Human Resource HR Analytics and Audit

Human Resource HR analytics and audit greentick

Introduction to Human Resource HR Analytics and Audit

Human Resource HR Analytics and audit is about analyzing an organizations human resource problems through the use of data. Widespread digital and cultural changes in the modern workplace have started to redesign and redefine both the culture of the workplace along with the structure of the organization and, in various cases, the work itself. Organizations are now depending more heavily on data to search, hire, and manage talent more than ever before. Traditionally, a considerable amount of work in HR is based on intuition hence it has no measure of success. However, HR analytics has the potentiality to change all of this. Nowadays organizations are progressively adopting this modern HR concept.

It is the use of statistical methods and analysis of factors affecting employee in order to enhance business outcomes. The term Human Resource HR analytics and audit is also used synonymously with people analytics, workforce analytics or talent analytics. Although there are some subtle dissimilarity in how these terms are being adopted. HR analytics enables HR practitioners to make data driven decisions. This assists them to attract, manage and retain top talent in the organization. It enables HR department to answer critical questions about their organization and maximize employee productivity.

HR departments have been accumulating massive quantities of HR data for quite some time. However, this immense data have not been used for decision making process in HR issues. Once organizations begin to analyze their human resource issues by utilizing those data, they are involved in HR analytics. HR analytics is a data driven approach towards human resource management. This enables HR professionals to cease making decisions based on hunches and intuition.

What to Focus on?

A major focus of most HR departments is solely on reporting employee data. In modern data driven economy, this is not enough. Maintaining records is insufficient to add any strategic value to the organization. As Carly Fiorina, former CEO of Hewlett-Packard famously said “The goal is to turn data into information and information into insight”. This statement is also relevant in HR sector. Accomplishing such analysis empowers HR department to be more associated organizational strategic decision.

Human Resource HR analytics and audit facilitates HR professionals to enhance their operations and decision making with the use of data. Moreover, organizations realize their success depends on human resources. HR analytics can illuminate the path from intangible theory based decision to ROI. For maximum advantage of HR analytics, organization has to connect HR data with organization’s strategic objectives. The application of HR analytics results in a wide array of strategic and operational advantages to HR department such as:

Better Human Resource HR decisions through Analytics and Audit

Human Resource HR analytics and audit helps to increase the performance of human resources. In addition it provides a better understanding of what motivates employees to increase their work productivity. Also, How organizational culture affects job performance of employees. One of the essential roles of HR analytics is to provide access to critical data insights related to the organization’s workforce. Then, analyze for making better decisions.


Using HR analytics, organization can match the right candidate to right job by detecting traits that differentiates top performers. Prospective candidates can be matched against a list of predictors of performance generated from existing employee data. The use of machine learning algorithms on candidate’s data allows organizations to ascertain the best matching talent. Consequently improving the quality of hire.


According to the research conducted by SHRM, the replacement cost of an individual employee can be as high as 50% to 60%. With overall costs ranging anywhere from 90% up to 200%. Hence, employee retention is a top priority for the HR department. HR analytics is a vital means to identify the departments affected from high attrition and the reasons  behind. Further, by the use of employee data, recruiters can identify a pattern of high performing employees. Then, appropriately alter their hiring and retention strategy. It can also support the HR department in ascertaining the activities. This provides the highest impact on employee engagement allowing the organizations to invest in such activities.


As competent candidates become more challenging to search and retain, improvements in performance appraisal is valuable. HR analytics leverages the employee performance data to ascertain top performers. The factors to consider are previous work experience, length of employment, and their reporting authority. Career advancement is also an essential element to monitor. Because, if the job does not satisfy them employees leave the job. Leadership traits help organizations determine which characteristic associates with prospective leaders. HR department can then nurture this potential which can result in long-term ROI for the organization.

HR as a strategic partner

The implementation of HR analytics can offer a unique advantageous position to HR department to validate its importance and its function as a strategic partner in a business performance. HR professionals can present business leaders with verifiable data to defend their talent hiring, engagement and retention policies.

How to succeed through Human Resource HR Analytics and Audit

For organizations to be successful, its workforce decisions should be supported by data. For instance, Google’s People Analytics team is perhaps the most famous example of implementation of HR Analytics with exceptional results. At an early stage Google recognized the worth of creating a people analytics department to optimize the HR functions based on data insights. The company takes all data driven decisions. Through a combination of employee surveys and productivity analytics, they discovered that essentially effective managers have eight key behaviors and they developed a management training program that incorporated these eight behaviors which led to better and more productive managers.

Likewise, ConAgra Foods Inc. use predictive analytics software to figure out which key talent is more likely to leave and why. They observed operations with high attrition and those with low attrition and analyzed 200 factors which have likely contributed towards employees quitting their jobs. In addition, they discovered that salary was not even one of the top ten factors. Rather, the number of internal recognition employees obtained during the employment period was more strongly correlated with employee retention.

Similarly, the Wall Street Journal published an article entitled “The Algorithm That Tells the Boss Who Might Quit”. This article examine how Credit Suisse, a global financial services company, is capable of predicting employees who have high chance of leaving the company. Moreover, they can also detect why these employees might leave the company. Managers use this information to decrease turnover risk factors and retain their employees. Furthermore, special managers get training in order to retain the high performing employees with high risk of attrition. This pro-active approach to employee retention saved Credit Suisse approximately $ 70,000,000 a year.


Even though analysis of HR data is essential for data based decision making, managing human resources data of an organization is not a simple task. HR tools produce a massive amount of data every single day. It is not clear on how to use these data for a specific decision making process. it is tough to access the true power of HR analytics. There are numerous challenges that organizations must overcome in order to harness the benefits of HR analytics:

Integrating data

There are numerous HR tools serving different HR functions in an organization, so there are several sources of data working in isolation. The various HR data sources like HRIS, applicant tracking system, attendance & payroll system, performance management system or any other HR tools generates its own data and integrating it with the other sources of data is a major challenge for HR professionals. HR professionals use data from many sources on making strategic business decisions. In addition, HR practitioners require organized data for decision making. They obtain, clean, consolidate and analyze data from several departments along with multiple business functions.

Lack of analytic skills

Organizations promote the application of analytics in HR functions. But in reality, Most HR professionals lack analytical abilitiesed. A majority of them need appropriate training on application of analytics to learn the art of translating data into meaningful insights. This particular lack of skill creates the successful application of HR analytics a challenging and complex task in most organizations. Taking into consideration the technical aspects involved, most HR professionals hesitate to learn and implement the skills required for HR analytics. The HR professionals would significantly put their faith on their human intellect and understanding than receiving training on HR analytics tools.

Lack of resources

Data analysis needs a significant IT resources for its implementation. A large number of smaller firms simply don’t have the required infrastructure for implementing analytics programs.


Hence, one could conclude that the human resources analytics is implemented with the intention to validate the impact that an HR department has on the organization along with facilitating to acquire strategic insights. It also advances the skills to model how workforce trends impacts revenue and profits efficiently. Therefore, modern HR department require data-driven, business-integrated, agile approach to attract, develop and retain high performers. These essentials demand not merely a new organizational model for HR itself, but also an immense retraining of HR professionals. In addition, they also generate an unprecedented opportunity for HR professionals to play a prominent role at the topmost levels of business strategy.