Exploring The 4 Types of HR Analytics

Human resources (HR) departments are increasingly turning to data and analytics to make informed decisions about their workforce. This practice, known as HR analytics, involves collecting and analyzing data to gain insights into employee performance, engagement, and retention.

But not all HR analytics are created equal. In fact, there are four distinct types of HR analytics that organizations can use to gain different types of insights. In this article, we’ll explore the four types of HR analytics and how they can benefit your organization.

What is HR Analytics?

HR analytics is the process of collecting, analyzing, and interpreting data to make informed decisions about the workforce. This data can come from a variety of sources, including employee surveys, performance evaluations, and HR technology systems.

The goal of HR analytics is to provide HR professionals with actionable insights that can help them improve employee engagement, retention, and overall performance. By using data to inform their decisions, HR teams can make strategic and effective decisions that benefit both employees and the organization as a whole.

The Four Types of HR Analytics

Descriptive Analytics

Descriptive analytics is the most basic type of HR analytics. It involves collecting and analyzing data to gain insights into past events and trends. This type of analytics is often used to answer questions like “What happened?” and “Why did it happen?”

Descriptive analytics can provide HR teams with valuable insights into employee performance, engagement, and retention. For example, by analyzing data from employee surveys, HR teams can identify trends and patterns in employee satisfaction and engagement. This information can then be used to make improvements to the workplace and address any issues that may be negatively impacting employee morale.

Diagnostic Analytics

Diagnostic analytics takes descriptive analytics a step further by attempting to answer why something happened. This type of analytics involves digging deeper into the data to identify the root causes of certain trends or events.

For example, if an organization’s employee turnover rate has increased, diagnostic analytics can help HR teams identify the reasons behind this trend. By analyzing data from exit interviews, performance evaluations, and other sources, HR teams can gain insights into why employees are leaving and what can be done to improve retention.

Predictive Analytics

Predictive analytics uses data to make predictions about future events or trends. This type of analytics is often used to answer questions like “What is likely to happen?” and “What will happen if we take a certain action?”.

Predictive analytics can be incredibly valuable for HR teams, as it allows them to anticipate potential issues and take proactive measures to address them. For example, by analyzing data from employee surveys and performance evaluations, HR teams can identify employees who are at risk of leaving and take steps to improve their job satisfaction and engagement.

Prescriptive Analytics

Prescriptive analytics is the most advanced type of HR analytics. It involves using data to make recommendations for future actions. This type of analytics is often used to answer questions like “What should we do?” and “What is the best course of action?”.

Prescriptive analytics can help HR teams make more informed decisions about everything from hiring and onboarding to employee development and retention. By analyzing data from a variety of sources, HR teams can gain insights into the most effective strategies for managing their workforce and achieving their goals.

How HR Analytics Can Benefit Your Organization

HR analytics can provide a wide range of benefits for all industries at all sizes. Here are just a few ways that HR analytics can benefit your organization:

Improved Hiring and Onboarding

By using predictive and prescriptive analytics, HR teams can gain insights into the most effective strategies for hiring and onboarding new employees. This can help organizations reduce turnover and improve employee satisfaction and engagement from day one.

Better Employee Development

HR analytics can also help organizations identify areas where employees may need additional training or support. By analyzing data from performance evaluations and other sources, HR teams can gain insights into the skills and competencies that are most important for success in different roles. This information can then be used to develop targeted training programs that help employees improve their skills and advance in their careers.

Increased Employee Engagement and Retention

By using HR analytics to identify trends and patterns in employee engagement and retention, HR teams can take proactive measures to improve the workplace and address any issues that may be causing employees to leave. This can help organizations reduce turnover and improve employee satisfaction and productivity.

More Strategic Decision-Making

Perhaps the most significant benefit of HR analytics is the ability to make more informed and strategic decisions. By using data to inform their decisions, HR teams can make more effective decisions that benefit both employees and the organization as a whole.

How to Get Started with HR Analytics

If you’re interested in implementing HR analytics in your organization, here are a few steps you can take to get started:

Identify Your Goals

Before you can start collecting and analyzing data, you need to identify your goals. What do you hope to achieve with HR analytics? Are you looking to improve employee engagement, reduce turnover, or make more strategic hiring decisions? By identifying your goals, you can focus your efforts and ensure that you’re collecting and analyzing the right data.

Choose the Right HR Technology

To effectively collect and analyze data, you’ll need the right HR technology. There are many different HR analytics tools available, so it’s important to choose one that meets your organization’s specific needs and goals. Look for a tool that integrates with your existing HR systems and provides the features and functionality you need to achieve your goals.

Collect and Analyze Data

Once you have your goals and technology in place, it’s time to start collecting and analyzing data. This may involve conducting employee surveys, analyzing data from performance evaluations, and using your HR technology to track and analyze employee data.

Use HR Insights to Make Informed Decisions

Finally, use the insights you gain from your data to make informed decisions about your workforce. This may involve making changes to your hiring and onboarding processes, implementing new training programs, or taking other steps to improve employee engagement and retention.

HR analytics is a powerful tool that can help organizations make more informed and strategic decisions about their workforce. By understanding the four types of HR analytics and how they can benefit your organization, you can take steps to implement HR analytics and achieve your goals. With the right data and insights, you can improve employee engagement, retention, and overall performance, leading to a more successful and productive organization.

Justworks’ HR Analytics Solution

At Justworks, we’ve designed our HR software with the needs of small businesses in mind. We’re aware that it’s important for these businesses to be able to rapidly change alongside their industry, which is why we provide some of the most dynamic and flexible HR solutions available. 

Justworks PEO is our all-in-one payroll and benefits platform, which includes a robust offering of HR tools to help your business grow. It's all backed by 24/7 customer support via phone, email, and Slack, and our team of certified HR professionals are standing by to provide your team with tailored HR guidance and best practices. Get started today.