What Is Analytics?

What is analytics?

Analytics is the process of reviewing data to identify levels, trends, and patterns and to draw conclusions or make decisions based on that data. There are four broad categories, or types, of analytics:

1. Descriptive–analytics used to measure what has been done in the past.

2. Diagnostic—analytics used to measure past results.

3. Predictive—analytics used to predict future performance.

4. Prescriptive—analytics used to make decisions about taking action.

People analytics

In HR, the focus of analytics is on people. People analytics is the collection and use of data to improve business outcomes. Data is used to make informed decisions related to hiring, creating and sustaining a positive employee experience, ensuring that employees are contributing in meaningful ways to drive strategic outcomes, to analyze structure and deployment of human resources, and much more. It’s all about collecting and transforming HR data and organizational data into actionable insights to improve business performance. 

Analytics is not the same as data

Analytics is not the same as data, although analytics requires the use of data. Data itself lacks meaning. It is the analysis of that data that drives important insights to help organizations make strong decisions, to improve their processes and—from an HR standpoint—to provide an environment where employees can thrive while staying engaged and productive.

How HR professionals use analytics

HR professionals use people analytics to drive value across the employee lifecycle by measuring things like: revenue per employee, quality of hire, turnover, HR effectiveness, DEI metrics, and much more. Analytics can also allow HR professionals to draw correlations between different pieces of data. For instance: how turnover might be related to age, tenure, department, manager, or other factors—or how levels of overtime might be related to productivity.

Competencies required for effective use of analytics

Traditionally, those in HR-related roles have had strong people skills—the ability to communicate effectively, manage conflict, train, and develop staff, and work effectively through others. Those skills are still important, but today’s HR practitioners also need to have data analytics competencies. They need to be able to think strategically to determine how data can be used to make informed people decisions. 

Analyzing data to draw sound decisions is an increasingly important part of any HR leader’s role.