HR Analytics versus HR Metrics
Blog //23-12-2021

HR Analytics versus HR Metrics

by Alex Arundale, Chief People Officer, Advanced

In the new working world, it is clear that HR teams will play a vital role in informing business strategy and developing new company cultures. The pandemic era has demonstrated the effectiveness of allowing HR teams to play a more proactive role in business strategy planning and as organisations prepare for the new future of working, they would do well to lean on their HR teams, drawing upon their expertise to inform their ongoing strategy.

For businesses across all sectors, the effectiveness of any long-term planning will be dictated by the information available. The data and metrics that HR teams are able to draw upon will go a long way towards determining how successful an organisation’s business strategy might be. Unquestionably, all organisations will have their focus set upon driving productivity and profitability, particularly in the wake of a turbulent period. With that in mind, business leaders need to ensure that their HR teams are being granted oversight of the information they need in order to help their organisations to attain success.

Unfortunately, it’s not uncommon for HR analytics and HR metrics to be confused as one and the same, with many organisations using the two terms interchangeably. For businesses looking to get the most out of their HR analytics and metrics, it pays to understand the fundamental differences between the two.

What is the difference between HR analytics and HR metrics?

Human Resource metrics are the key figures and data points that allow organisations to keep a weather eye on their human capital investments. This information is also crucial in enabling business to measure how effective any human resource initiatives may be. Examples of key metrics include cost per hire figures, employee turnover rates as well as overall absence rates. 

HR analytics on the other hand, deal with the impact that people can have on driving forward business performance. HR analytics is more about gauging the reasons why certain factors occur within the HCM space and quantify them, as opposed to metrics that deal more with hard data.

What is the role of HR analytics?

The role of HR analytics is to provide businesses with the insight needed to not only attain their business goals but to also understand how best to look after their people. Whilst data and metrics can furnish you with plenty of useful and actionable information, HR analytics takes that same data and provides the proper context in which organisations can most effectively utilise it.

Having this is insight is particularly key when you consider the people led nature of the HR function. Without a proper understanding of the impact of initiatives upon your people or even the basic ROI of any changes, businesses are flying blind when it comes to actioning their ongoing business strategy.

HR analytics allow you to parse through the masses of data gathered in your day to day operations and cut to the heart of what is specifically relevant to you. Furthermore, the technology and systems leveraged by organisations to understand their HR metrics and analytics has never been more accessible- either as a stand-alone module or folded into more comprehensive cloud-based HR solutions.

Which HR analytics are most important?

So what exactly are some of the key analytics your people teams should be focusing on?

Employee turnover rate

Perhaps the most pertinent analytic given the current challenges facing businesses in terms of the acquisition of talent- understanding the causes of turnover, whether it is voluntary or otherwise, is absolutely vital for businesses looking to course correct.

One of the most beneficial elements of gaining an insight into your employee turnover rate is understanding gaps in processes or the overall employee experience which can lead to high rates of attrition.

Absenteeism

Whilst sick leave is a natural part of any employee’s life cycle at an organisation, having an awareness of patterns of absence is important to help you identify potential stressors or causes in the working environment which can contribute to employees taking sick leave.

Absentee analytics help you easily recognise and reconcile these patterns and can arm people teams with the information they need to drive forward meaningful conversations with employees and enact change that can positively impact the wellbeing of their workforce. It is important to have a return to work policy to ensure that the business has fulfilled its duty of care and legal obligations as an employer.

Training efficiency

Many employees would cite a well-embedded training and development programme within their workplace as a desirable element to have. What’s less clear, however, is how effective any training initiatives can be once put into practice. Offering your people the opportunity to cultivate their skills and advance themselves is an undeniable perk but it is also costly to implement and it’s only sensible that businesses would want to see a return on investment.

Analytics around training initiatives can allow you to gather appropriate data points around performance improvement, test scores or even evidence of upward mobility amongst employees post-training. This gives you the oversight you need to see where your training may be particularly effective or to highlight areas where your programmes of learning and development need refining.

Revenue per employee

This is generally obtained by dividing a company’s revenue by the total number of employees in the company. This offers an indication of the average revenue each employee generates. It is a measure of how efficient an organization is at enabling revenue generation through employees.

Having insight into the specific value of each employee in this way allows organisations to make more considered decisions about where best to focus your efforts in terms of the allocation of resources or even where you may need to drive conversations around engagement or wellbeing.

HR Analytics reports

The HR function is extremely broad in scope and encompasses almost all aspects of the day to day running of an organisation. It follows, therefore, that the systems and processes utilised by businesses must be complex and comprehensive enough to keep up with the demands of the HR role.

Whilst HR analytics reporting is something that has traditionally been seen through quite a narrow lens- with data and metrics being drawn upon only when assessing periods of downturn or conflict. In the post-pandemic world and with businesses focusing squarely on driving forward their future strategies and pushing for success, organisations are now waking up to the potential of the HR function and its attendant metrics to help guide and influence effective business strategy.

HR reporting software is all about making sure you have the information you need at your fingertips. HR reports offer unparalleled visibility across the entire scope of the business, and how the information they provide is utilised, can very well be the make or break point which determines a businesses’ ongoing success.

What are some of the Key HR reports which you should look to leverage via HR software?

  • Recruiting report

    With the job market set to become increasingly more competitive, organisations can ill afford to head into the recruitment cycle without an adequate understanding of the type of talent who will be the right fit for their organisation. Recruiting reports are essential for not only helping you understand who the right candidate may be for the business but also allow businesses to effectively audit and assess their recruitment cycle in the past and make adjustments where needed.

Furthermore, recruiting reports are a perfect way to efficiently and swiftly identify gaps within your workforce. By leveraging data early on in the recruitment process, you are best placed to understand where existing biases may have influenced the hiring cycle previously and make adjustments where appropriate. By leaning on relevant metrics and data points, you are also able to gain a full understanding of what will be needed from a new hire in terms of the scope of their new role- an important element to communicate early on in the recruitment cycle.

  • Performance management report

    With the wider workforce having undergone a huge structural shift and embracing hybrid working models, businesses will understandably want to gain an effective measure of the output and productivity of their people, regardless of where they choose to work from. Productivity reports, alongside employee engagement and satisfaction reporting, offers businesses the information they need to be able to inform their ongoing strategy and more importantly, effectively drive forward conversations with employees around any guidance they may require.

Performance management reporting can also help influence any policies of learning and development which your organisation introduces, offering you unparalleled insight into the effectiveness of any training initiatives implemented and any course correction which may be required.

  • HR admin reports

    Perhaps the broadest in scope, HR administrative reports offer your business insight into a variety of factors, providing you with metrics you need to gain a more complete understanding of the overall makeup of your organisation

HR admin reporting allows you the ability to take a deep dive into the structure of your business, assessing employee numbers, gender ratios, education levels of employees, as well the ethnic makeup of your organisation. This is particularly key in identifying any gaps in your processes or incidences of bias- an element which is more important than ever as diversity and inclusion becomes a key priority for employees.

Supplementing any recruitment cycles, HR admin reporting also offers you insight into the turnover rates of your business- an element which is particularly important in influencing the acquisition of new talent and ensuring that you understand the reasons why people may choose to leave the organisation and what you can do to mitigate the impact.

  • Compensation report

    It’s important that a business has a clear understanding of how much they are spending on their people. Compensation reports collate information around employee pay rates, overtime and sick leave and ensure that you always have an oversight of the payroll expenditure.

Furthermore, compensation reports can help influence your decision making when it comes to establishing employee reward schemes. In a post-pandemic world, many organisations are finding it infeasible to reward their employees in a financial sense and are instead, looking for more creative ways to demonstrate to their people that they are valued. By leaning on reporting, you are more well placed to assess the effectiveness of any benefits or reward schemes and make adjustments where necessary.

Choose Advanced Cloud HR

In business, information is power. With your focus understandably on driving forward the success that you deserve, it's important to ensure that you have the information you need to be able to shape and guide your ongoing strategy.

Our Cloud HR software solution has been designed specifically to give you the oversight so crucial to understanding your business and any challenges that may lay ahead. With comprehensive HR reporting, you have the crucial information you need at your fingertips to push for success.

HR software has the power to free your HR people, relieving them from the burden of manual processes and allowing automation to take the strain. Your people teams are far more than task robots and we understand how important it is for your organisation that they are allowed to reach their full potential and become the driving force within the business that they deserve to be.

If you’ve found this guide helpful and would like to find out more about the power of HR analytics and metrics reporting in supporting your people teams, Cloud HR is a solution built specifically to empower your HR people, letting them focus on the Human, not the resources.

Get in touch today to find out more.

Blog Human Resource
Alex Arundale

Alex Arundale

PUBLISHED BY

Chief People Officer, Advanced

Alex joined Advanced in February 2016 with a track record in senior HR positions. She has been responsible for innovative strategies to lead the company’s talent management.

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