Human resources has access to large quantities of data about employees. This data is often stored in filing cabinets or spreadsheets. While you can find individual pieces of information fairly easily with this system, it’s much harder to see the big picture. There’s just too much data for that to be practical.
That’s changing as more companies move towards HR technology. With human resource information systems (HRIS), data is stored centrally, and reports can be easily created. HR departments now have access to valuable HR reporting and analytics.
Here are seven reasons why you need reports and analytics.
1. To Make Better Hiring Decisions
Hiring decisions can be hard, but it’s easier to make the right choices when you have access to reports and analytics. With information about past hires, you can make smart hiring decisions going forward.
For example, if analytics show you that candidates with less than five years’ experience have never excelled in a certain position, you could start looking for people with more experience.
2. To Forecast Hiring Requirements
In some industries, hiring requirements can be unpredictable. With analytics, you can view past hiring needs and use that data to predict future needs. This helps you get a head start on hiring.
When the business owner tells you to hire new employees, you’ll already have some good candidates in the pipeline.
3. To Identify Employee Turnover Patterns
Turnover may seem unpredictable, but with analytics, you can look for patterns. For example, employees often leave jobs for promotional opportunities or for better pay and benefits. You can identify “star” employees from average employees and ensure you proactively work to retain them and make them feel valued.
Insights from analytics can also help indicate that employees are disengaged and likely looking to leave. If you have weak performers, it would cost less knowing they are leaving vs. firing them. If people are disengaged and aren’t looking to provide value, you can replace them early on to ensure they’re not leaving a hole on your team. With these types of insights, you can develop a strategic approach to ensuring employees are always providing value in the business, which is more effective than running a business blind.
4. To Track Employee Performance
Some companies are doing away with yearly performance reviews and replacing them with ongoing feedback. With analytics, you can view trends in this feedback and identify the company’s best performers.
These high performers can then be targeted for promotions, additional training, or other opportunities.
5. To Discover Root Causes of Issues
As an HR professional, you hope employees will come to you when they have a problem. However, that doesn’t always happen, which makes it harder to identify the root causes of issues in the workplace.
With analytics, you can get to the bottom of this. For example, employees who aren’t engaged could all be in contact with the same poor manager.
6. To Manage Compensation
Managing compensation is a delicate balance. You need to ensure employees are being paid well enough to perform well and feel satisfied, while also meeting the business’s budget needs.
Analytics help you reach this balance. You can easily view employees’ pay scales, benefits, and other types of compensation, and compare that data to employee performance, your budget, and other factors.
7. To Become a Strategic Partner in the Business
Traditionally, the function of the human resources department has been more administrative and transactional. Now that HR technology is replacing paper and spreadsheets, HR professionals have more time to tackle more important tasks. They can use their new HR reports and analytics to make strategic decisions for the business. This could include helping the company grow with compensation management.
With so many benefits, it makes sense to embrace HR reporting and analytics. You can put your vast amount of HR data to use and improve HR functions, as well as the performance of the overall business. To get started, you can swap your spreadsheets for a human resource information system. Some vendors offer these systems for free, so there’s no reason not to make the switch.
With the help of a total compensation partner and an HRIS, insights and patterns are evident.