HR analytics will have a major impact on organisations’ decision-making by 2025 and this could help to enhance the influence of the HR department, according to a pioneering academic study drawing on the expertise of HR analytics practitioners working in the field today.
But the study also suggests that the distinct HR analytics functions now emerging in larger companies may not have a long-term future, with many practitioners predicting that there will be a need for organisation-wide analytical teams working independently of individual disciplines. Such a function would work across HR, marketing, finance and other areas to “identify valuable business cases and opportunities to improve business performance”.
Writing in the Journal of Organizational Effectiveness: People and Performance, Sjoerd van den Heuvel of the University of Applied Sciences Utrecht, and Tanya Bondarouk, Professor of HR management at the University of Twente, set out to address the question of what HR analytics will look like in 2025, and how it will differ from the situation in 2015.
The authors began by reviewing the growth of technology in HR since the 1980s, with early automation of HR processes such as payroll leading on to early HR information systems in the 1990s and the development of e-HRM which moved beyond basic administrative systems to encompass talent acquisition, performance management and compensation management.
“Forward to today, and the explosion in self-reporting on social media facilitates the datafication of sentiments, emotions, interactions and relationships, with the outcome that our personal and professional lives become increasingly ‘datafied’,” with companies less cautious about digitising people management, a growth in “self portals”, and strategic services becoming more common.
Going back to basics, the authors define HR analytics as “the systematic identification and quantification of the people-drivers of business outcomes, with the purpose of making better decisions”. They also distinguish between three terms often used interchangeably:
- HR analytics, which suggests that responsibility for identifying and quantifying the people drivers of business outcomes rests within HR;
- Workforce analytics, which is detached from HR, but “may still have an exploitative association”; and
- People analytics, which they suggest may be “the most neutral and employee-friendly label”.
They also spell out the difference between “metrics”, which is simply the data presented in tables, charts and dashboards, and “analytics”, which seeks to explain why something occurred, why there were differences in outcomes, or how likely it is that something will occur again in future.
Presenting the findings of their research, Van den Heuvel and Bondarouk compare the situation in 2015 and practitioners’ expectations in 2025 across four main topics: the application of HR analytics, the value of HR analytics, the structure of HR analytics, and system support for HR analytics.
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