HR Analytics: The future of HR and Recruiting

HR Analytics: The future of HR and Recruiting


HR analytics is a trending term, we are coming through these days but how it will shape the future of HR is the question. Will it impact the HR jobs getting reduced or will it make them more efficient in their way of working? The answer to this question is it will provide the organizations to look at the HR department as a source of providing strategic solutions to improve the organization’s efficiency.

Another benefit is that when it comes to the Finance, Marketing, and Operations department in the organizations, they have constructive evidence of their contribution towards organizational profitability such as profit and loss statement, sales report, balance sheet, etc. HRM also often fails to establish its relationship with the effectiveness of the organization. It is important to quantify the effectiveness of HRM function and enhances its reputation from ‘a function that creates cost’ to ‘a function that contributes to profitability’ and by providing strategic solutions to organizations problems, by using analytics and data-driven results, HR is all set to take its place!
“92% of talent professionals in India consider people analytics to pave the way for the future of HR and recruiting”(Source: LinkedIn Global Talent Trends 2020 report).



Let us first understand What HR analytics is-

  • HR analytics is a methodology for creating insights on how investments in human capital assets contribute to the success of an organization. It provides us with experimental and statistical approaches that could be used to show the impact of HR activities and thus it provides support to link the HR decisions and organizational performance. HR analytics capable of providing insights on :
    generating revenue,
    minimizing expenses,
    mitigating risks, and
    executing strategic plans.

  • HR analytics was first used in the 1900s and ever since we have been able to witness the transition from prescriptive analytics to predictive analytics in HR. The predictive analytics tools used in HR helps in improving decision-making from hiring to retention, covering all functional areas.

Application of HR analytics

HR analytics can be applied to all the different functions of HR including succession planning, performance management, retention. We will discuss recruitment & selection and training & development along with retention, as through the research, it has been proved that these are the areas in HR that can provide the highest ROI.

Recruitment and selection

HR analytics can support the HR managers to reduce the costs simply by designing to effective recruitment plan that helps in filling the vacant positions by evaluating candidates from the internal or external pool. When said that it helps in saving costs, it meant that the cost of hiring the wrong candidates and the resources and time of professionals that goes with wrong selection is saved using accurate ways devised by HR analytics

A few days back I came across an article where they said that hiring an unsuitable candidate for a leadership position has led the company to go back to where there were 6 months back. This is how important it is to hire the right people.

Training and development

HR analytics can assist in recognizing the employees who need training, by collecting the performance data and email tracking and manager’s review. The training programs could be designed based on data collected by analytical tools, Using AI, say have a pop up saying “this training program might help you solve this problem” will change the onus of training from the organization’s demand to employees’ need and they will willingly take courses as per project and skills requirement.


Losing the top performers in an organization can bring a huge difference in the growth and decline of an organization. The cost of replacement of an employee could be 200% the annual salary of an employee, considering the investments made in recruitment, onboarding, and training process. To resolve the issue of attrition and increase retention, HR analytics can play a major role by utilizing the data-driven tools to figure out the reason behind attrition. It is not always incentives, sometimes policies and culture of an organization might be the reason for high attrition and if we have data to support it, then we have no choice but to look into it, which we would not have otherwise. And thus improving step by step can help them retain the top performers.

Benefits of HR Analytics


  • Top performing companies utilize analytics to realize the full potential of the workforce. HR analytics consists of a mix of best practices in people, processes, information, and technology for these innovative organizations.

  • The firms that can utilize HR analytics to full potential can save the cost which would otherwise have gone wasted and are also able to decrease the time and resources dedicated to HR administrative tasks and thus maintain the quality of customer service simultaneously Higher the use of HR technology lesser HR cost and administrative burdens.

  • HR Analytics is capable of identifying the weak links or the loopholes that are adding negatively to the costs of the organization.

  • Other benefits of HR Analytics include shortening recruiting cycles, avoidance of costly mistakes to the largest P&L items, increased retention, and improved training ROI.

Moderating factors and challenges in HR Analytics

 Emsi X G2 HR Analytics-3

  • The major challenge to widespread analytics adoption in firms is because of a lack of understanding about how to utilize Analytics to improve the business.

  • Most organizations face cultural and managerial challenges in the adoption of HR analytics more than challenges related to data and technology.

  • Another challenge is that despite having a considerable amount of data to analyze, the data of relevance is quite less.

  • Also, many organizations are not willing to spend on HR analytics, they rather prefer to spend budget by increasing incentives or providing a bonus, etc without looking deeply into the root cause of problems.

The future of HR Analytics

With the technology sweeping in all the process and spike in research and publications in the area of HR analytics, 2010 onwards, it is all set to disrupt the way traditional HR has been doing so far.
We have to embrace data-driven systems to compete and retain top talent, Data analysis is our torchbearer for decision making. But we still have the challenge to market its benefit to the leadership teams.C-suite approval will aid in aligning business strategies and human resource management systems.
There is a strong bias towards rejecting information that poses a risk to existing convictions, especially if they have invested effort, time, and identity in their ideas or projects. Thus, there is a need for HR professionals to build trust among senior managers who may not believe data-driven results more than their conviction. As it was observed that there is a tendency to reject data, that threatens existing beliefs. It suggests that when personal beliefs are misguided, people choose their belief system and reject the data. To overcome such resistance, those involved in HR Analytics must engage key stakeholders(Top Management) in the process ahead of conducting the analysis. So that we can build a team of tech-savvy HR and experienced veteran business leaders together to achieve organizational success in the future.

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Tanu Priya

Tanu Priya

PGDM-HR Student at Fore School of Management, New Delhi & Ex-Wiproite

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