Could HR be the most data driven function?

If you analyze functions like finance, IT, and marketing you will find common drivers of success. They include: people, data-driven analytical decision-making, and showing how their actions directly impact strategic goals at the end of the day. Historically, HR executives and practitioners have faced insurmountable challenges from lack of data.

This competitive urgency to utilize HR analytics isn’t new; however, in the past five years there has been a dramatic increase “data-driven equals high business impact” school of thought. Obviously, most HR functions are yet to make a major shift to the high business impact approach. Fortunately, there are a few organizations like IBM, Google, and Amazon that have demonstrated the success of this “data-driven” analytical approach to HR.

According to Deloitte’s Global Human Capital Trends 2016, “As technology makes data-driven HR decision-making a possibility, 77 percent of executives now rate people analytics as a key priority, up slightly from last year. In response, companies are building people analytics teams, rapidly replacing legacy systems, and combining separate analytics groups within HR into one strategic function.”

HR Analytical

Before considering this shift, HR executives need to fully understand the many benefits of HR analytics. Much progress is being made and increasingly more companies are now looking to connect their people and business data as a single source of decision-making. With a data-driven business approach, HR can help the organization develop a workforce plan that makes optimum use of talent investments while at the same time effectively monitor end-to-end HR functions, including many other initiatives.

HR Data Driven Function

A recent study by the Harvard Business Review group found that companies that companies that managed their workforce using data and analytics were able to improve their profit by as much as 65 percent.

Unfortunately, the economy has staggered in last few months; thousands of new jobs created has now been perished, companies that were making profits are now writing Chapter 7 or 11 filings. Innovation in talent management and workforce panning strategies is required to help companies make profits again.

The coming years will likely remain challenging for HR executives. Senior HR leaders will need to be able to stand alongside the CEO to make better business decisions on areas such as:

HR Data Analysis


This is tied in with foreseeing the risk for the most turnover — in which capabilities, which units, which areas, and what positions and demonstrating the situations ahead of time to mitigate the challenges.


Distinguish where the most risk of churn will be, and who is in risk for it. Figure out what assets should be best utilized for training, onboarding and retention activities.


Create profiles of which applicants are at high risk of leaving and when. Make models of which candidates are probably going to experience a drop in engagement and productivity.


Forecast who, among recently recruited employees, will be the star performers, and decide if their onboarding and training should be fast-tracked.

Most organizations need innovation that can be utilized seamlessly and is easily available using the cloud so it’s consistent no matter how you look at it, is sufficiently accurate, and agile enough to refocus. This is exactly what data-driven analytics offers: the ability to take the past and understand it in terms of common factors and vital relationships, and to utilize that data to demonstrate and forecast the future, yet to make sound business decisions.

In order to satisfy these needs, the next section provides action steps in the highest impact areas, such as retention, training, workforce productivity, and innovation.

Quality Hires

In today’s hyper-competitive business world, CEOs expect HR to participate in key corporate goals including revenue, innovation, and productivity. Using data and analytics, HR can show where and how it impacts the organization’s strategic goals. For instance, by designing an effective recruitment and reward system, HR can directly decrease attrition and increase the revenue of the company by saving the cost of training new hires.

A recent study by the Harvard Business Review group found that companies that managed their workforce using data and analytics were able to improve their profit by as much as 65 percent.

Workforce Productivity

Out of all strategic business functions, HR is responsible for one: increasing the efficiency and productivity of the workforce.

HR can utilize analytics to identify key factors that directly affect productivity (i.e. motivators, rewards, training approaches, etc). Working with the CHRO, HR can take steps to quantify the impact of any increase in productivity, all thanks to better hires.


In a rapidly changing world, companies can only succeed if they’re agile and adapt quickly.  HR can make a contribution to this effort by using analytics to come up with a hiring procedure that selects individuals with these two key skill sets. 

Analytics is also used to improve development and training processes in order to increase the speed and adaptability of current workers.  Data may also help managers identify contingent workers so the workforce may be flexible and rapidly adapt to the ever-evolving levels of business growth.

Corporate Innovation

The world’s most valuable companies like Apple, Google, Microsoft, and Amazon have one thing in common – they are all serial innovators. Increasing innovation is tied to strategic goals.

Using analytics, HR can increase their contribution towards the business goals of the organization. HR executives can help design recruiting teams that effectively attract the best innovators to the company. Data can also help HR decrease the attrition rate of its top performers.

Talent Management

The biggest challenge in the any talent management process is getting managers to follow HR’s plans and protocols. Fortunately, it’s all about the numbers when it comes to influencing and changing behavior of executives and managers.

Use data to quantify this impact and get managers to take more initiatives during the recruitment process. There’s nothing company executives love more than analytics and incorporating them into their everyday plans and devise new plans that will increase the likelihood of innovation.

Predictive Analytics

Even the most well-intended employee retention strategies can be limited, doing little to increase employee engagement and morale. In most organizations, retention programs are too weak, which increases costs and decreases overall effectiveness.

The answer? Spending your dollars on retention programs that’ll have the most impact. This requires organizations to make use of sophisticated tools and technologies, and adopt a more analytical approach to increase their ability to hire and retain talent.

HR, with its understanding of people analytics, is uniquely positioned in the organization to make strategic workforce decisions with data to back them up.

People analytics is the art of connecting data to dig and share insights about your workforce that will help you make better business decisions. For an organization to reduce turnover rate, leaders need to become more data-driven and seek answers from exploratory analytics and predictive analytics.

HR Resources

Data can help HR reveal with programs and initiatives have the highest strategic impacts. Using that information, HR can more accurately funnel their resources into programs that drive maximum impact. Data can also help identify talent, teams and departments that have the highest impact on the strategic goals of the company.

At the same time, analytics can help HR measure the effectiveness of new initiatives and programs. Using the analytics model, HR can even help in the business decision making to support functions such as marketing, finance and IT.

Hiring Efficiency

According to research by the Boston Consulting Group, recruitment function has the highest impact on an organization’s corporate revenues and profits. HR can make the highest quality of new hires using quality data. And finally, data can be used to improve the performance of new hires.

The strategic shift towards the incorporation of data and analytics is long over for HR. This major shift will allow HR to more effectively interact with other business functions.

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Priyansha Mistry
Currently editor at The HR Digest Magazine. She helps HR professionals identify issues with their talent management and employment law. | Priyansha tweets at @PriyanshaMistry

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