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.
Within HR, data analytics involves collecting and analysing workforce data to optimise business decisions. The insights revolve around answering the what, why, when, and how of HR operations.
Accessibility to data analytics tools is increasing daily. This leaves leaders asking themselves a major question: Is data analytics in HR worth the hype?
Data analytics for recruitment
In a 2024 survey, LinkedIn 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, company leaders can:
- Learn more about future hiring needs and much more
- Ensure that the candidate they select is a suitable match for the desired profile
- Create an effective workforce plan centered around present and future needs
Data analytics can highlight the existing skills of employees that might be underutilised. It can also point out areas needing more attention to optimise the company’s performance.
Attrition management with data analytics
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.
In multiple real-life instances, data analytics has helped companies reduce the number of departing employees:
- Through AI-driven analytics, Wipro minimised voluntary attrition by 12%.
- 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 keep valuable employees without increasing its skill gap.
With data analytics, 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.
Numbers and employee engagement
Any seasoned HR professional will be happy to tell you just how important employee satisfaction is to performance optimisation. 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 utilise the technology to its maximum efficiency.
Through data analytics, leaders can:
- Learn about factors that are and are not crucial to employee satisfaction
- Evaluate the effectiveness of implemented employee engagement policies
- Identify burnout risk preemptively and take measures to address them
Using data analytics, it is easy to keep track of the factors that affect employee morale to what degree. Is hazard pay 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
With all the advantages of data analytics in HR, the technology is no longer optional for those leaders who want their company to thrive in India. With each passing day, it is becoming more and more imperative to invest in the development of their talent in a significant manner.
It has become clear that 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.
With the actionable insights provided by data analytics, the need to remain on top of one’s company’s number is significant. With each passing day, data is being used in new and fascinating ways that provide unique insights, and a good leader can hardly afford to let such a tool go to waste.