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3 Ways HR Analytics Can Boost the Bottom Line

May 4, 2012

I work with a lot of human resources teams to help them improve employee and leadership engagement. I often hear that human resources departments don’t feel as valued as some of the ‘business lines’ within their organizations. But, we all know that human resources departments are the glue that keeps things together within our companies.

I saw this article about ways HR Analytics Can Boost The Bottom line that I’d like to share with you.

3 Ways HR Analytics Can Boost the Bottom Line

By: Brett Stupakevich

Media: Smart Data Collective

Human resources touches every department across a company, and people are often a company’s most valuable – and expensive – asset.

Why, then, do so many companies make critical HR decisions – like realigning workers to fill shortages in-house versus hiring new workers with the necessary skill sets – without grounding those decisions in HR analytics?

Tim Ringo, a partner in London-based Maxxim Consulting, notes in a recent blog post for Harvard Business Review that many corporations are still using hunches or gut feelings instead of data analytics to make the tough calls related to HR.

“In my experience, organizations that use workforce analytics have the most engaged workforces and they thrive in tough conditions,” he says. “Most importantly, they do fewer headcount reductions because they have lean and efficient workforces to begin with.”

Now that companies have slowly begun hiring again, here are three ways HR analytics can boost the bottom line:

Raise visibility. Creating a single view of all relevant workforce data is key to correctly aligning talent with the fluctuating needs of the business. For example, data might need to be viewed by business unit, product group and geography to find root causes, profit per employee or to compare compensation with performance.

According to an Aberdeen Group Survey, top performing companies are using HR analytics to provide business leaders visibility into talent data. In addition, the survey found that 38% of the top performing companies say they have a single source of the truth for HR data compared to 17% of companies in the lowest performing category.

Align HR data with business data. According to the Aberdeen study, 59% of top performing companies aggregate employee data with business data compared to 28% of the lowest performing companies. Furthermore, 54% of top performing companies combine talent management data with business data compared to 30% of companies in the lowest performing category. (Read More)

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