HR Analytics & Reporting - Tools, Tips and Strategies for Success


The Human Resource Consulting Group

on Dec 21, 2022 4:57:40 PM

Your HR team probably has dedicated HR software and is already collecting loads of data. But having a set of data is not enough. It’s a crucial step to interpret the data to make informed and strategic decisions that maximize a company's human capital to reach business goals - this is where HR analytics and reporting come into play. 

HR analytics and reporting provide important insights for improving the recruitment process, boosting employee performance and productivity, and optimizing employee benefits plans. Here's everything you need to know about HR analytics and reporting, the tools you need, and tips to help you create a robust analytics strategy that drives business improvement. 

What is HR Analytics & Reporting and Why is it Important?

HR analytics involves gathering, analyzing, and reporting human resource data. It is the process of measuring how particular HR metrics impact the performance of a business so that more strategic HR decisions can be made to better attract, hire, and engage employees while improving overall employee performance. Once data analysis is complete, it’s necessary to do proper reporting, which displays the data analysis in a way that's easy for everyone to understand. There are four levels of HR analytics: operational, advanced, strategic, and predictive.

HR analytics and reporting are important because:

  • It provides crucial insights needed for decision-making in a crisis and high-change environments like the current shift to remote or hybrid work and increased use of automation to avoid disruptions and uncertainty.
  • It helps you make better business decisions to maximize productivity and a better work environment.
  • It helps discover the contribution of every employee toward meeting strategic business goals to improve revenue, reduce costs, and mitigate risks.
  • Establish a business case for HR interventions and determine whether they are effective.
  • Become a tactical or strategic partner instead of just an operational partner.

HR Analytics & Reporting Process: How to Conduct HR Analytics & Reporting

1. Determine stakeholder requirements to create an HR analytics agenda

Determining stakeholder requirements helps determine the most important data you need to collect. This requires an ongoing, proactive partnership with key stakeholders to understand the most pressing organizational problems. In some cases, human resources stakeholders can be executives, line managers, senior HR leaders, HR business partners, employees, and tech vendors. Knowing what to focus on helps you create a short- or long-term analytics agenda.

2. Identify data sources, collect, and centralize all your employee data

This step starts by combining HR data from different sources. For example, you can compare your annual engagement survey with your performance data to measure how employee engagement affects financial performance. Data sources can either be public or private. University libraries and government databases contain public data, while you can obtain private data from your Human Resource Information System (HRIS). Reconciling employee data from different sources creates a single source of truth for faster and less costly decision-making. Some of the places you can find different types of data are:

  • Human resource management system (HRMS) that contains recruitment data, employee demographics, employee performance data compensation, and disciplinary data.
  • Payroll data including costs, liabilities, and payroll taxes.
  • Performance Management resources that indicate employee skills, reviews, promotions and earnings changes.
  • Learning Management System (LMS) that contains data about professional development.
  • Sales tools for sales data that directly relate to employee performance.
  • Customer Relationship Management (CRM) which gives insights into the performance of customer-facing employees.
  • Economic, political and industry environments that can affect employee productivity 
  • Benchmarking with best-in-class businesses.

3. Build analytical capability

The next step is to develop the analytical capabilities of your HR team with the help of your business intelligence team. This is where you need to source analytical software that will help you with predictive, process, text, sentiment, and real-time analytics. The best analytics software should give results that are "rooted in an understanding of the data to be used and the context under which data were collected if any meaningful insight is to be gained…" According to a 2016 research on HR data analytics. Rather than chasing the next HCM or AI tool, as most tools rely on proprietary algorithms and unexplainable "black boxes", you should focus on finding tools that give results based on the underlying mechanisms of your business.

4. Create an HR dashboard to communicate results

Visualizing data makes it easier to analyze. An HR dashboard is a one-stop shop for all your HR data represented graphically or visually to ease monitoring and benchmarking and derive insights into HR metrics such as headcount, cost-to-hire, and time-to-fill. The visual dashboard can quickly identify a problem that needs to be solved, for example, improving retention or reducing cost-per-hire. The goal is to achieve particular outcomes that match business goals. You can start by handling the problems that are easy to solve but have a high impact on business performance. You can create an impact vs. effort matrix that lines up all your business problems from those with high impact and low effort to those with low impact and high effort.

5.  Continuous improvement

Continually monitoring the analytics process for inefficiencies, errors, and risks helps identify problem areas and prevent them in the future. Some ways to improve HR analytics include analytics training and using integrated analytics platforms that support a wide range of uses.

HR Analytics Metrics

HR metrics are measurements or data points that determine whether HR policies yield results that are consistent with business goals. Here are some standard HR metrics you can measure:

  1. Revenue per employee - Total company revenue divided by the total number of employees in the company to find the average revenue per employee. The figure indicates your organization's efficiency in getting the most results from your employees.
  2. Offer acceptance rate - The number of accepted formal job offers divided by the total number of job offers given in a certain period. A rate of 85% and above is desirable. You can use this metric to redefine your talent acquisition strategy.
  3. Training expenses per employee - Total cost of training divided by the number of employees. You can obtain the value of this metric by also looking at the training efficiency, which is employee performance improvement after training. 
  4. Involuntary turnover rate - The number of employees involuntarily terminated divided by the number of employees in your business. This metric can be a way to redefine your recruitment strategy.
  5. Time to fill - The number of days it takes to fill a vacant position from the day of advertising your job opening. This metric can help identify where you're spending most of your time.
  6. Time to hire - The number of days it takes to hire a candidate after approaching them. This metric can help you improve a candidate's experience during hiring.
  7. Absenteeism - The number of days missed divided by the total number of workdays. This metric can offer insights into employee health and job satisfaction.
  8. Cost per hire - How much it costs to hire a new employee. This metric can help identify cost-cutting areas.

HR Analytics & Reporting tools (HCM software)

In the era of big data, a powerful analytical tool is needed to process data, such as human capital management (HCM) software. Human Capital Management software gives you insight into the performance of HR activities by gathering, analyzing, and structuring information to generate reports, charts, and other visualizations that you can display on dashboards for better decision-making. HCM software can help improve employee organization, predict productivity, and show the Return on Investment (ROI) from HR efforts through functions such as:

  • Enabling better talent acquisition and management. With HCM tools, you can track metrics such as cost per hire, candidate experience, quality of hire, and application completion rate. These metrics let you see the strategies that are working and those that need improvement. 
  • Optimizing budget allocations. Analytics helps maximize the company budget by using functions that generate the most ROI. For instance, analytics tools can help identify which employee learning and development programs are increasing employee performance and which programs are not delivering the same value. You can then invest more in the programs with a higher ROI and cut off unproductive training programs.
  • Enhancing employee satisfaction. HR analytics assesses employees' day-to-day experience at work. By investigating metrics such as turnover rate and absenteeism, you can discover employee motivations and use that information to create a more desirable working environment with a positive company culture that will improve employee experience and consequently, productivity.
  • Discovering trends to guide business decision-making. Most HR analytics platforms use machine learning to spot behavior or performance patterns such as commute times and recruitment source quality.
  • Managing employee performance. You can use HR analytics and KPIs to assess each employee's ROI and classify the top and bottom performers. Understanding what motivates your employees can help improve their performance. You can use analytics tools to rank employees based on particular metrics such as customer satisfaction and acquisition when dealing with a sales team. You can use these findings to assess employee skills and identify skill gaps for employee training and development.  

HR Analytics & Reporting Best Practices

1. Encouraging a culture of data-based decision-making 

According to a survey, 90% of Human Resource Officers employ HR analytics, but only 42% have a data-driven HR culture. Employing a data-driven culture improves data practices, ensuring that you enter consistent and reliable data into your HR system. Some ways to create a data-driven HR culture, according to a case study of NRECA (the National Rural Electric Cooperative Association (NRECA) include:

  • Beginning the data culture from the top and keeping all employees informed about the importance of maintaining systems and records.
  • Encouraging employees to ask questions and ask for evidence and modeling data curiosity.
  • Keep your workforce systems and employee records up to date. You can have a dedicated data and analytics staff with the power to make changes.
  • Centralize data and allow for free access to allow for easier decision-making.
  • Include actionable data in your most important decision-making processes.

2. Focusing on at most 7 KPIs that relate to business goals

Measuring too many KPIs can make you feel overwhelmed and lose focus. Study shows that the human brain can hold seven pieces of information in memory, and even less of you are dealing with complete words instead of numerics. It’s important to only focus on two to five KPIs for each of your business goals by managing priorities based on the growth stage of your company.

3. Identifying the right mix of analytics tools

HR data mining and monitoring tools are available in abundance. It’s important to deeply understand the required features and functions to tackle the issues. Some of the most common features to consider when choosing HR analytics software are scalability, user-friendly interface, reliable support, cloud-based technology, real-time analytics, centralized admin system, and website compatibility for mobile devices. You can consult a professional if you are having difficulty deciding which tool to use for your analytics.

4. Aligning data collection and use with industry regulations

The General Data Protection Regulation (GDPR) dramatically increases the expectations on businesses in managing, using, storing, securing, and processing personal data. HR is a custodian of large volumes of confidential data and is responsible for ensuring data safety and accuracy. Failing to adhere to GDPR rules puts you at risk of penalties. Some of the aspects of GDPR you should adhere to are:

  • Transparency about how you use personal data.
  • Complying with individual rights to access, object, rectify, restrict, and erase data.
  • Processing data over strictly provided legal grounds.
  • Ensuring data security by quickly recognizing, isolating, mitigating, and responding to security incidents.

Find an HR Analytics and Reporting Solution That Suits Your Needs

HR analytics are crucial in the entire employee life cycle from recruiting to training and succession planning. Investing in the right tools and methods helps obtain accurate data that will inform business strategy, which requires finding a provider who will provide a solution that is customized to your specific business, industry, or locale because HR analytics tools are not one-size-fits-all. 

If you need to start implementing data-driven HR into your organization, get in touch with us to help you find a provider customized to your unique needs today. 

People Analytics Product Profile

Topics:Connecticut HRHR AnalyticsHR Reporting

Subscribe to Updates


People Analytics Product Profile

About HRCG

The Human Resource Consulting Group, LLC (HRCG) is a full-service HR outsourcing firm, payroll processor, compliance manager, time and attendance, and benefits administrator.

Contact Us →

Are You At HR Risk GIF

Call us today at (203) 881-1755

Or click to get a quote

Get A Quote