The only way to continuously prove that HRM improves quantitative business performance is through the use of adequate HR analytics software
That an optimised Human Resources team will contribute positively to businesses seems to be rather intuitive at this point. In fact, several research papers have already been written on it. Consider the details of a 2019 research paper published in the Journal of Engineering Management and Competitiveness, for example. The researchers systematically examined literature in the HRM (Human Resource Management) domain by analysing over two hundred articles, aiming to qualitatively prove a link between HRM and business performance.
“The findings (of the paper) indicate that there is indeed a positive relationship between HRM practises and overall business performance. In addition, HRM has a positive influence on employee wellbeing, productivity, and organisational climate.” While it sounds good on paper, the only way to continuously prove that HRM does indeed improve quantitative business performance is through the use of adequate HR analytics software.
HR analytics software today allows teams to track data around attendance, performance, labour, workforce costs, the prediction of future trends as well as aspects like when to hire etc. Canada-based human-capital management company People Managing People writes, “a comprehensive analytics tool can help with multiple HR processes, such as recruitment, training, talent management, turnover, and performance management.”
When it comes to evaluating HR analytics software, some aspects become rather crucial:
- Ease-of-use: HR teams need to get comfortable with basic functionalities of the software without too much training, and to understand more complex functions with only a minimal onboarding process.
- Integrations: Tools that integrate with core HR software as well as whatever software is used for benefits distribution, scheduling and project management, payroll and compensation, enterprise resource planning etc.
- Value-for-money: Tools that are flexible and offer multiple different helpful features across different HR teams offer a better return on investment.
- User Interface: It goes without saying that a crisp and clear software platform where users can navigate with ease without getting lost in menus is imperative.
Some of the primary features that HR analytics’ software must have:
- Workforce analytics: This allows for the collection of quantitative data on performance measurement, and is perhaps the most important feature for the HR teams of today.
- Recruitment analytics: HR teams need to be able to identify channels offering deserving candidates high recruitment rates
- Employee turnover forecasting: The analytics tool should help HR teams keep track of employees’ churn rates in order to prepare the organisation for future exits
- Actionable insights and reporting: Customised reports with actionable insights unique to every organisation based on collected data is crucial to the success of any analytics software
According to People Managing People: “HR analytics enables organisations to monitor employee performance and make decisions on relevant data. By monitoring different metrics, HR specialists can show management how human capital assets contribute to the overall business performance. At the same time, analytics tools help HR teams to reduce turnover, build a more productive workforce, and maintain a great company culture.”
- intelliHR: An HCM tool for medium and large enterprises, it works towards achieving strategic business objectives by building reports on employee performance, satisfaction, wellness and employee net promoter score (eNPS).
“You can also collect data about performance and productivity through self-review, peer review, and task completion statistics. Additionally, intelliHR lets you visualise headcount, recruitment, remuneration, attrition, employment conditions, and training numbers.”
- Sage HR: A great and easy-to-use tool for small and medium-sized businesses which wish to track teams’ and individuals’ contributions to a firm’s strategic goals. By measuring workforce productivity, tracking absence levels and determining individual team members’ contributions to organisational achievements, the software offers a good overview option for HR specialists and managers.
- Visier People:
An analytics tool for medium and large enterprises with a short onboarding process to collect, analyse and present data in comprehensive reports to track hiring, firing as well as turnover trends. Visier also offers eLearning courses, community forums and a knowledge library to customer service agents.