The benefits of data analysis have become well-documented – enormous cost savings for businesses, a higher likelihood of achieving a return on investment and projecting consumer trends, just to name a few.
What used to be primarily an IT-driven interest has extended into the realm of marketing, sales teams and C-level executives. But there is another department that should be just as mindful of data analytics: human resources.
"It has not mattered in the past because people management has not been seen as essential to success as it is today," Jon Ingham, HR technology consultant and analyst, recently told Computer Weekly. "What you have is a huge gap between what organizations are doing and what they could be doing, in one of the areas that is becoming the most important for business," he added.
Ingham described HR's current use of data analysis as "woefully inadequate." For a sector that manages more information than almost any other, it makes sense that HR departments would be gravitating toward business intelligence (BI), big data and other analysis applications. There are also a variety of ways in which these tools would benefit them, including:
1. Staying on top of new healthcare regulations.
Any company with 50 or more full-time employees will be required by law to provide healthcare benefits beginning in 2014. That means these organizations will not only have to handle more sensitive information, but manage additional audits and health-related costs.
In a recent blog post for HR Morning, PDS systems developer Marco Padovani suggested that data analysis would enable HR professionals to gain important insights during decision-making processes. This will be especially helpful, he said, for calculating different statistics relating to healthcare reform.
2. Keeping track of prospective employees.
The hiring process can be a nightmare for HR professionals – they have to conduct background checks, confirm everything on applications are accurate, speak with references and a lot more.
3. Dealing with compensation.
Wendy Hirsch, principal at Mercer's workforce strategies group, said that when dealing with compensation, HR processionals typically only "rely on very basic data."
"Rarely do they leverage more advanced analyses that allow them to think more strategically about the impact of compensation decisions," she recently told Business Finance.
By leveraging data analysis tools, Hirsch said companies will have greater insight when HR teams and CFOs go to make important compensation decisions.