What is HR analytics?

HR analytics, also referred to as people analytics or workforce analytics, involves gathering,

analyzing, and reporting HR data to drive business results. It enables your organization to better
understand your workforce, make decisions based on data, and measure the impact of a range of HR
metrics, ultimately improving overall business performance. In other words, HR analytics is a data-
driven approach to Human Resources Management.
People analytics expands beyond HR to incorporate data from other sources within the organization,
such as marketing, finance, and customer statistics, to address a wider scope of business issues.
Analytics enables HR professionals to make data-driven decisions instead of relying solely on instinct
and opinions. Furthermore, analytics helps test the effectiveness of HR policies and interventions.
Types of HR analytics
Different data analysis methods provide insight and identify trends within data. Being familiar with
these methods helps you understand how analytics can contribute to HR planning and decision-
making.
Here’s a brief overview of the four types of HR analytics:
 Descriptive HR analytics: Examines historical data to see what has occurred during a specific time.
 Diagnostic HR analytics: Investigates data to ascertain the causes of past occurrences and
behaviors. (Example: Examining unplanned absence data to identify absenteeism drivers.)
 Predictive HR analytics: Explores current and historical data and uses statistical models and
forecasts to predict future behaviors and events. (Example: Exploring recruitment data to discover the
key attributes of an ideal candidate for a particular position.)
 Prescriptive HR analytics: Suggests potential future outcomes and scenarios and proposes
recommendations for addressing them. (Example: Developing an algorithm that predicts what type of
onboarding a new hire will need according to their experience and skill level.)

1. Descriptive analytics
The first type of HR analytics on the list is descriptive analytics. This is the most basic type that
analyzes data patterns to gain insight into the past.
It is known as decision analytics, and uses statistical analysis techniques to explain or summarize a
particular set of historical, raw data. It focuses on past data to account for what happened but doesn’t
make predictions for the future.
How descriptive analytics works
Descriptive analytics can use a combination of numerical data and qualitative data. It involves
performing mathematical calculations, such as central tendency, frequency, variation, ranking, range,
deviation, etc. This allows HR to see patterns and inconsistencies to improve planning.
Descriptive analytics can help with:
 Assessing behavior
 Comparing characteristics across time
 Spotting anomalies
 Identifying strengths and weaknesses
Advantages and disadvantages
Descriptive analytics advantages Descriptive analytics disadvantages

– The simplest form of data analysis. – Limited to a simple analysis of a few variables after the fact.
– Requires only basic math skills, and it allows you to – For instance, an employee headcount summary captures a
present complex data in an easy-to-digest format time period and reports the “what” but not the “why” or “how.”

Descriptive analytics examples

Efficiency metrics that HR has traditionally tracked fall under the descriptive analytics category. Here
are two examples:
 PTO: Using descriptive analytics, HR can analyze the average number of paid time off days that
employees use in one year.
 Employee turnover: Descriptive analytics could be used to analyze employee turnover rates to
compare the annual turnover between two teams or two departments.
2. Diagnostic analytics
Diagnostic analytics takes descriptive analytics to the next level by providing an explanation for what
has been revealed. It aims to determine the underlying reasons for what the data exposes.
Although it is based on the same historical data as descriptive analytics, there is a key difference.
Diagnostic analytics goes into the next step of summarizing what happened in understandable terms.
It digs for the “why” behind the data’s trends, correlations, and anomalies.
In other words, diagnostic analytics is used to transform data into valuable insights. It identifies
patterns, variances, and causal relationships while also considering internal and external factors that
could be influencing them. This helps HR see the big picture of a situation and zero in on which
factors have the potential to create problems. Then, you can focus your efforts in the right place to
mitigate them.
How diagnostic analytics works
Conducting a diagnostic analysis typically involves the following steps:
1. Identifying the patterns and anomalies within the data that raise questions and need to be studied
further.
2. Discovering what factors could be contributing to the patterns and anomalies to identify the relevant
data.
3. Determining causal connections by analyzing the data with various methods.
There are multiple diagnostic analytics techniques, including::
 Data drilling: Taking information from a more general overview and providing a more granular view of
the data.
 Data mining: Extracting patterns from data to help predict future events
 Probability theory: Quantifying uncertain measures of random events
 Regression analysis: Determining which variables will impact an outcome
 Correlation analysis: Tests the relationships between variables
 Statistical analysis: Collecting and interpreting data to determine underlying patterns
Diagnostic analytics advantages and disadvantages
Diagnostic analytics advantages Diagnostic analytics disadvantages

– Focuses on past occurrences which makes it very

– Shows a more comprehensive interpretation of the data for reactive.
informed decision-making. – Can’t provide actionable insights to support your
planning process.

Diagnostic analytics examples

Let’s look at two examples of diagnostic analytics put into action to analyze workforce issues:
1. Employee absenteeism
If your absenteeism rate is climbing, you can use diagnostic analytics to find out why employees are
missing work more often.
This could involve looking at your absenteeism data to see if more unplanned absences occur on
certain days of the week, when there is a long time between paid holidays, or after employees’
requests for time off have not been approved. You can also review pertinent information from
employee feedback surveys and exit interviews.
Once you understand the most common reasons for absences, you can develop strategies to change
these factors.
2. Employee engagement
Diagnostic analytics can be used to improve your employees’ engagement and your company
culture. Digging into the data from internal surveys and exit interviews should uncover the areas that
make employees feel connected and satisfied in their work and those that don’t.
Since highly engaged employees tend to be the most productive, linking engagement scores to
performance measures will show the impact. A report noted how shoe retailer Clarks discovered that
for every 1% improvement in employee engagement there was a 0.4% increase in the company’s
performance.
3. Predictive analytics
Predictive HR analytics supports better HR decisions. It translates historical data gathered from
areas such as job skills, employee engagement, productivity, and resumes into forecasts about what
to expect in the future. These predictions furnish HR leaders with information that will improve
decision-making in areas such as hiring the right candidates, bridging the skills gap, and retaining top
talent.
How predictive analytics works
The predictive analytics process involves categorizing past and present data to isolate patterns,
correlations, and irregularities followed by estimating a model to predict what will occur in the future.
Then the model’s accuracy is evaluated by applying it to new data.
EXPLORE IN DETAILPredictive Analytics in Human Resources: Tutorial and 7 case studies
Predictive analytics advantages and disadvantages
Predictive analytics advantages Predictive analytics disadvantages

– It requires substantial and relevant data (big data

– It can reduce human error, help you avoid risks, improve sets).
operational efficiencies, and refine the forecasting for your – It’s also challenging to ensure that all of the variables
organization. are considered, and the model must be updated as data
changes.

Predictive analytics examples

Predictive analytics is a valuable tool in many HR functions. Here are two predictive analytics use
cases:
1. Recruitment
Predictive analytics can analyze data from the hiring process (resumes, job descriptions, etc.) to
narrow in on the desired skill sets. Certain elements of social media profiles and answers to
automated application questions can also reveal the key attributes that indicate a candidate is a right
fit for long-term success with the organization. Then you can tailor your recruitment strategy to attract
and engage this type of applicant.
Furthermore, you can implement predictive analytics to estimate what your future demand for certain
roles will be. This allows you to start recruiting at the appropriate time and target suitable candidates.
2. Retention
With predictive analytics, you can forecast various talent management outcomes, such as who will
quit. The HR department at consumer credit institution Experian developed a predictive model that
can identify who’s at risk of leaving and what the surrounding factors are.
Gathering and analyzing data for employees’ projected flight risk can expose who may leave and
what their reasons are. These indicators point out what needs to be evaluated. For instance, the
growth opportunities or compensation and incentive packages your organization offers. With this
knowledge, you can make changes that will keep more staff with the company and lower the turnover
rate.
4. Prescriptive analytics
Prescriptive analytics is the final and most complex stage of the analytics journey that transfers
predictive analytics into ideas for what to do next.
A general prescriptive analytics definition would be the targeted recommendation for decision options
and actions based on the findings of predictive analytics. It offers options for where and how to act to
achieve success.
Prescriptive analytics relies on big data and uses an assortment of technical tools, including:
 Machine learning
 Algorithms
 Artificial intelligence
 Pattern recognition
How prescriptive analytics works
You can think of prescriptive analytics like Netflix for business. It works in the same way that Netflix
suggests films based on viewing behaviors. Prescriptive analytics goes beyond predictive analytics
with a more pre-emptive approach to looking at the future.
Predictive analytics simply predicts a decision or action’s most likely outcomes. With prescriptive
analytics, you can forecast what will happen next, why, and what you can do next. It anticipates the
most likely scenarios and which interventions have the potential to bring optimal results.
Prescriptive analytics advantages and disadvantages
Prescriptive analytics advantages Prescriptive analytics disadvantages
 – An iterative process that requires time. Also, the quality of
– Equips HR leaders to make informed, real-time recommendations is dependent on the quality of the data, so it
decisions to improve performance, solve won’t be effective if your data is incomplete or unreliable.
complicated problems, and take advantage of – You must also be careful about weighing the options
opportunities. presented and ensure that taking the recommended action is
– For example, it can recommend strategies for reasonable from an HR perspective.
training that will boost – Algorithms can’t always reflect the diverse intricacies of
dealing with human beings.
Because of its complexity, prescriptive analytics is also known as the ‘final frontier of analytic
capabilities’. It requires more advanced analytics skills that you can develop by participating in
an AIHR People Analytics Certificate Program.
Prescriptive analytics examples
Here are two prescriptive analytics use cases related to HR.
1. Staffing
Prescriptive analytics can help you prepare for upcoming staffing needs. Data surrounding
employees’ interactions with digital benefit options can reflect potential openings. An uptick in activity
surrounding retirement planning or medical and family leave policies can lead to staffing
recommendations that will address departures and long-term absences.
2. Attrition
As mentioned above, Experian is using AI to predict high-flight-risk employees. However, they are
also taking the next step with prescriptive analytics to prevent the contributing factors to flight risk
from happening.
According to Experian HR executive Olly Britnell, “We’re using machine learning to track
interventions such as changing the team structure offering more training, and then tracking which
ones are having an impact.”

To conclude
HR analytics is the driving force behind effective planning and decision-making in HR. The insights
analytics reveals provide a more complete perception of what’s really going on in the company. This
opens up possibilities and opportunities you wouldn’t otherwise be aware of.
The better you understand the different types of metrics and analytics in HR, the more relevant
information you’ll be able to gather from data to help meet business goals. Your ability to leverage
analytics puts you in the position to serve your organization in a more strategic capacity.

What is HR analytics used for?

Analyzing your HR data helps you draw conclusions, uncover insights, and make predictions. Data
analytics in HR is used to improve HR functions in a variety of ways.
Here are a few examples:
 Identifying patterns in voluntary and involuntary employee turnover
 Assessing the recruitment effort through candidate and process data
 Evaluating talent management effectiveness with metrics such as engagement and
absenteeism rates
 Determining training and development needs from a skills inventory
 Optimizing compensation and benefits through analyzing market trends, internal equity, and
effectiveness of current compensation packages
 Predicting future workforce needs by analyzing current workforce demographics, skill sets,
and retirement projections.

Importance of HR analytics
Leveraging data has become essential to expanding HR’s role within organizations by moving it from
an operational function to a strategic partner. Knowing the impact of HR policies helps HR align
its strategy with business goals and quantify the value it adds. Increasing what HR has to offer
benefits employees and makes a positive impact on business results.
Engaging in HR analytics enables HR to:
 Make better decisions that impact employees and the organization using the evidence data
reveals
 Uncover and remedy inefficiencies to improve employee and organizational productivity and
reduce costs
 Create a business case for HR interventions
 Evaluate the effectiveness of HR interventions and people policies
 Assess and strengthen DEIB (Diversity, Equity, Inclusion and Belonging) efforts
 Be proactive in navigating change, disruption, and uncertainty.
HR analytics examples
To get an idea of how HR data analysis can make a difference in your organization, here are three
companies that have successfully put HR analytics into practice:
1. HR analytics in recruitment at Google
Multinational technology company Google embraced predictive analytics in its recruitment efforts to
reduce costs and shorten the hiring process.
Google had previously required candidates to endure 15 to 25 rounds of interviews and testing.
However, an analysis of the hiring process revealed that successful candidates could be predicted
with 86% confidence from just four interviews. This reduced the number of hours and staff required to
screen applicants effectively.
In addition, Google formulated an algorithm that analyzes resumes that had been rejected for one
position to source potential candidates for another opening.
2. HR analytics in employee attrition at Under Armour
American athletic footwear and apparel company Under Armour wanted to reduce its employee
attrition rate. They used an integrated workforce analytics tool to sort through data and detect the top
causes of attrition. They were also able to forecast departures at Under Armor’s different locations
and predicted that within the next six months, 500 out of the 5,000 employees would resign.
With the attrition drivers identified, Under Armour was able to make improvements to its employee
retention efforts with enhanced people strategies, including incentives and rewards. With these
interventions, the employee attrition rate ended up being 50% lower than the initial prediction.

Data analytics in HR: How to get started

HR data analysis has several phases. You must understand the process to be able to apply HR
analytics effectively.
Here is a simplified overview of the five steps:

1.
Asking a relevant business question
Your goal for using HR analytics should be to enable HR to impact business outcomes. For this
reason, you need to start with the end goal in mind.
Clarify which area you’re focusing on and what you need the data to tell you and then put it in the
form of a question. For example, if you want to optimize succession planning, the right question could
be, “Which employees have the highest potential for progression and leadership?”
2. Data selection
The second step is to identify which information you need to answer the question and where you will
find it. Your HR tech stack or other internal data sources should house most of what you need.
However, certain circumstances may require incorporating external benchmarking data.
This stage will be cumbersome without a system that can sort and organize the data. Ideally, it
should also be integrated with a reporting system.
3. Data cleaning
Once you’ve collected the right data, you’ll likely have some that are duplicated or incorrectly
formatted. Without identifying and correcting this you may end up with a faulty analysis.
The data cleaning process depends on the data set, but it typically involves removing or fixing
duplicate, corrupted, incorrect, or incomplete data. You should also review it for any missing data and
structural errors.
4. Data analysis
Next comes summarizing and analyzing the data to reveal trends, correlations, and patterns that help
you draw conclusions. This can be done using various analysis techniques or tools such as Excel,
ChatGPT, R, or Python.
The results of your analysis will show what the data tells you about your original question.
5. Actionable insights
Now it’s time to interpret what the data is telling you and turn that into courses of action. Based on
the findings, you can evaluate the impact of HR processes and policies and make decisions or
recommendations for improving them.

In closing
The contemporary HR environment is both people-focused and data-oriented. HR data holds
unbiased information and insights for crafting strategies and best practices that lead to more efficient
and valuable HR services. This promotes higher employee engagement and productivity for better
overall business achievement.
HR professionals who embrace the role of HR analytics and can decipher its insights help their
organizations thrive and set themselves up for success in the future of HR.

What is an HRIS?
A Human Resources Information System, or HRIS, is a software solution that is used to collect,
manage, store, and process an organization’s employee information. Essentially, HR teams use an
HRIS to work more efficiently and make more data-driven decisions.
In most cases, an HR information system includes the basic features needed for end-to-end HR
management. This system helps companies manage and automate core HR processes, such as:
 Employee data management
 Benefits administration
 Payroll processing
 Time and attendance management
 Reporting and analytics
 Employee self-service
In the past, HRIS software used to be on-premise, meaning that it ran on the company’s own
technical infrastructure. Nowadays, it’s almost always cloud-based, making it much easier to update,
among other things.

HRIS vs HRMS vs HCM

The terms HRIS, HRMS, and HCM are often used interchangeably. And while there is some overlap
in core HR areas that run on basic employee data, they aren’t the same thing. Rather, they build
upon one another and offer increasingly sophisticated features as the company’s needs evolve.
Put simply, an HRIS offers basic data and workflow automation. An HR Management System
(HRMS) offers all the functionalities of the HRIS and, on top of that:
 Recruiting & applicant tracking
 Onboarding
 Performance management
 Employee engagement
A Human Capital Management (HCM) system offers all the functionalities of the HRIS and the
HRMS, as well as additional features. It offers a complete suite of HR applications to improve
the employee experience and is focused on strategy and planning.
As such, it usually includes:
 Learning and development
 Compensation management
 Succession planning
 Industry data and benchmarks
 Advanced data & analytics
 Business intelligence
Bear in mind that the exact features and functionalities of an HRIS, HRMS, and HCM differ per provider. The
ones listed in this article are just a basic example of what the different types of HR software can look like.
HRIS functions
Depending on the HRIS provider, the exact functionalities of the system will differ. For clarity and
consistency, we will discuss the features listed in the section explaining what an HRIS is, which are
the core HRIS functions.
Employee data management
Employee data management refers to the collecting, organizing, and storing of employee data and is
arguably the number one feature of any HR information system and the reason why so many
organizations use one.
It allows businesses to reduce paperwork, keep the information up to date, as well as enhance
searchability and accessibility of information.
Benefits administration
Another feature of the Human Resources Information System is benefits management. Employee
benefits are an essential aspect of compensation and are also managed in this system.
HRIS simplifies benefits management by automating enrollment processes and tracking employee
eligibility. It serves as a centralized platform for managing various benefits plans and enables
employees to easily access and modify their benefits selections.
Payroll processing
The payroll feature automates the pay process of an organization’s employees. Contractual data and
information about new hires is often entered into this module of the system – sometimes combined
with time and attendance data – and at the end of the month, payment orders are created.
Time and attendance management
This module gathers time and attendance data from employees. These are especially relevant for
shift workers who clock in and out.
Back in the day – and as we’ve seen earlier, in some companies still today – employees often wrote
down their working hours on a piece of paper. Their manager would then manually enter the data into
a time-tracking system. Based on this data, payment orders were generated and paid to all
employees.
In today’s more digitalized work environment, workers often check into work by fingerprint or with a
card synced with the company’s HRIS. This gives an exact time for people’s arrival and departure.
Any issues with lateness can easily be detected.
Reporting and analytics
This feature enables the creation of automated HR reports on various topics like employee turnover,
absence, performance, and more. Analytics involves the analysis of these insights for better-informed
decision-making.
Employee self-service
As we’ve mentioned above, companies are increasingly focusing on having employees and their
direct supervisors manage their own data.
Employees can, for example, request PTO themselves. Once approved, these requests are then
immediately saved into the system (and registered to track for payroll and benefits purposes).
 Benefits of an HRIS
Using an HRIS has multiple benefits for the organization, HR, and the employee.
Working with this kind of software typically becomes interesting when the company has between 30
to 50 employees. Managing the basic employee information in Excel becomes cumbersome at this
point and simple procedures like approving employee time off need to be standardized.
Using an HRIS is especially beneficial for large organizations, which typically use more advanced
HRIS systems to support different HR functions. Small businesses would suit a more basic HRIS.
Let’s look at some of the main benefits of working with an HRIS:
 Improved record-keeping: An HRIS is a record-keeping system that keeps track of changes to
anything related to employees. As such, the HRIS can be seen as the single source of truth regarding
personnel data.
 Compliance: Some employee data is collected and stored for compliance reasons. Think, for instance,
of material for the identification of employees in case of theft, fraud, or other misbehaviors, first contact
information in case of emergency, citizens identification information for the tax office, and expiration
dates for mandatory certification. Organizations can store all this information in the HRIS. Data must be
stored safely and securely, in line with GDPR regulations.
 Efficiency: Having all this information stored in one place benefits accuracy and saves time. Some
companies still keep a lot of data about employees as physical paperwork. Finding the correct folder
and locating the right sheet can take up a lot of staff time. In the US, for example, around 38% of
employees still use paper timesheets and punch cards. In Canada, this is 58%.
 HR strategy: The HRIS permits the tracking of data required to advance the HR and business
strategy. We’ll discuss examples of how to leverage HRIS data later in this article.
 Self-service HR: Another benefit of the HR information system is its ability to offer self-service HR to
employees and managers. This enables employees to be more autonomous and manage (most of)
their own affairs, like updating their information or requesting leave.
 An improved employee experience: When done right, the self-service opportunities and easy access
to HR information that an HRIS offers can positively impact your digital employee experience and, with
it, your overall EX.

HRIS examples
The HRIS software market is fiercely competitive. There are many vendors to choose from
depending on your organization’s needs.
Gartner lists the most popular Human Capital Management suites for organizations with 1,000+
employees. These include:
 SAP SuccessFactors
 Workday
 Ceridian Dayforce
 Oracle
 UKG
Other well-known HRIS vendors for large companies are ADP, Cornerstone, and Cegid.
Examples of Human Resources Information Systems for small and medium-sized businesses
include:
 BambooHR
 Paycor
 TalentHR
  Zoho People
 Personio

HRIS implementation in 6 steps

HRIS implementation is a complex process that involves not only a lot of research and multiple
stakeholders but also requires a significant amount of change management.
We’ll have a look at a high-level, 6-step overview of the HRIS implementation process.
1. Search
Find out what your different stakeholders need from an HRIS. Based on these requirements – and
after you’ve checked out our HRIS requirements checklist, you can shortlist potential providers.
You can then ask these providers for a proposal. Ideally, you’ve chosen a suitable HRIS provider at
the end of this phase.
2. Plan and align
In this phase, you select an implementation partner and create a steering committee and an
implementation team. The steering committee usually consists of senior delegates from your chosen
HRIS provider, the HR director from your organization, the internal project manager, and preferably a
senior user from your business.
The implementation team’s primary responsibility is working on the day-to-day tasks that come out of
the implementation.
3. Define and design
At this point, you need to specify your user groups and map out your processes and workflows.
Define the functional and technical requirements for your HRIS infrastructure and security.
Also, note that you might need to build an integration between your HRIS and other existing systems
during this phase. This is why it’s essential to have an HR Information System with integration
capabilities to accommodate existing and future systems.
4. Configure and test
In this phase, you need to create a core test team to test your new HR Information System and
provide feedback for potential improvements. After this, you should also create a user acceptance
test, where you can bring in a number of users to provide final feedback.
5. Train and communicate
Before the go-live, you will need to prepare training for your technical staff, a communication plan, a
Frequently Asked Questions page, and other support documents.
6. Deploy and sustain
Once all your support processes are in place, you can officially launch your HRIS. Remember to
constantly collect feedback and update your training material in line with the evolving systems.
Constant, accurate communication is key here.

HRIS management best practices

Once you’ve implemented your HRIS, you need to make sure that it continues serving its users
effectively. Let’s take a look at some best practices for HRIS management. Think, for example, of:
 Customization for organizational needs: Customize the HRIS to align with the specific needs and
workflows of the organization, such as configuring fields, forms, and workflows to accommodate unique
processes and reporting requirements. Some systems (and vendors) will allow for more customization
than others. This is something to keep in mind and ask about when selecting providers.
 Regular data maintenance: Implement regular data audits and clean-ups to ensure the accuracy and
integrity of HRIS data, including employee records, payroll information, and performance evaluations.
 User training and support: Provide comprehensive training sessions and ongoing support to HRIS
users to maximize utilization and ensure employees are proficient in using the system for tasks such as
time tracking, benefits enrollment, and performance management.
This, too, is something to be mindful of when selecting an HRIS provider. Ask them what support will
look like once the system is fully implemented, i.e., will there be a dedicated person you can reach out
to for support, or will you have to first talk to a chatbot or go through a customer service team?
 Continuous data security: Implement robust data security measures, including encryption protocols,
user access controls, and regular security audits, to safeguard sensitive employee information stored
within the HRIS from unauthorized access or breaches.
 Performance monitoring and optimization: Regularly monitor system performance metrics, such as
response times and user satisfaction surveys, to identify areas for improvement and optimize system
performance through enhancements or upgrades as needed.
 Regular system updates and maintenance: Stay current with system updates and patches provided
by the HRIS vendor to ensure optimal system performance, access to new features, and compliance
with evolving regulatory requirements. Regular maintenance tasks, such as database and system
backups, should also be performed to prevent data loss and system downtime.
How to get the most out of your HRIS data
Beyond easier workforce administration, HR departments can (and should) leverage their HRIS data
to create more proactive talent management and retention strategies. Here’s how:
 Integrate your HRIS with other relevant systems, such as performance management, learning
management, and recruitment systems, to consolidate data and gain a comprehensive view of
employee life cycle data.
 Use historical HRIS data to identify patterns and trends in employee turnover, engagement, and
performance. Analyze factors contributing to turnover, such as tenure, job level, department, and
performance ratings.
 Leverage HRIS insights to develop personalized interventions for at-risk employees, such as targeted
training, career development opportunities, or adjustments to workload or job responsibilities.
 Encourage collaboration between HR and line managers in leveraging HRIS analytics for talent
management and retention strategies. Provide managers access to relevant HRIS data and insights to
support data-driven decision-making at the team level.