HR Analytics

Definition
HR analytics is the systematic identification and quantification of the
people drivers of business outcomes (Heuvel & Bondarouk, 2016).

• KPMG
• Human capital measurement. Big data. Talent analytics. Strategic workforce
analytics. HR analytics. These terms all refer to the synthesis of qualitative
and quantitative data and information to bring predictive insight and decision
making support to the management of people in organizations.
• To put it another way, HR analytics can be seen as the application of statistical
techniques (for example, factor analysis, regression and correlation) and the synthesis of
multiple sources to create meaningful insights – for example, employee retention in
office X is driven by factors Y and Z.
 What is People Analytics
• A data-driven approach to managing people at work.
• Analytics, applied to “people issues”
• Hiring/ Assessment
• Retention
• performance management
• compensation
• learning and development
• Team composition etc.
• A more rigorous approach to a traditionally “soft” function.
 Important HR Analytics Applications
• Capability analytics
• Competency acquisition analytics
• Capacity analytics
• Employee churn analytics
• Corporate culture analytics
• Recruitment channel analytics
• Leadership analytics
• Employee performance analytics
To ponder?
• How high is your annual employee turnover?
• How much of your employee turnover consists of regretted loss?
• Do you know which employees will be the most likely to leave your
company within a year?
 Useful HR related data
• Skills & Qualification
• Measures of particular competencies
• Trainings attended
• Level of customer engagement
• Customer satisfaction
• Performance appraisal records
• Pay, bonus & remuneration data
 Types of Analytics
• Descriptive
• Predictive
• Prescriptive
 HR Analytics Tools

• R-studio: R is great for statistical analysis and visualization which is

very suited to explore huge data sets.
• Python: can be used interchangeably for R. Python has an faster
learning curve
• SPSS:
• Excel
• Power BI: It makes the aggregation, analysis, and visualization of data
from various surces (like SQL databases with people data, a live
twitter feed and/or machine learning APIs)very simple.
 Statistical tests
• Logit
• T-test
• ANOVA
• Chi sq
• Multiple regression
Cases
• Diversity analytics
• Employee attitude surveys – engagement and workforce perceptions
• Predicting employee turnover
• Predicting employee performance
• Recruitment and selection analytics
• Monitoring the impact of interventions Business applications: Scenario
modelling and business cases
• modelling the potential impact of a training programme
• predicting the likelihood of leaving
• using predictive models to help make a selection decision in graduate recruitment
• which candidate might be a ‘flight risk’?
More advanced HR analytic techniques
• Mediation processes
• Moderation and interaction analysis
• Multi-level linear modelling
• Curvilinear relationships
• Structural equation models
• Growth models
• Latent class analysis Response surface methodology and polynomial
regression analysis
TYPE-I & Type II Error
Hypothesis testing (for a mean)
‣ hypothesis testing via CI
‣ formal hypothesis testing using p-values
‣ one and two-sided hypothesis tests
Hypotheses
Hypothesis testing for a single mean:
Significance vs. confidence level
t-distribution
Paired t -test
Chi square test
• The chi-squared test is used to determine whether there is a
significant difference between the expected frequencies and the
observed frequencies in one or more categories
 N E W S Total
GT 90 60 104 95 349
MT 30 50 51 20 151
Blue collar 30 40 45 35 150
Total 150 150 200 150 650