Over 60% of companies in India have started to use data analytics to improve their HR operations. According to NASSCOM, companies use HR analytics to bolster employee retention and workforce planning operations.
Across India, leaders are increasingly relying on the insights provided by proper data analysis. From understanding performance-affecting factors to gauging the effectiveness of different policies, data analysis has become an invaluable tool.
Accessibility to data analytics tools is increasing daily. This leaves leaders asking themselves a major question: Is data analytics in HR worth the hype?
While the use of HR data analytics can vary depending on the company and industry, the insights garnered from employee data can help maximize employee performance and satisfaction in multiple ways.
Using data analytics for talent management
In a 2024 survey, LinkedIn even highlighted how companies using AI-driven data analytics have increased the efficiency of their recruitment process by 25%. Using insights provided by data analytics, companies have been improving the quality of their talent acquisition process significantly.
But how exactly can data analysis help in creating efficient recruitment strategies? It all boils down to the “prediction” part of data analysis. Using modern analysis tools, leaders in a company can learn more about future hiring needs and much more.
What makes data analysis valuable is how the data can help leaders form an effective plan backed by numbers and real-time measurable results. Having actionable insights can provide management with a point to start a proper plan and be able to measure the effectiveness of their strategy.
With data analysis, a leader can see what kind of talent they might need to add to their workforce in the future. Using the advantage of time, they can ensure that the candidate they select is a suitable match for the desired profile, bridging the predicted/existing talent gap.
The insights from data analysis go beyond predicting hiring needs and can also help in the workforce-planning process. It can highlight the existing skills of employees that might be underutilized. It can also point out areas that might need more attention for optimizing the company’s performance.
Conversely, data analytics can help companies reduce their attrition rates and increase employee retention. Through data-backed prediction, leaders can learn which employees might leave soon and why.
The advantages of data-driven analytics are proven to reduce attrition significantly. Through AI-driven analytics, Wipro was able to minimize voluntary attrition by 12%. Similarly, the KPMG India HR Trends Report 2024 stated that companies using predictive analytics have managed to reduce employee turnover by 15%.
The numbers highlight the significance of data-driven decisions for effectively retaining employees. This process allows a company to retain valuable employees without increasing its skill gap.
To retain employees, leaders can identify the reasons that might prompt someone to leave and take steps accordingly. Are employees willing to stay for better upskilling programs? Are they dissatisfied with their compensation? When used strategically, data analytics can help identify and mitigate these issues.
Data analytics for employees
Any seasoned HR professional will be happy to tell you just how important employee satisfaction is to performance optimization. With data analytics, these claims have numerical backing that can’t be easily denied.
Even TCS has seen an 18% rise in employee productivity after implementing data-driven engagement tools. The connection between the use of data analytics and an increase in productivity is just another reason why leaders need to utilize the technology to its maximum efficiency.
Through data analytics, leaders can learn about factors that might not have been crucial to employee satisfaction. Alternatively, they might become aware that certain employee policies are not as effective as they imagined.
Using data analytics, it is easy to keep track of what factors are affecting employee morale to what degree. Is hazard pay really that important to those working in the tech industry? Is working from the office more productive than working from home? These are just some of the many questions that can be answered through proper analysis of data.
The necessity of data analytics
Data analytics in HR is no longer optional in India. For companies to succeed and reach their performance goals, it is important to invest in the development of their talent in a significant manner.
Companies using data-driven strategies for hiring, retention, and employee satisfaction have started to outperform their competitors, and the rise is likely to continue exponentially. Using measurable figures to make employee-centered decisions allows leaders to ensure the effectiveness of their strategies.
Investing in data analytics can be a big decision for smaller companies. In such cases, subscribing to necessary tools should remain a priority for maximizing their performance. While the technology may seem daunting, the insights it provides are undeniably essential to the growth of any organization.
