Human Resource Analytics Survey

LEVEL 1

At Level 1, HR mostly sticks to operational reporting. 56% of all organizations are at HR analytics maturity level 1.
The HR department seems to be stuck in “traditional” operational reporting. This means that they report traditional metrics such as headcount, attrition, labour cost and training cost.
These operational reports are usually generated with the use of a Human Resources Information Systems (HRIS)
This kind of reporting is part of day to day business and has a high hygiene factor.

Level 2 is all about advanced reporting. HR departments at level 2 proactively create relevant reports to support (strategic) decision making.
They apply benchmarks to HR data to make reports more meaningful. Additionally, metrics are reported multi dimensionally, then delivered to management and executives in clear dashboards.
Most organizations at level 1 already use a dedicated HRIS to keep accurate and consistent employee records. If your organization does not use such systems yet, you would do well to adopt it in order to work your way up to level 2.
A proper HRIS allows organizations to maintain reliable and consistent data on their employees. This systems constitutes a crucial step before beginning with HR analytics.
By using an HRIS, generating reports will become less time-consuming so HR can spend more time on becoming more strategic and working its way to the next level.
Moreover, it makes the analysis more reliable. It is not uncommon for level 1 organizations to discuss the data’s validity, instead of talking about what people data shows.

HR departments at level 2 are capable of operational and advanced reporting of HR metrics.
Around 30% of organizations are at this level while only another 14% of organizations are at a higher level.
At this stage the organization is able to report proactively. This proactive reporting provides multiple perspectives and is sufficiently advanced to influence (strategic) decision-making.
HR reports are descriptive and focused on efficiency. In this case, reporting is part of day to day business and still has a high hygiene factor.
In level 2 you should be careful not to invest too much time in generating new HR metrics. Instead, focus on the metrics that offer real strategic value to organization’s mains business challenges.
Most organizations at level 2 deliver HR metrics to managers and executives in organized dashboards. It is more important to show relevant information than to show all information.
Clear dashboards facilitate the translations of HR metrics into useful input for decision making.

Going from level 2 to level 3 primarily deals with the transitions from reporting to HR analytics.
Analytics is about statically analysing HR data in order to develop relevant (predictive ) models for better decision making. In other words, it begs the question: What can we learn from our HR data to make better people decisions in the (near) future?
When applying HR analytics, it is very important to start with a business problem of relevance to the organization. This way time is spent on solving real problems. Hence, remedying these problems will have the greatest impact on the organizations.
Applying people analytics will require you to combine different kinds of data. You will need HR data, like demographic, performance and hiring data , but also financial and operational data, from different systems.
It is therefore important to have a centralized HR (analytics) department and at least some level of data integration of the various systems. Organizations typically uses a business intelligence system to compound data from multiple systems, or to build up a database of relevant data that can easily be used for analysis.
After putting together all the necessary data, you can start to answering questions through statistical analysis. Managers and executives are typically short on time so there is no point in showing them complicated statistical models.
To ensure strategic impact, be certain to focus on the key business issues and to translate all results into actionable solutions.

At level 3, you are part of the top 14%.Only 4% of organizations have a higher HR analytics maturity level. Your organization has surpassed operational and proactive reporting and has succeeded in introducing more advanced analytics!
On top of that, your organization uses(statistical) modelling to solve business problems and, based on the data, is even able to predict the future!
As an HR professional working with HR analytics at maturity level 3, you can add tangible value to the organization by proactively identifying issues and recommending actionable solutions.

Level 4 is characterized by predictive analytics. Predictive analytics enables organizations to make even better decisions by showing their potential impact.
In addition, it will be possible to engage in scenario planning by forecasting what is likely to happen in the future.
This allows organizations to mitigate risks more effectively and thus engage in strategic workforce planning.
By utilizing the predictive analytics, it’s possible to tell how the workforce will develop, where leadership succession will be jeopardized and which position the organization will need to fill in the near future.
To make analytics predictive and to move to the level 4, you will probably have to add additional analytical capabilities to your team. In a level 4 organization it’s likely that you have a dedicated data scientist sifting through your people data.
As predictive modelling goes beyond a simple data analysis, you will begin to use tools that require more programming knowledge. An example of this is R, an open-source systems for statistical computation and visualization.

At level 4, you are part of the top 4% of the organizations.
You are no longer surprised that by the feats of HR analytics, because you’ve seen most of them already.
HR plays a major role in your company’s strategic decision making; it is aware of the impact of people policies and actively used a predictive models.
In fact, HR is entirely capable of playing a fully strategic role within the company.
Level 4 organizations are therefore more likely to have a Chief Human Resources
Officer (CHRO) in their Board of Directors, or have a people analytics centre of excellence that directly reports to the CEO.