What Is HR Analytics and Why Is It Important? - FChain

HR analytics is one of the most in-demand fields in today’s world, and interest in it continues to grow.

To conduct any kind of analysis, we first need data. The process of collecting data is known as Data Mining. Through HR analytics, information related to people, labor, and workplace environments is analyzed, producing reports about both the past and present state of an organization.

By analyzing past and current data, it becomes possible to forecast the organization’s future condition. This process is called Predictive Analytics.

Predictive analytics is a method of making future-oriented forecasts based on historical data. In HR, predictive analytics can be applied in multiple directions. For instance, by analyzing data related to employee offboarding, it’s possible to predict how many employees may leave the company in the future and to inform management in advance. Most importantly, these predictions can serve as a foundation for developing strategies that minimize potential risks and losses for the organization.

After obtaining the results of predictive analytics, it’s possible to move to the stage of Prescriptive Analytics. At this stage, specific models are built, and an action plan is developed.
For example, measures such as improving working conditions, increasing salaries, implementing bonus systems, and other motivational initiatives can be carried out based on the results of prescriptive analytics.

HR analytics can be applied across all functional areas of HR. Some of the key domains include:

• Recruitment: Analyzing and evaluating the effectiveness of candidate selection and hiring processes.
• Compensation & Benefits: Optimizing salary structures and bonus systems, analyzing compensation requirements.
• Offboarding: Analyzing reasons for employee turnover and developing strategies to reduce future departures.
• Leave Management: Ensuring efficient use of employee leave and optimizing leave policies.
• Performance Management: Evaluating employee performance, analyzing efficiency metrics, and developing improvement plans.
• Employee Engagement: Measuring employee satisfaction and motivation, improving workplace culture and environment.

In today’s business landscape, HR leaders must analyze the HR dimension of the organizations they manage. Doing so enables them to make more accurate, data-driven strategic decisions and to implement effective transformations across the company.