Prior to its adoption of HR data analytics processes, Virgin Media reported £4.4 million per year loss in revenue. Businesses that make use of data analytics capabilities in HR operations could avoid such significant losses in revenue.
The size of an organization is connected to the its associated losses. Small, medium and large businesses could make significant savings in revenue, relative to their operations. Nielsen highlights that a mere 1% drop in employee engagement can result in $5 million increase in business costs. HR data analytics exposes other (usually unnoticeable) challenges in workforce activities and operations. Improvement in Nielsen’s data analytics capabilities resulted in significant growth in its revenue.
Evidence connecting revenue loss with a lack of HR data analytics capabilities has resulted in a shift towards its adoption in many contemporary businesses. Decision-makers and HR managers are showing growing interest in learning more about the field of HR data analytics and its effects on the business. New technological tools and systems are emerging aimed at supporting HR data analytics processes. Exploring the benefits of HR data analytics provides a starting point for driving business growth and development.
HR departments across various industries opt for different approaches in making use of data analytics. Using analytical tools for people analytics is one of the popular approaches. The selection of suitable tools in the market can help in processing large data volumes to provide valuable insights. Choosing the right data analytics tool for HR operations addresses business needs and the strategic growth plan of the organization. Improvement in operations and business performance could require upgrading of the tools used in HR data analytics.
Alternative ways of taking advantage of data analytics involve training the current HR personnel. Managers and decision-makers in the HR department guide operations and influence outcomes in the business. Gaining knowledge and skills in HR data analytics could result in improvement of the quality of decisions within the HR department. Training on HR data analysis could lower the costs associated with hiring additional staff to do this job. Establishing mutually beneficial relationships with data analysis service providers offers both short and long-term benefits to businesses. HR data analytics enables businesses to gain insights into the firm’s internal workforce needs and opportunities.
There is growing evidence of business revenue losses largely associated the lack of HR data analytics systems. Contemporary businesses need to develop a competitive edge through the use of HR data analysis systems. Employees in an organization remain a valuable asset, this is why their analysis and success is always of upmost importance. Evidence from research and successful businesses express the willingness to adopt data analytics systems. Successful businesses highlight their team’s continued learning and improvement in data analytics processes and competencies as a factor contributing to business savings and a new level of efficiency in HR.
Sources: Fast Company, 2019. This is why Data is Now More Essential Than Ever in HR. Retrieved from https://www.fastcompany.com/90357244/this-is-why-data-is-now-more-essential-than-ever-in-hr Steiner, K. 2017. People Analytics Isn’t as Hard as You Think—Nielsen Proves Why. Retrieved from https://business.linkedin.com/talent-solutions/blog/employee-retention/2017/how-nielsen-used-people-analytics-to-increase-retention-and-saved-millions-of-dollars