How to Choose a System to Manage Your HR Analytics

HRMS is a fairly fluid label these days and any system may include some or all of the following functions: payroll, time and attendance, performance appraisal, benefits administration, recruiting/learning management (and talent, of course), performance records, scheduling, and absence management. When a system is on this scale, it results in enormous quantities of people-related data being gathered and stored. Naturally, you’ll want to access that data, crunch it, juggle with it, cross-reference it and generally use it to gain insights into what’s going on in your organization. And that’s where HRMS analytics and other HR analytics software comes in.

A quote from self-proclaimed analytics experts, McBassi & Co suggests, “HR analytics holds the promise of both elevating the status of the HR profession and serving as a source of competitive advantage for organizations that put it to good use.” Sounds good; but when it comes to the software, which is the best route to go?

A Business Case for HR Analytics

After all, you might use the analytics module within your current HRMS or implement a stand-alone option that is better tailored to your needs. But don’t forget that your ERP (if you have one) is probably running its own analytical exercises and if your organization is really committed to the business insight route then you’ll want a co-ordinated strategy, right?

Leaving aside the cost factor – because if that’s the prime driver here then you might as well just stick with your HRMS analytics module – the decision is less likely to rest on technical IT matters such as integration than on the business case for analytics usage in the first place.

If you can define clearly and precisely the problem or business issue (or issues) that you wish to analyze then the necessary capabilities of the software come into view more clearly. The problem is that what with HR analytics being a fashionable buzzword there’s a degree of jumping on the bandwagon simply because it’s the ‘latest thing’. But once you know exactly what the question is, then you can choose the right tool to help you answer it.

HR analytics holds the promise of both elevating the status of the HR profession and serving as a source of competitive advantage for organizations that put it to good use.

Furthermore, the accuracy of the ‘answers’ are improved by drawing on multiple data sources. In this sense, any integration benefits that derive from using an analytics module within your HRMS may be offset by the fact that it’s still pulling data in from ‘outside’. In fact, wherever you put your analytics capability, that package will be interfacing with external data sources.

Actually, just as important (if not more) than the software itself is giving the job of running it to the right person. Traditionally, HR people are not data scientists, and have not been required to develop deep analytical skills. Finding (or hiring) someone who can not only understand the HR environment but also know how to use HR data to enhance it will go a long way to realizing the elevation of HR’s status and creating the competitive advantage mentioned in the quote above.