The Human Resources field is witnessing the rise in the use of HR analytics.

The power of HR analytics is enabling practitioners to ditch their “gut feeling” for any decision to make — which was the trend earlier — and take more informed and data-backed decisions for hiring.  

Unfortunately, raw data on its own cannot provide any useful insight

So, let’s first understand what HR analytics for HR really means. 


HR analytics can be defined as the collection and analysis of workforce raw data in order to understand workforce functionality and determine how it can be optimized to reap better results and reach organizational goals. 

Once organized, compared and analyzed, this raw data provides useful insight.

Doing so provides measured evidence of how HR initiatives are contributing to the organization’s goals and strategies.

It can help answer questions like:

  • What patterns can be revealed in employee turnover?
  • How long does it take to hire employees?
  • What amount of investment is needed to get employees up to a fully productive speed?
  • Which of our employees are most likely to leave within the year?
  • Are learning and development initiatives having an impact on performance?

Having data-backed evidence means that organizations can focus on making the necessary improvements and plan for future initiatives.

With the ability to answer important organizational questions without any guesswork, it is not surprising that many businesses using HR analytics are attributing performance improvement to this milestone.

That said, here are 9  key benefits of implementing HR analytics in your organization. 

1. Improved Hiring Decisions

HR analytics helps HR professionals make better choices based on historical data. Through HR analytics, the recruiter and hiring team can make data-driven hiring decisions rather than “trusting their gut” and hoping for the best. 

Effective HR analytics can enable HR professionals to easily determine the best candidates and hire them.

For example,­ if you hired 10 candidates and four out of them belonging to a particular university could not qualify beyond a level, perhaps you will not hire someone from the same university again.

2. Effective Training and Development

Training is a necessity for any organization to constantly grow. Gaps in the process of training can increase the cost to the company and give rise to unwanted challenges. Various professional development programs offered by companies, if not handled properly, can deplete a major chunk of the company’s budget. 

Analyzing training metrics can be very instrumental in achieving such things as operational efficiency in the organization.

For example, an employee might currently be missing 30% of their deadlines. If an employee training program is deployed to address this specific issue, there should be a noticeable improvement e.g. a decrease to 5%.

3. Performance Management

With HR analytics and key performance indicators (KPIs), you can assess the Retune on investment (ROI) of all employees. It helps you identify your top performers (and use these as a benchmark when making new hires) and those who are struggling (and offer them support). A better understanding of motivation, productivity, and efficiency can help all employees improve their performance and contribute to the bottom line. 

A good example of tracking employee performance would be to correlate the rate of absenteeism and output. Absenteeism and performance are two highly correlated constructs. Highly motivated and engaged employees take in general fewer absent days. Additionally, absent employees are less productive and high rates of absenteeism throughout an organization are a key indicator of lower organizational performance.

4. Managing Employee Turnover

HR analytics can easily help identify and demystify the causes and patterns of attrition among employees. It can help answer some of the questions below:

  • which employees are leaving and why?
  • What is your retention rate?
  • which departments have a higher-than-average turnover?
  • why are there early attrition rates for new hires?
  • which employees are most likely to leave in the future?

The reasons could range from under-performance, lack of skills, overworking, low compensation, poor leadership, toxic work environment, et cetera. 

HR analytics helps in finding the gap areas where employees are finding difficulty in meeting goals and targets. HR professionals can use various methods like employee surveys, team assessments, and exit and stay interviews to find out the reason for attrition and map out strategies to retain them. 

5. Achieving Competitive Remuneration

Analyzing compensation data allows you to spot any pay disparities and fix them to ensure you’re achieving internal and external pay equity. It can also help you determine which benefits are most valued by your employees. Then, you can adjust your reward packages accordingly.

HR analytics can help HR Professionals make informed decisions such as whether an additional bonus percentage leads to improved retention or improved performance or whether it makes no noticeable difference.

6. Effective Manpower Planning

HR analytics enables companies to remain ahead of the game by forecasting and preparing for future workforce demands.

For example, predicting attrition rates using the available data helps organizations improve their workforce planning, particularly for critical roles within the business.

7. Conducting Training Needs Analysis

The richness and depth of HR analytics software mean it can use algorithms to identify skills gaps within current teams. Your team’s existing skills can be plotted on a grid against the skills you need.

That can help you identify weak spots and propose a plan to bridge these. Gaps like these often harm employee engagement, morale, and turnover rates if left unresolved.

8. Improved Workplace Safety

Workplace safety is a priority for all organizations. A safe workplace means fewer injuries at work for employees and saves the company money in injury-related costs and compensation. Using your safety incidents data, you can prevent future workplace injuries and create a safer work environment for all your employees in the process.

9. Uncovering Ongoing Trends in the Workplace

Most HR analytics platforms today utilize machine learning to spot patterns that the human eye easily misses. Such a platform can also help produce reports on areas and issues that may otherwise go overlooked. Patterns related to behaviour, performance, work hours, overtime et cetera can all be observed and reflected on.  

Analysing such factors as the overtime worked by staff over a period of time can help the management manage fatigue in the workplace and even mitigate some work-related incidents from happening.


We’re experiencing monumental changes in the Human Resources landscape. Organizations are realizing they need to embrace a data-driven culture to compete with others and attract top talent. 

Data analysis has become a necessary tool to move beyond gut feeling in recruitment. Although, it comes with its own challenges.

Once consensus is gained by removing peoples’ apprehensions to move beyond traditional ways, then human resource management solutions will need to be chosen with care to ensure goals are met. 

With analytics, we can now understand patterns and accelerate business through automation. Resume parsing, for example, fast-tracks the screening process by identifying the candidates with the apt skills and education with existing data. 

This method of data analysis takes data that is routinely collected by HR and correlates it to HR and organizational objectives. Doing so provides measured evidence of how HR initiatives are contributing to the organization’s goals and strategies.


HR analytics is becoming an indispensable tool for organizations to make better decisions.

That’s why every HR professional must have a good level of data literacy to help their organizations reap the benefits of HR analytics.

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