HR Analytics Challenges & How to Overcome Them

hr analytics

HR Analytics Challenges are usually very pragmatic for those in charge of developing such an ecosystem or function. Before discussing the most common real challenges, it’s important to understand the purpose and value of People Analytics.

In a nutshell HR Analytics helps companies improve performance.

Implementing an analytics approach in HR can bring real quantifiable value to your organization. According to McKinsey & Company using People Analytics will bring:

  • 80% increase in recruiting efficiency
  • 25% rise in business productivity
  • 50% decrease in attrition rates

Many HR professionals face real, pragmatic challenges when implementing an Analytics approach in people related decision making process.

The first challenge is related to metrics.

The Metric Challenge revolves around the question: What & how should we measure?

The main challenge is finding those metrics which are relevant to the company’s business context and objectives. Also, another nuance of the question is related to finding those metrics that focus on quality and offer insights regarding improvement areas. 

Quantitative metrics and benchmark values put pressure on the HR department. Pressure which may not necessarily bring value. In HR it’s more about quality and constant improvement then quantity and simple benchmarking. Being relaxed that your employee turnover rate is lower than sector’s average might not be the best idea. 

Last but not least, many business managers would like a clear ROI for people related measures.

This leads us to the next real challenge: 

The perspective challenge: 

To put it bluntly, many companies would like to go from no real analytics environment directly to a predictive analytics model. In other words, companies would like to go from a siloed and disperse measuring directly to an approach based on a multidimensional complex analysis of the past trends combined with advanced statistics, machine learning and artificial intelligence able to predict the future. Because many of business managers see the huge gap between the two, another issue arises: the data issue.  This is usually seen as an approach oriented mainly towards data collection. The approach is justified by the complexity needed to understand people issues. The result of this perspective is, in most of the cases, the lack of action towards data analysis. This is a trap. It’s a trap because the road to people analytics has another path.

We truly understand these challenges so, we designed HR Analytics Library.  Our purpose is to create a straightforward tool about metrics & best practices.

Implementing an Analytics approach in HR is a process which can have the following main steps:

  1. Run a Report & KPI Assessment – understand: which are the metrics and reports you are currently measuring; why and who are the users digesting the info; what other dimensions, metrics and reports are a “must have”
  2. Run a Data Assessment – assess the data ecosystem; put an emphasis’s on quality and availability of data necessary for the reports identified in step 1
  3. Design a Report & KPI Catalogue – based on step 2 decide upon the new report & metric ecosystem
  4. Update data governance policy
  5. Implementation
  6. Education

Our HR Analytics Library can act as a Report & KPI catalogue and a very good tool for education.  

Remember: don’t overcomplicate things.

Also, the journey towards predictive analytics is an iterative journey that starts with the basics and in time builds a complex data and insight ecosystem.

  • In the first stage, you should satisfy your company’s need for operational reporting. 
  • Afterwards build the capability to analyse data fast on different business issues.
  • Third, build data models and integrate advanced statistics.

Integration of machine learning, artificial intelligence should be an objective but in real life you cannot achieve it if you’re not mature enough on data and KPI use. So, start educating yourself regarding what machine learning & AI can do for your company and plan your way for this step.

Another key activity to succeed with People Analytics is upskilling your HR professionals, management and leadership teams.

HR Analytics Library offers pragmatic content to overcome the Metric & Perspective Challenge. Join Us!

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