HR Analytics: Top 3 Opportunities for Optimum ROI [Part 1 of 2]

HR Analytics might seem to be the ‘latest thing’ in today’s high-tech, algorithm-driven world; something you perceive isn’t really part of the business ‘norm’. If that’s your take on it, you couldn’t be more wrong… because HR Analytics is here to stay.

Whether you’re running an HR team, you’re a C-Suite business leader, a Procurement business leader, Hiring Manager, MD or Finance Director, data is today’s primary currency for making decisions about your organisation’s workforce.

In this era of accessible, cost-effective technology, the potential business impact from people analytics is unprecedented. And that’s what I’m going to showcase to you right here.

But firstly, what is HR Analytics?

It’s a data-driven approach to workforce decision-making. Rather than approaching HR and people management on ‘gut feel’ or ‘how we’ve always done it’, HR data enables business leaders to make statistically and scientifically informed decisions about their workforce; a process that is proving to be increasingly powerful in strategic labour force planning, hiring and workforce policymaking.

HR Analytics is also known as people analytics, workforce analytics, talent analytics, and HR data.

Today, we’ve brought together the top 3 opportunities to use your organisation’s HR data, so that you get the most effective, high-impact outcomes from it.

These ideas come from our own experiences, as well as those of our clients – most of whom are amongst Australia’s biggest and most successful corporates. So, if you’re just starting out in the realm of HR analytics, keep these ideas close by, as they will provide you with a valuable benchmark, to establish a successful HR-data-backed workforce strategy.

1. HR’s Path to Strategic Business Partner

  • It’s one thing to have the data, but another to be able to analyse it
  • Reporting employee data alone, won’t cut it in today’s data-driven economy: HR needs to take things further
  • HR is now turning ‘data into information and information into insight’ (Source)
  • By providing these insights, HR steps onto the stage of strategic business decision-making. Here’s how it works in practice (Source):

HR Analytics


And as you’re starting out, even if you’re already set-up to extract data from your workforce, here’s a list of the key data points you need to be mindful of:


HR analytics


  • The key issue to consider here is this: when HR data is applied to business and workforce strategy, better business decisions are typically made, employees stand to benefit and are happier, output and processes are improved, and incredible value is added to the bottom line
  • Thanks to big data, HR analytics are turning data into insights, enabling organisations to make informed workforce decisions. Such as predicting when employees will leave the business, where they can source the best candidates for their needs, insights on talent attraction and engagement: all valuable HR contributions setting HR’s path to strategic  business partner


2. HR Analytics: ROI – The High-Impact OPPORTUNITY for Better Business Decisions

  • The examples we’ve provided above, are the basic, generalist HR metrics. As you delve further into the analyses, you’ll unearth subsets of information that, of themselves, will be worthy of your focus, and contribution to business decision making
  • The ultimate means for HR to become a more credible, strategic business partner is to demonstrate impact on ROI, and as such, the business needs to see both the cost and revenue impact of HR analytics. Yes, some of these are included in our list above, however looking at these metrics through a cost and revenue lens, gives the data a different take. Here’s a starter….

HR Analytics


  • Here it’s critical to factor in the people-related drivers on business performance, which takes the guesswork out of workforce planning and management
  • The ultimate goal is to use the analyses of these data points in presenting business case solutions to leadership, so HR is no longer considered ‘soft’ but a crucial contributor to strategic forward planning
  • Applying the right analyses on your workforce data requires the right analytics tools – this is the ‘analyse and data mine’ component of the process in Diagram 1, above, where your technology stack feeds the various workforce information for analyses and output. The most popular we’ve come across include R (free to download), Python (R’s primary competitor), Peakon (claims the highest industry NPS), Visier (talks about more actionable people insights), Power BI (a Microsoft product), closely followed by its partner integration tool, Agile, and finally Tableau (known as the best for data visualisation)

3. Find the Best Talent in the Market

There are multiple areas in which HR analytics will enable you to access better talent for your business. Here are just a few.

  • HR analytics will enable you to become better at diversity hiring. HR needs to better understand a way to hire based on the skills sought by the business, not by conscious or unconscious bias or ‘gut feel’ – a common HR characteristic
  • There will be multiple drivers of engagement in your business, and these will differ based on department, seniority, skills set, and longevity in the business (amongst other things). The data from HR analytics will enable you to determine what drives engagement and what stagnates engagement, across the different categories of your workforce. Upon knowing this, you’re in a far better position to hire for a better ROI, you’re directly impacting productivity, tenure, talent rotation – many of the ‘cost’ measures mentioned above
  • HR analytics will shed a light on the paths to improvement, across the workforce. For example, skills gaps, the need for education and training, those successful (and unsuccessful) employee initiatives. Knowing this will again, provide quality insights when it comes to hiring new talent – whether they are permanent or contract
  • Being able to assess the long-term value of talent. HR analytics can, over time, provide trend analyses on the value of people in the business. This can then tie back to leadership potential, with a positive impact on the hiring process and can improve talent management strategies throughout an employee’s lifecycle in the business

Where is your business at with HR analytics?

Are you gathering and analysing data yet?

Do you have advanced insights?

Or are you just getting started?

I’d love to hear your experiences of working with HR data or have a conversation. If that’s of interest, you can reach out to me here.

Next week, we’ll cover another 3 of the major opportunities for your business to reap greatest ROI from your HR analytics.

Look out for it, or provide your details at the bottom of the page, and we’ll get it to you by email.