HR Analytics help to quantify the impact of HR activities on business performance

The traditional view of HR is that HR is a cost center and its mainly focusing on the administrative tasks. HR professionals are being seen as not important as they are working in the “back office”. That view has been shifting these days slowly. There is one more trendy topic - HR Analytics - also enables HR professionals to demonstrate the linkage between HR activities and impacts to the business performance. Thanks to HR analytics, we are able to bring HR professionals closer to the strategic and key decision-making process in the company.

For example, we all know that attrition costs companies lots of money. But how much? One example we could use is that Nielson found that every 1% decrease in employee attrition, they could avoid $5 million in business costs, as stated in the article “ This is why data is now more essential than ever in HR.” by Lars Schmidt and David Green.*'

In the same article , it says that Virgin media found out that 7,500 customers cancelled their subscription within 4 weeks of being part of the recruitment process during one year, which caused them £ 4.4 million of loss due to poor candidate experience.

For all the HR professionals, it is time to start thinking about collecting data to showcase the importance of your work. HR analytics is able to quantify it in financial terms, which is what the CEO wants to see and it is also the most powerful tool in convincing your stakeholders for your HR initiatives.

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