Digital Analytics: The New Buzzword in Human Resource Management

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Digital analytics is the advanced use of data from your business and the competition to improve business processes. Careful analysis of data about new hires help to implement strategic steps to improve productivity of new hires and reduce mediocrity. This could include simple surveys such as an online feedback form on the current onboarding methods or questionnaire about the bottlenecks faced in the current role.

Today, there is an increasing need for leveraging accurate and timely information in organizations. This is all the more true for the HR function, as it can provide compelling competitive advantage to the organization.  Developing a culture – and capability – of evidence-based decisions requires the right infrastructure, optimized business processes, data quality & governance systems, and analytic capabilities. Today’s digital analytics tools not only enable managers to gain insights on current workforce performance, costs and services, but to also model “what if” scenarios to anticipate changes in business. But, firms need to follow some basic steps and emerging best practices to take full advantage of this next generation of HR tools.

It involves the process of aggregating data from numerous systems, cleaning it, reconciling hierarchies etc. to explore patterns among metrics and investigate root causes of downstream outcomes. In doing so, human resources leaders obtain data-derived insights which enable them to make informed decisions rather than basing their decisions on experience, anecdotal feedback from direct reports, or leading practices.

The key questions that HR professionals should ask in concordance with their IT team are “What information do we need to run our business and make better decisions that we don’t have today?” and “What are the business processes, workflows and data definitions we need to put in place to generate that information?”  Many companies have the basic data in place and the question they are now facing is, how to use this to manage our business better. The simplest way that a HR department can use data analytics is by using a couple of datasets as a measure of workforce performance in certain areas, according to Davenport – such as measuring levels of employee satisfaction by analyzing employees’ willingness to recommend their office to others as a good place to work. By collecting and analyzing a large amount of data about staff members, businesses can also identify more accurately who is likely to be a high-flier or an underachiever.

BusinessWeek Research Services found that “… when HR uses fact-based decision making – instead of intuition or best guesses – the group becomes a more credible partner to the business it serves.  Fact-based decisions help HR improve HCM practices, recruit and deploy the right talent, cut costs, contribute to business performance and provide evidence of those contributions.”

As we enter a new economic reality and, in turn, a new reality in the labor market, the ways in which people-related data are utilized will be critical to mitigating risk, creating business capability and driving outcomes such as customer satisfaction and sales.

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