HR Analytics

HR Analytics Concept

 HR analytics, also known as people analytics or talent analytics, is a data-driven

approach to managing human resources.

 It involves the systematic collection, analysis, and interpretation of HR data to

improve HR functions, optimize workforce-related processes, and drive
organizational success.

 It aims to provide insights into HR processes, employee performance, and the impact
of HR practices on business outcomes.

 It helps in making informed decisions related to recruitment, selection, training,

performance management, and other HR functions.

 It goes beyond traditional HR reporting by using statistical analysis, modeling, and

data visualization to uncover patterns, predict future trends, and prescribe optimal
solutions.

 HR analytics enables HR professionals to move from reactive, operational roles to

proactive, strategic partners within the organization.

Evolution of HR Analytics

 Early Stages (Pre-20th Century): Focused on basic record-keeping and administrative

tasks, such as maintaining employee records, processing payroll, and managing
benefits.

 Mid-20th Century (1950s-1970s): Shift towards more strategic HR management, with

a focus on aligning HR activities with business goals. Emergence of concepts like
human capital management and strategic human resource management.

 Late 20th Century (1980s-1990s): Emergence of HR metrics and measurement to

evaluate the effectiveness of HR programs. Increased emphasis on demonstrating the
value of HR and its contribution to organizational performance.

 21st Century (2000s-Present): Rapid advancements in technology, data analytics

tools, and big data have led to the growth of HR analytics.

o Increased focus on using predictive and prescriptive analytics to anticipate

future trends and drive proactive decision-making.

o Greater emphasis on the strategic role of HR in driving business performance,

innovation, and competitive advantage.

o Growing recognition of human capital as a key asset and source of

competitive advantage.
Role of HR Analytics

 Improving Decision-Making: Provides data-backed insights for more informed and

objective HR decisions, reducing reliance on intuition and gut feelings.

 Enhancing HR Processes: Optimizes and streamlines HR processes, such as

recruitment, training, and performance management, to improve efficiency and
effectiveness.

 Driving Business Outcomes: Aligns HR strategies with organizational goals to

improve profitability, productivity, and other key business outcomes.

 Identifying Trends and Patterns: Detects emerging trends, patterns, and anomalies
in HR data, such as turnover trends, absenteeism rates, and skill gaps, to enable
proactive intervention.

 Measuring HR Effectiveness: Evaluates the impact and ROI of HR programs and

initiatives, demonstrating the value of HR and its contribution to the bottom line.

 Predicting Future Outcomes: Forecasts future talent needs, anticipates potential

risks, and predicts the likelihood of various HR-related events, such as employee
turnover or recruitment challenges.

 Providing Actionable Insights: Delivers clear, concise, and actionable insights that
enable HR professionals and business leaders to take effective action.

Changing Role of HR Professionals

 Traditional Role: Primarily focused on administrative and transactional tasks, such as

payroll processing, benefits administration, and ensuring legal compliance.

 Evolving Role: Increasingly expected to be a strategic partner, data analyst, and

change agent, contributing to organizational strategy and driving business outcomes.

 New Skills:

o Data analysis and interpretation: Ability to collect, clean, analyze, and

interpret HR data.

o Statistical modeling: Proficiency in statistical techniques and tools for data

analysis and prediction.

o Business acumen: Understanding of business principles, financial metrics, and

organizational strategy.

o Consulting and communication: Ability to communicate findings effectively to

stakeholders and influence decision-making.

o Technology proficiency: Familiarity with HRIS, data analytics software, and

other relevant technologies.
  Focus:

o Using data to drive decisions: Moving away from intuition-based decision-

making to evidence-based practices.

o Providing insights to business leaders: Serving as a trusted advisor to

management, providing data-driven insights to inform strategic decisions.

o Developing HR strategies that align with business goals: Ensuring that HR

practices support the overall objectives and priorities of the organization.

o Measuring and demonstrating the ROI of HR initiatives: Quantifying the

impact of HR programs and demonstrating their value to the organization.

Importance of HR Analytics

 Data-Driven Decisions: Replaces intuition and subjective judgment with evidence-

based decision-making, leading to more accurate and effective outcomes.

 Improved Efficiency: Streamlines HR processes, automates routine tasks, and

reduces administrative overhead, freeing up HR staff to focus on more strategic
initiatives.

 Competitive Advantage: Helps organizations attract, retain, and develop top talent,
improve employee engagement, and foster a high-performance culture, providing a
significant competitive edge.

 Risk Management: Identifies and mitigates potential HR-related risks, such as

compliance violations, legal liabilities, and reputational damage.

 Organizational Performance: Contributes to increased productivity, profitability, and

sustainable growth by optimizing human capital and aligning HR practices with
business strategy.

Scope of HR Analytics

 Recruitment and Selection:

o Analyzing recruitment channels to identify the most effective sources of

candidates.

o Predicting candidate success based on various factors, such as skills,

experience, and personality traits.

o Optimizing the hiring process to reduce time-to-hire and cost-per-hire.

 Training and Development:

o Identifying training needs based on skills gaps, performance data, and

employee feedback.
 o Evaluating training effectiveness by measuring changes in employee
knowledge, skills, and performance.

o Personalizing learning experiences to meet the individual needs of

employees.

 Performance Management:

o Identifying high performers and understanding the factors that contribute to

their success.

o Analyzing performance drivers to identify areas for improvement.

o Improving performance appraisal processes to ensure fairness, accuracy, and

objectivity.

 Talent Management:

o Predicting employee turnover and identifying the reasons why employees

leave the organization.

o Identifying key talent and high-potential employees for leadership

development and succession planning.

o Developing effective succession plans to ensure a smooth transition of

leadership and critical roles.

 Compensation and Benefits:

o Ensuring pay equity and fairness by analyzing salary data and identifying
potential disparities.

o Optimizing compensation structures to attract, retain, and motivate

employees.

o Analyzing the effectiveness of benefits packages in terms of employee

satisfaction and cost-effectiveness.

 Employee Engagement and Retention:

o Measuring employee satisfaction, engagement, and commitment levels.

o Identifying factors that drive engagement and retention, such as work-life

balance, career development opportunities, and management support.

o Predicting and reducing turnover by addressing the root causes of employee

attrition.

 Workforce Planning:
 o Forecasting future workforce needs based on business plans, market trends,
and demographic data.

o Identifying skill gaps and developing strategies to address them, such as

training, recruitment, or outsourcing.

o Optimizing workforce size and composition to ensure the organization has the
right people in the right roles at the right time.

Significance of HR Analytics

 Strategic Alignment: Aligns HR practices with business objectives, ensuring that HR

contributes directly to the achievement of organizational goals.

 Enhanced Insights: Provides a deeper and more comprehensive understanding of the

workforce, its dynamics, and its impact on business outcomes.

 Proactive Decision-Making: Enables HR to anticipate and address issues before they

escalate, allowing for proactive intervention and preventive action.

 Accountability: Measures the impact of HR initiatives and demonstrates their value

to stakeholders, increasing the credibility and influence of the HR function.ti

 Improved Organizational Effectiveness: Contributes to improved organizational

effectiveness by optimizing human capital, enhancing productivity, and fostering a
positive work environment.

Benefits of HR Analytics

o Improved Recruitment:

 Better candidate selection: By identifying the characteristics of

successful employees, HR can improve the selection process and hire
candidates who are more likely to succeed.

 Reduced time-to-hire: Streamlining the recruitment process and using

data to identify bottlenecks can significantly reduce the time it takes
to fill open positions.

 Lower recruitment costs: By optimizing recruitment channels and

reducing turnover, organizations can lower their overall recruitment
costs.

o Enhanced Training and Development:

 More effective training programs: By analyzing data on training needs

and evaluating training outcomes, HR can develop more effective
training programs that improve employee performance.
  Increased employee skills and knowledge: Targeted and effective
training leads to increased employee skills and knowledge, enhancing
their ability to perform their jobs.

 Improved employee performance: By providing employees with the

skills and knowledge they need, training and development can lead to
improved employee performance and productivity.

o Optimized Performance Management:

 Fair and accurate performance evaluations: Data analysis can help

identify and mitigate bias in performance evaluations, leading to fairer
and more accurate assessments.

 Improved employee productivity: By identifying performance drivers

and providing targeted feedback, HR can help improve employee
productivity and efficiency.

 Better alignment of individual and organizational goals: HR analytics

can help align individual performance goals with overall organizational
objectives, ensuring that employees are working towards the right
priorities.

o Increased Employee Retention:

 Reduced employee turnover: By understanding the reasons why

employees leave, HR can develop strategies to improve retention and
reduce turnover rates.

 Lower turnover costs: Reducing turnover leads to significant cost

savings, as organizations spend less on recruitment, hiring, and
training new employees.

 Improved employee morale and engagement: Addressing the factors

that drive turnover can also improve employee morale, engagement,
and overall job satisfaction.

o Better Compensation and Benefits:

 Equitable pay practices: Analyzing salary data can help ensure that
employees are paid fairly and equitably, reducing the risk of pay
discrimination and improving employee morale.

 Competitive compensation packages: Using market data and internal

analysis, HR can design competitive compensation packages that
attract and retain top talent.
  Increased employee satisfaction: Fair and competitive compensation
and benefits can significantly increase employee satisfaction and
reduce turnover.

o Strategic Workforce Planning:

 Ability to forecast future talent needs: By analyzing data on workforce

trends and business plans, HR can forecast future talent needs and
proactively address potential shortages.

 Avoidance of talent shortages: Effective workforce planning helps

organizations avoid talent shortages, ensuring they have the right
people in place to meet future business demands.

 Alignment of workforce with business strategy: HR analytics ensures

that the workforce is aligned with the organization's strategic goals,
enabling the company to achieve its objectives.

Levels of Analysis

o Descriptive Analytics:

 Describes what has happened in the past.

 Summarizes and presents HR data in a meaningful way (e.g., turnover

rates, headcount, demographics).

 Provides insights into past trends, patterns, and key metrics.

 Answers questions like "What happened?", "How many?", and "What

are the trends?".

 Examples: HR reports, dashboards, and visualizations that summarize

historical data.

o Diagnostic Analytics:

 Explores why past events occurred.

 Investigates the underlying causes of HR outcomes and identifies the

factors that influence them (e.g., why turnover is high, why employee
engagement is low).

 Uses techniques like correlation analysis, regression analysis, and root

cause analysis.

 Answers questions like "Why did it happen?", "What are the drivers?",
and "What are the relationships?".
  Examples: Analyzing employee survey data to identify factors
contributing to low engagement, examining exit interview data to
determine reasons for turnover.

o Predictive Analytics:

 Forecasts future outcomes and predicts future trends and events.

 Anticipates what is likely to happen in the future (e.g., who is likely to

leave the organization, what will be future talent needs).

 Uses techniques like regression analysis, machine learning, and time

series analysis.

 Answers questions like "What will happen?", "When will it happen?",

and "Who is at risk?".

 Examples: Predicting employee turnover, forecasting future talent

demand, identifying high-potential employees.

o Prescriptive Analytics:

 Recommends actions to achieve desired outcomes and provides

guidance on what actions to take.

 Suggests optimal solutions and interventions based on data analysis

(e.g., how to reduce turnover, how to improve employee
engagement).

 Uses techniques like optimization, simulation, and decision analysis.

 Answers questions like "What should we do?", "How can we make it

happen?", and "What is the best course of action?".

 Examples: Recommending specific retention strategies, optimizing

training programs, designing effective compensation plans.

 Conducting Analytics

 Define the Business Problem:

 Clearly identify the HR issue or business challenge to be addressed.

 Formulate specific, measurable, achievable, relevant, and time-bound (SMART)

questions that analytics can help answer.ly HtiGather Data:

o Collect relevant data from various sources, both internal (HRIS, surveys,
performance records) and external (market data, industry benchmarks).

o Ensure data quality, accuracy, and completeness by implementing data

governance policies and procedures.
  Clean and Prepare Data:

o Clean the data to remove errors, inconsistencies, and missing values.

o Transform thenclud into a suitable format for analysis, which may involve data
integration, transformation,es a reduction.s.

o Analyze Data:

 Apply appropriate statistical techniques and tools to identify patterns,

trends, and relationships in the data.

 Select the most appropriate analytical methods based on the research

question and the type of data available.

o Interpret Results:

 Draw meaningful conclusions from the analysis and translate the

findings into actionable insights.

 Relate the findings to the business problem and provide context for
the results.si

 Communicate Findings:

 Present the results in a clear and concise manner, using

appropriate visualizations and storytelling techniques.

 Tailor the communication to the specific audience and their

level of understanding.

 Implement and Monitor:

 Use the insights to develop and implement HR interventions

and initiatives.

 Monitor the impact of the interventions and make

adjustments as needed based on the results.le

 Evaluate and Refine:

 Evaluate the effectiveness of the HR analytics process

and identify areas for improvement.nt

 Continuously refine the models, data collection

methods, and analytical techniques to enhance
accuracy and effectiveness.

 Application of HR Analytics

HR analytics can be applied to various HR functions and processes, including:

 Recruitment and Selection:

 Identifying the most effective recruitment sources and channels to optimize

recruitment spending and improve candidate quality.

 Predicting which candidates are most likely to succeed based on their qualifications,
experience, and assessment scores.

 Reducing time-to-hire and cost-per-hire by streamlining the recruitment process and

automating administrative tasks.

 Training and Development:

 Determining which training programs are most effective in improving employee

performance and achieving business objectives.

 Identifying employee training needs based on skills gaps, performance data, and
employee feedback.

 Personalizing learning and development initiatives to cater to individual employee

needs and learning styles.

 Performance Management:

 Identifying the factors that drive high performance and developing strategies to
replicate that success across the organization.

 Developing more accurate and fair performance appraisals by reducing bias and
subjectivity in the evaluation process.

 Improving employee productivity and goal alignment by providing employees with

clear goals, regular feedback, and opportunities for development.

 Talent Management:

 Predicting which employees are at risk of leaving the organization and identifying the
reasons for their potential departure.

 Identifying high-potential employees and developing targeted interventions to

accelerate their development and prepare them for leadership roles.

 Developing effective succession plans to ensure a smooth transition of leadership

and minimize disruption to business operations.

 Compensation and Benefits:

 Ensuring that employees are paid fairly and equitably by analyzing salary data and
identifying potential pay disparities.

 Designing cost-effective benefits packages that meet the needs of employees and
align with the organization's budget.
  Improving employee satisfaction with pay and benefits by communicating the value
of the compensation and benefits package.

 Employee Engagement and Retention:

 Understanding the key drivers of employee engagement, such as work-life balance,

career development opportunities, and management support.

 Identifying employees who are likely to leave the organization based on their
behavior, attitudes, and other factors.

 Developing strategies to improve employee retention, such as enhancing

communication, providing growth opportunities, and fostering a positive work
environment.

 Workforce Planning:

 Forecasting future workforce needs based on business plans, market trends, and
demographic data.

 Identifying skill gaps and developing plans to address them, such as training,
recruitment, or outsourcing.

 Optimizing workforce size and composition to ensure the organization has the right
people in the right roles at the right time, while minimizing labor costs.

changes, and continuously monitor the outcomes to assess the effectiv involves fostering a
mindset and environment where data-driven decision-making is valued and practiced
throughout the HR function and the organization as a whole. Key elements include:he
interventions.

 Evaluate a and commitmentnd Refine: R management to prioritize and invest in HR

analytics initiatives.

 Demonstrating the value of HR analytics to the organization by showcasing its impact

on business outcomes and strategic objectives.cy

 Ensuring that leaders champion the use of data in HR decision-making and hold HR
professionals accountable for using analytics.

 and effectiveness.

HR Data: Importance of Data

analysis, interpretation, and visualization techniques to enhance their analytical

capabilities.ics: Data is essential for cond strongucting HR a skills and experience in data-
driven decision-making..
1. Providing ongoing learning and development opportunities to keep HR staff up-to-
date with the latest trends and technologies in HR analytics.

 Provides Insights: Data enab accuracy, reliability, and validity of HR data by

implementing robust data governance policies and procedures.

 Establishing clear guidelines and standards for data collection, storage, and
maintenance.R

 Regularly auditing and cleaning HR data to identify and correct errors,

inconsistencies, and other data quality issues.

 programs.

 Drives Improvement: Data appropriatehelps identify areas fo technologies, such as

HRIS, data warehousing solutions, and statistical software.

 Providing HR with access to relevant data from across the organization, including HR,
finance, operations, and other departments.et

 Ensuring that HR systems are integrated and that data can be easily accessed and
analyzed.

 c.

o Recruitment Data: Source of hire, time-to-fill, cost-per-hire.

o Training D employees in a clear, concise, and timely manner.

o Encouraging collaboration between HR and other departments, such as

finance, IT, and operations, to ensure alignment and maximize the value of HR
analytics.,

o Establishing channels for feedback and dialogue to ensure that HR analytics

initiatives are aligned with the needs of the business and its stakeholders.

o goals achieved, productivity.

o Compensation and Benefi efforts are focused on generating insights that

leada: Salary, bonuses, benefits usage.

o EmpPrioritizing projects that address critical business challenges and have the
greatest potential to impact organizational outcomes.

o loyee Engagement Data: Survey results, feedback, outcomes and using those
results to drive further improvements.ion scores.

o Turnover and Absenteeism Data and frameworks: Turnover r to guide HR

analytics initiatives and ensure alignment with business goals. Some of the
key models include:
  The LAMP Model: (Logic, Analytics, Measures, Process)

 A framework for connecting HR activities to business outcomes

and demonstrating the strategic value of HR.

 Logic: Developing a compelling business case for HR initiatives

and articulatingection of Data

o activities

 Human Resource Information Systems (HRIS):

o insights, identify patterns, and understand the relationships between HR

practices and organizational outcomes.

o Measures: Identifying key metrics and indicators to track progress, monitor

performance, and evaluate the effectiveness of HR programs.

o Process: Establishing efficient and effective HR processes to implement HR

initiatives and ensure that they are aligned with business objectives.

 The Workforce Scorecard:

o A strategic measurement system that measures the effectiveness of HR

practices and their impact on business goals.

o Focuses on key performance indicators (KPIs) related to HR, such as employee

satisfaction, turnover, productivity, and the quality of hire.):

o Provides a balanced view of HR performance, considering both leading and

lagging indicators.

o Deliver and track employee training and development activities.

o Provide data on training completion rates and effectiveness.

 Exit Interviews:

o Collect data ratios, covering various HR areas, such as staffing, training,

compensation, and employee relations.mp

o Helps organizations assess their HR performance, identify areas for

improvement, and compare themselves to industry best practices.

o loyees leave the organization.

o Identify factors that contribute to a series of interconnected steps, as outlined

below:

 Other Sources:

o Payroll systems, tis

  Define the specific business objectives and priorities that HR can
influence.

 Translate those business objectives into HR-related questions that can

be answered through data analysis.

 Ensure that the questions are clear, focused, and aligned with the
organization's strategic goals.

e of Data: Understandia

 Collect data from various sources, both internal (HRIS, performance

management systems, employee surveys) and external (market data,
industry benchmarks).

 Ensure that the data is relevant to the research questions, accurate,

reliable, and complete.

 Consider the ethical and legal implications of data collection and

ensure compliance with privacy regulations.

tterns and trends in thei

 Process the raw data to remove inconsistencies, errors, and missing

values.

 Transform the data into a suitable format for analysis, which may
involve data cleaning, transformation, and integration.

 Document the data cleaning and preparation process to ensure

transparency and reproducibility.

ngs to Businesa

 Apply appropriate statistical and analytical techniques to identify

patterns, correlations, and insights within the data.

 Select the most appropriate analytical methods based on the research

question, the type of data available, and the desired level of analysis
(descriptive, diagnostic, predictive, or prescriptive).

 Use statistical software and other tools to perform the analysis and
ensure accuracy.

tions: Suggesting actionable steps t

 Translate the findings into meaningful insights that address the

business questions and provide value to stakeholders.
  Communicate the results effectively to the target audience, using
clear, concise language and appropriate visualizations.

 Provide context for the findings and explain their implications for HR
practices and business outcomes.

rics in HR Analytics

o Use the insights to inform HR decisions, develop interventions, and

implement changes in HR policies and practices.

o Monitor the outcomes of the interventions and track key metrics to assess
their effectiveness.

o Make adjustments and refinements as needed based on the results of the

monitoring process.

ts of HR, such as recu

o Evaluate the overall effectiveness of the HR analytics process and identify

areas for improvement.

o Regularly review and update the models, data collection methods, and
analytical techniques to ensure they remain relevant and accurate.

o Continuously learn and adapt to the evolving field of HR analytics and the
changing needs of the organization.

rnover Rate: Percentage of employees who leave the organization in a given period.

o A the fundamental building block ofge of time emp Without high-quality data,
it is impossible to conduct meaningful analysis or generate reliable
insights.loyees are absent from work.

o Time t professionalso Hire: Number of days it takes to relationships that

would otherwise be hidden, leading to a deeper understanding of the
workforce and its dynamics.

o Supports Decision-Making: Data-driven insights provide a solid foundation

for making informed and objective HR decisions, reducing reliance on
intuition and subjective judgment.

o Measures Impact: Data is essential for evaluating the effectiveness of HR

programs and initiatives, demonstrating their value, and justifying
investments in human capital.
 o Drives Improvement: By providing visibility into HR processes and outcomes,
data helps identify areas for improvement, enabling HR to optimize its
practices and enhance its contribution to the organization.

Types and Need of Data

o Types of HR Data:

 Employee Demographics: Basic information about employees, such as

age, gender, ethnicity, education level, and tenure.

 Recruitment Data: Data related to the hiring process, such as source

of hire, time-to-fill, cost-per-hire, and applicant demographics.

 Training Data: Information about employee training and development

activities, such as trainingnagement

o Training and developm andent

o Reporting and analytics

 Role in H Data on employee performance, including performance ratings, goals

achieved, productivity metrics, and feedback.

 Compensation and Benefits Data: Data related to employee pay and benefits, such
as salary, bonuses, benefits usage, and compensation ratios.

 Employee Engagement Data: Data on employee attitudes, opinions, and satisfaction

levels, typically collected through surveys, feedback forms, and other mechanisms.

 Turnover and Absenteeism Data: Data on employee attendance, including turnover

rates, reasons for leaving, absenteeism frequency, and duration of absences.

 Need for Different Types of Data:

o Different data types provide different perspectives on HR issues and offer a

more holistic view of the workforce.

o Combining data types can lead to richer, more nuanced insights and uncover
complex relationships.

o Comprehensive data is needed for accurate and reliable analysis, as well as

for building robust predictive models.

Methods of Collection of Data

 Human Resource Information Systems (HRIS):

o Centralized systems for managing employee data, automating HR processes,

and generating reports.ctiveness: Measurin a wide range of employee
 information, includingg the impact of training programs salary,on e
benefits.rm

o Provide a foundation for HR analytics by storing and organizing HR-related

data in a structured format.

o ance and business outcomes.

 Personalizing learning: Using data to tailor training programs to individual employee

needs and learning styles.

 Optimizing training investments: Determining which training programs provide the

greatest return on investment.

Performance Appraisal

 Developing fair and accurate appraisals: Using data to identify and minimize bias in
performance evaluations.

 Identifying high performers: Analyzing performance data to identify top-performing

employees.

 Understanding performance drivers: Determining the factors that contribute to high

or low performance.

 Improving performance management systems: Using data to refine the performance

appraisal process and make it more effective.

Talent Management

 Predicting employee turnover: Identifying employees who are at risk of leaving the
organization.

 Identifying high-potential employees: Analyzing data to identify employees with the

potential to advance.

 Developing succession plans: Using data to identify and develop future leaders.

 Improving employee retention: Understanding the factors that drive employee

retention and developing strategies to reduce turnover.

Compensation Management

 Ensuring pay equity: Analyzing salary data to identify and address gender or racial
pay gaps.

 Designing competitive compensation packages: Using market data to determine

appropriate salary ranges and benefits.

 Rewarding performance: Using performance data to inform pay decisions and

ensure that high performers are rewarded.
  Controlling labor costs: Analyzing compensation data to identify opportunities to
optimize labor costs.

Tools for Conducting HR Analytics

MS Excel

 A widely used spreadsheet program that can be used for basic HR data analysis.

 Features:

o Data entry and storage

o Formulas and functions for calculations

o Charting and graphing capabilities

o Pivot tables for data summarization

 Suitable for:

o Descriptive analytics

o Basic statistical analysis

o Creating reports and visualizations

Pivot Table for Key HR Processes

 A powerful tool in Excel for summarizing and analyzing large datasets.

 Allows users to quickly and easily extract insights from data.

 Can be used to analyze various HR processes, such as:

o Recruitment: Analyzing time-to-hire, cost-per-hire, and source of hire.

o Turnover: Calculating turnover rates by department, tenure, or other factors.

o Compensation: Analyzing salary distribution, pay equity, and compensation

costs.

o Training: Evaluating training participation rates and training costs.

o Diversity: Analyzing workforce demographics and diversity metrics.

Prescriptive HR Analytics

Prescriptive HR Analytics

 The most advanced level of HR analytics.

 Involves recommending specific actions to achieve desired outcomes.

 Goes beyond predicting what will happen to suggest what should happen.
  Uses techniques like optimization, simulation, and machine learning.

Job Satisfaction

 Prescriptive analytics can identify the factors that have the greatest impact on job
satisfaction.

 HR can then use this information to implement targeted interventions to improve

satisfaction levels.

 For example, if analysis shows that lack of growth opportunities is a key driver of
dissatisfaction, HR can create new training and development programs or restructure
career paths.

Training & Development

 Prescriptive analytics can determine the most effective training methods for specific
employee groups or skills.

 It can also optimize training budgets by identifying the programs that provide the
greatest return on investment.

 For instance, if analysis reveals that a particular training program is highly effective
for improving sales performance, the company can invest more resources in that
program.

Difference Between Predictive & Prescriptive HR Analytics

Feature Predictive HR Analytics Prescriptive HR Analytics

Recommending actions to achieve

Focus Predicting future outcomes
desired outcomes

Question
"What will happen?" "What should we do?"
Answered

Regression, machine learning, time Optimization, simulation, decision

Techniques
series analysis analysis

Outcome Forecasts, predictions Recommendations, action plans

More complex than descriptive,

Complexity Most complex level of analytics
less complex than prescriptive

Recommending specific retention

Example Predicting employee turnover
strategies to reduce turnover

Predictive HR Analytics

Predictive HR Analytics
  Uses statistical models and machine learning techniques to forecast future HR
outcomes.

 Helps HR anticipate future challenges and opportunities.

 Examples:

o Predicting which employees are likely to leave the organization.

o Forecasting future talent needs.

o Identifying which recruitment sources are most likely to yield successful hires.

Correlation

 Measures the statistical relationship between two variables.

 Indicates the strength and direction of the relationship.

 Values range from -1 to +1.

o +1 indicates a perfect positive correlation.

o -1 indicates a perfect negative correlation.

o 0 indicates no correlation.

 Example: Correlation analysis might reveal a strong negative correlation between

employee satisfaction and turnover, meaning that as satisfaction decreases, turnover
increases.

Linear Regression

 A statistical technique used to model the relationship between a dependent variable

and one or more independent variables.

 Predicts the value of the dependent variable based on the values of the independent
variables.

 Example: Linear regression could be used to predict employee performance based on

factors such as education level, experience, and training.

Comparison of Means

 Compares the average values of a variable for two or more groups.

 Determines if there are statistically significant differences between the group means.

 Techniques include t-tests and ANOVA (Analysis of Variance).

 Example: A t-test could be used to compare the average performance ratings of

employees who have received training versus those who have not.
Analysis of Variance (ANOVA) for Manpower Demographics

 A statistical technique used to compare the means of two or more groups.

 Examines how manpower demographics (e.g., age, gender, education) affect various
HR outcomes.

 Helps determine if there are significant differences in outcomes across different

demographic groups.

 Example: ANOVA could be used to analyze whether there are differences in

employee salaries based on age, gender, and education level. It can help in
identifying pay disparities and ensuring fair compensation practices.