Every HR department is sitting on a goldmine of information with their workers, from compensation numbers to recruiting data, performance measurements and more. With the right HR system, collecting and storing this data has never been easier—even for the smallest of businesses.
And yet, it's not enough. In order to optimize your workforce effectively, you need to take the next step to understand what all of this data means and how it can help you make better business decisions. It's a monumental task, and one that spreadsheets and elbow grease simply can't handle alone.
Which is why if you're sitting on a mountain of employee data, but have no idea how to interpret it properly, you should consider investing in HR analytics software. These platforms are designed to help HR practitioners make sense of their disparate workforce metrics and turn that information into action.
If you've never researched HR analytics software before, we're here to help. In this Buyer's Guide, we'll go over everything you need to know about HR analytics software to help you find the right system for your needs and budget.
Here's what we'll cover:
HR analytics software is a type of business intelligence (BI) software designed to help HR departments uncover important insights in their data and make better, data-driven decisions with their workforce.
These are powerful tools that can aggregate massive amounts of data from your disparate systems (e.g., payroll software, performance management software, an LMS, financial reporting software etc.), process it and analyze it for meaningful trends. These trends can then be visualized using easily interpretable charts and graphs and shared with stakeholders.
If you're an HR manager struggling to understand how much employee training is impacting revenue, why turnover is higher than usual or what applicant qualities best predict future top performers, HR analytics software can help.
HR analytics software products share a ton of functionality in common. Here is a list of features you should expect to find in most systems:
|Data aggregation||Pulls and processes data from various sources integrated with the software.|
|Data visualization||Visualizes workforce data in easily understandable graphs and charts.|
|Dashboards||Users can customize single-screen views of various HR metrics to see performance at a glance.|
|Reporting||Generate standardized and customizable reports to be sent out regularly to stakeholders.|
|Predictive analytics||Uses discovered trends from historical data sets to create models predicting what's likely to happen with that data in the future.|
|Workforce planning||Create strategic workforce plans for recruiting, performance management, training and more based on analytical trends.|
One of the most significant benefits of HR analytics software is that you get access to advanced business intelligence functionality without needing the knowledge and expertise of a data scientist. HR analytics software has become incredibly user-friendly in recent years to allow HR practitioners to slice and dice their data as needed. Many systems are cloud-based, so you don't even need your own server.
Here are a few other benefits this type of software offers:
When confronted with so many options, it can be tempting to simply find the HR analytics software system with the best reviews within your budget and sign a contract. Do that though, and you're likely to end up with a system that doesn't live up to expectations.
As you start researching options and talking to vendors, here are a few key things to keep in mind:
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