, is mainly concerned with intangible
value. data, which is hard to measure but is of high value.
Metrics give information. This puts the spotlight on monitoring and Analytics takes into consideration both past and present data, which
presenting historical data like website visitations, the volume of helps to grant HR practitioners a great deal of insight, optimizations
candidate applications, number, and types of recruitment campaigns and enables them to forecast.
undertaken yearly.
Metrics can furnish you with an insider perspective on a business due Analytics gives an outside-in viewpoint due to the use of both
to the use of data from in-house sources. external and internal sources.
Data
required
by HR
analytics
tools
How to collect HR metrics?
1. Review business strategy and both long- and short-term goals with C-suite executives to ensure HR is aligned
with these objectives. Identify how HR will contribute to achieving those goals, and pinpoint which
measurements will provide targeted, relevant information about how those functions affect business objectives
and strategies.
2. Define each HR metric and its formula. Not all organizations define metrics the same way or use the same
formulas. For example, some companies measure the cost for each new hire without including payment for
recruiters as a related expense.
3. Determine what data must be collected, what collection methods are available and how the data will be
gathered. For instance, will all data for cost-per-hire be captured in human resource information systems? Or
will some data need to be obtained from another department?
4. Decide how often HR metrics information will be collected and reported. Will it be monthly, quarterly or
annually?
5. Choose what format will be used to report the data and who will receive the report. Will the data be part of a
regular operations report or scorecard? Will it be a stand-alone document? Who will receive the report?
6. Review what is being measured on a regular basis to ensure that HR is providing relevant information. Have
goals changed? Does HR need to be providing different metrics to support business objectives?

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HR metrics and workforce

What are Metrics to measure/ analytics means a

Helping identify trends and HR planning

But every managerial

Analytics applied to the performance of workforce talent.

Transforms the role of HR as a strategic partner: HR analytics places the HR department in a

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