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what is hr analytics
Updated on 20th Dec, 22 422 Views

The following topics will be covered in this blog:

What is HR Analytics?

HR Analytics is defined as a specialized form of data analytics that involves usage of employee-related data and analytical processes to improve HR performance level and employee retention. The data collected is used to help the management make informed decisions with respect to attrition rates and employee retention. 

HR analytics aims at answering the following questions:

  • What is the employee value and retention rate?
  • What is the approximate attrition rate?
  • How many employees deserve a promotion?
  • What is the employee turnover rate?

Now, to answer these questions, various types of datasets are studied and analyzed by HR analysts. When an organization gets thoroughly involved in collecting HR data and drawing insights out of it, the organization is said to be actively engaged in HR analytics for the betterment of its employees.

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Use of Data Analytics in HR

The HR management teams of every organization have some challenges and problems in common. Few of the major HR issues in any given company are higher employee attrition rates, performance issues, compensation planning, career development initiatives plans etc. There might be instances where an employee might have performed well consistently but due to lack of appreciation has left the organization. This is a serious concern for any organization that values its employees. Lack of proper HR decision making leads to employee dissatisfaction and disengagement. The usage of data analytics has therefore helped a lot in effective human resource management. Companies are leveraging the benefits of HR analytics to plan bonuses, salary jumps, promotions as per the performance of the employees. Also, since data analytics helps in a data-driven HR decision making, you can better understand and relate to your workforce. 

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Examples of HR Analytics

To better understand the use of analytics in HR activities, let us consider the below real-life examples: 

  • So, an HR manager will use HR analytics if they want to have deeper insights into the contribution of employee engagement in the overall financial performance of the organization. For the analysis, data regarding the performance of the employees for a given period will be collected; the organization’s financial performance data will also be collected for that period. Many other types of data will be collected, and all this data will be analyzed. Not only will this help in identifying the underlying reasons, but it will also help the HR department to formulate better employee engagement and performance management policies in the future. 
  • Similarly, analytics also assists the HR teams in hiring and recruitment. To hire for a particular role, the data related to the role and candidate details will be fed into the system. The pre-programmed algorithms will help the HR team and recruiters by giving out the suggested shortlisted candidates whose profile matches the role. This helps in both hiring the right candidates and saving a lot of time by avoiding multiple interviews. 
  • For example- say a particular department in the organization is facing a consistent rise in employee attrition. HR analytics will help in identifying the cause by analyzing the historical data related to ex-employees, the feedback given by ex-employees, employee profiles and performance etc. There might be a possible mismatch between the job role and the candidate hired which made him/her leave the organization. There might be many reasons that HR analytics can identify. 

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Benefits of HR Analytics 

HR management is one of the key concerns for any organization as human resources form the backbone of the entire system. Hence, the usage of HR analytics has increased over the last few years for its varied benefits and outstanding results. A few of the important benefits of HR analytics are discussed below:

Quality Recruitment 

One of the important aspects of HR management is hiring good quality talent. However, the hiring process can be very long and the talent acquisition team has to take care of a multitude of different aspects, which keeps them busy. Amid all this, what can be done to hire the right candidate and ensure that they join and stay for a long period of time in the organizations. Well, these questions are answered and taken care of by HR analytics. For example, the talent acquisition managers can analyze how many candidates to reach and what type of profiles to shortlist for a specific role. 

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Reduced Attrition Levels

These days, employees are preferring to leave organizations within a short span of time. Why? There can be many reasons behind this, but it is crucial for you to know the reason behind employee attrition in your organization. HR analytics identifies the hidden patterns and trends by using employee-related data to answer why employee retention is high in your organization and what are the factors behind the same. Not only this, HR analysts make use of different data to suggest ways to decrease the attrition rate. 

Builds a Productive Workforce

It is widely known that productivity levels can never be constant given that all employees are different from one other. However, HR analytics helps in arriving at an approximate productivity level. By using various types of employee-related data, such as total hours worked, overtime hours, leaves, target achievement , profits, etc., HR analytics draws insights regarding whether an employee has been assigned more work than usual or is underperforming by delaying the assigned work. All these factors help in charting out suitable employee productivity strategies for increased performance. 

Achieves Employee Trust

For example, you implement a new strategy and wish to know the employee reaction; HR analytics can help you with this by collecting the data of each employee’s reaction. Based on the result of the data and the analysis, the HR management can work toward boosting employee satisfaction. This not only helps in formulating effective HR policies, but also inculcates a sense of belongingness in the employees and they start trusting their organization.

Starting with Predictive Data Analytics

Predictive Analytics as we all know analyzes past and historical data to make predictions and forecasting for the future. Predictive analytics is used in HR analytics to get actionable insights on improving human resources related processes and data-driven decision making. All the past data related to HR is collected, processed and analyzed to make predictions regarding which employees have the probability of growing up the ladder and bringing profitability to the business. Predictive analytics can also help in forecasting the long term results of new or existing employee appraisal parameters. Sometimes, HR analysts also help the management by forecasting the organizational performance growth by using predictive analytics. Not only this, using predictive analytics, the HR management has a sound estimation of which employee is going to contribute how much in the overall organization profits in a given period of time. This is how predictive analytics is being leveraged by HR managers in the majority of the organizations. 

Popular HR Analytics Market Trends 

So far, we have discussed how HR analytics has helped a majority of organizations. Hence, at this point, it becomes important to know what are the future market trends in HR analytics. The following are some of the popular HR analytics market trends:

  • The global HR analytics market is expected to grow at a compound annual growth rate of 14.2 percent, from 2020 to 2027, to reach US$6.29 billion by 2027. 
  • Millions of organizations around the world are expected to witness an increase in artificial intelligence (AI) and machine learning (ML) in HR analytics, thus paving a way for even more job opportunities for data analytics professionals and HR analytics solution vendors
  • The banking, financial services, and insurance (BFSI) sector is expected to be the highest market shareholder in the global HR analytics market.

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Top HR Analytics Organizations

With the increase in the opportunities in the HR analytics market, many HR analytics organizations have been founded in the last few years. However, the top ones on the list are SAP, Oracle, Infor, Visier, TALENTSOFT, Kronos, MicroStrategy, IBM, Tableau, Zoho, Workday, Sage Software, Crunchr, GainInsights, and Sisense. 

Who is an HR Analyst?

An HR analyst is just like a data analyst but is called a functional data analyst. An HR analyst majorly focuses on the HR data of an organization and helps in improving the overall organization’s workforce performance by collecting and analyzing HR data. A majority of an HR analyst’s time and performance involves talent analytics, people analytics, or even workforce analytics.

Roles and Responsibilities of an HR Analyst 

Now, let us understand in detail what are the roles and responsibilities performed by an HR analyst in an organization:

  • To collect and analyze past data for identifying underlying causes and trends in employee attrition
  • To collate data regarding HR productivity and engagement
  • To understand new employee behavior through data analysis
  • To draw insights out of the data and report the findings to the management
  • To correlate various types of data and understand the patterns behind important concerns such as low employee performance, compensation revision, etc.
  • To create predictive models for better understanding employee behavior, employee performance, etc. 
  • To develop HR strategies and make decisions to improve the overall performance and employee satisfaction level.

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Career Transition


In this blog, we have understood what HR analytics is, the roles and responsibilities of an HR analyst, benefits of HR Analytics, etc. HR analytics may not be a well-established domain yet, but it has a lot to offer in the coming future for organizations and their employees. HR analytics is here to stay and is going to make better and healthier workplaces.

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