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HR data analysis: benefits and key data to explore

As companies, we are quick to analyse customer and sales data but we often overlook the data right in front of us; HR data. 

HR data can provide a gold mine for business leaders and HR analysis has been dubbed “Intelligent HR”, a new buzzword in the industry. It can provide a wealth of insight into your internal operations and can include absenteeism rates, employee turnover, career progression and training data, satisfaction levels, personal reviews to name a few. HR analysis can help you identify weaknesses to boost your productivity, efficiency and retention. 

In the past when businesses have used HR data, it has primarily been used to monitor KPI’s such as absenteeism by simply recording figures on a chart to be put into an employee handbook or filed as part of a tick box exercise. But today, businesses need to go further and dive into this data to analyse critical business insights and make smarter business decisions.

Benefits of analysing HR data and what to look at

HR data is arguably of the most valuable assets to a business and can provide many benefits when analysed well. But as we have discussed it can be a goldmine with lots of data to absorb and you may be questioning where to start. Let’s look at some benefits of analysing HR data and we will give you some tips of what data to explore, to achieve these benefits, as we go along. 

Improve recruitment

Recruitment is a costly exercise, and it can be notoriously tricky too. In fact, a staggering 66% of CEOs admit they have poor cultural fit differences when hiring in their organisation and a bad hire can cost you a whopping £200,000! Therefore, it’s vital to employee the right people to improve retention and cut recruitment costs; you can do this by comparing the skills of applicants with the skills and behaviours of your existing workforce. Also be sure to look at past recruitment data to guide you through the process.

Data to examine includes:

• Average cost-per-hire – the average cost of hiring a new employee
• New hire failure rate – the number of new hires who leave within a certain period i.e 6 months
• Time-to-hire – the average number of days between advertising the job and new hire starting
• Workforce demographics – 76% of job seekers look at the diversity of a business when applying for jobs, so consider analysing metrics such as ethnicity, gender and location.
• Applications per role – the number of applications received 
• Total headcount – the total number of employees in your workforce
• Acceptance rate – the number of job offer letters you send out divided by the number who accept

Identify skill gaps

In the same way that you can compare the skills of applicants with your existing workforce, you can also conduct a skills analysis to identify gaps in your current workforce, which could highlight a need for additional training.

Data to examine includes:

• Baseline of skills in organisation – a mapping exercise could be completed to visually identify gaps
• Trajectory of current learning path
• Internal hire rate - Only 29% of workers are currently happy with their career advancement opportunities
• Seniority and experience levels

Reduce turnover

Do you know which of your employees are leaving and why? Do some departments have a higher turnover than others? By exploring these questions you can put strategies in place to help reduce employee turnover, and predict which employees may be likely to leave in the future and try to prevent this.

Data to examine includes:

• Turnover rate – divide the number of employees who left your organisation over a period of time i.e. a year against the total number of employees
• Turnover rate per manager – the retention rate broken down by managers and departments will help identify if there are issues with poor management. Did you know 82% of employees say they would leave their job due to a bad manager?
• Talent turnover – the turnover rate of your high performing employees

Increase productivity

Performance metrics can be used to examine the employee ROI and identify your highest performers, and also your lowest. This will aid decision making and improve productivity as you can work with your lowest performers to improve their output and know where the costliest areas of your workforce lie. 

Data to examine includes: 

• Employee performance – can be tracked via performance reviews, assessments and peer/self assessment reviews
• Revenue per employee – total number of revenue divided by total number of employees
• ROI per employee – identify your top performers versus your worst
• Salary averages – sum of all salaries divided by total number of employees

Improve morale and engagement

According to HR Cloud, only 36% of us are engaged at work. By analysing HR Data you can identify the kind of work, culture and people that will make your workforce more engaged. 

Data to examine includes:

• Absenteeism rate – number of days absent divided by the number of working days expected multiplied by 100
• Rate of internal promotion - Only 29% of workers are currently happy with their career advancement opportunities
• Goal achievement – are goals being met?
• Performance output

Final thoughts…

As we have discovered, you have a wealth of internal HR data at your fingertips waiting to be analysed, which is often not utilised by organisations. When you dive into this data you can gain insights that help you make better decisions, improve efficiency, reduce costs and drive productivity. However, knowing where to start can be tricky and sometimes overwhelming, but we hope this blog post has given you some starting areas to set you on your way. 

For more information about how HR software from Pegasus can help you gather and analyse HR data then please contact us today. 

Posted On: June 08, 2023