HR metrics and analytics in practice: 2016 survey
Author: Noelle Murphy
People analytics continues to grow in importance for HR and organisations as a whole, but practical problems persist in the accurate gathering and analysing of HR data.
This report covers key findings from the HR metrics and analytics 2016 survey and focuses on:
- the benefits and problems with gathering and analysing data;
- what data is gathered; and
- how data is gathered.
XpertHR's benchmarking service has the full data on the questions from the survey, set out in four parts:
Our survey of 378 HR practitioners explores the quality of people data that they have access to and the main benefits and problems with the process of gathering data. While engagement with HR metrics and analytics among practitioners is high, our survey shows that there are issues translating people data into useful metrics.
Benefits of using HR metrics
Better-informed decisions within organisations, and HR specifically, are two of the main benefits of gathering and analysing people data, as quoted by our respondents (see table 1). These can be important justifications for securing investment in resources to gather and analyse HR metrics.
However, less than half (43%) feel that HR analytics have resulted in cost savings and nearly one in 10 (8%) feel that their organisations are at too early a stage in their use of HR metrics to determine any benefit. So, while engagement with HR metrics and analytics remains high - respondents quoted an average of around five benefits to their organisation from using people data - tangible returns on investment in this area are still developing.
XpertHR's survey on HR priorities for 2016 reports the growth in HR analytics, after it appeared as a priority for respondent organisations for the first time in the 14-year history of our research.
Table 1: Main benefits of using HR metrics
|Benefit||% of employers|
|Better-informed business decisions within the whole organisation||72.9|
|Allows HR to be more proactive, rather than reactive||72.4|
|Better-informed business decisions within HR||71.9|
|Helps to demonstrate the value of HR||58.1|
|Allows for more effective resource planning||53.6|
|Increased predictability of business/HR decisions||38.5|
|Improves employee engagement||37.4|
|Improves employee retention||30.0|
|None - too early to say||8.0|
|n = 377.
Problems with gathering and analysing HR metrics
The key practical issue that organisations experience when trying to gather and analyse people data is the quality of the data available. Three of the top five problems quoted by respondents concern difficulties in gathering data due to lack of, or problems with, system integration, poor systems, or a lack of resources (see table 2).
However, concerningly, more than eight in 10 (81.3%) quote issues around organisations being unsure about what they want to measure or what to do with data that is gathered. This underlines the importance of setting clear objectives and outcomes from the start of the HR metrics process. It also echoes the frustrations of HR professionals with the lack of resources being made available to engage with the process - almost half (47.1%) quoted this as a problem.
For more than two in five (44.4%) HR practitioners, the frustration lies in the fact that HR analytics are not yet seen as a priority within the organisation, which makes gaining commitment for sufficient resources and support for the HR analytics process difficult.
We can see further evidence of this in our findings on the quality of data gathered, which shows that, in three key people-data areas (absence, labour turnover and recruitment), around one in seven organisations have "some" or "good" data, but no use is made of it.
Respondents report an average of around five problems with gathering and analysing people data.
Table 2: Main problems with gathering and analysing HR metrics
|Problem||% of employers|
|Lack of system integration making gathering data difficult||61.2|
|Poor integration of systems to gather and analyse data||59.1|
|Lack of resources to gather data||47.1|
|Organisation unsure what they want to measure||45.5|
|HR analytics not a priority within the organisation||44.4|
|Organisation unsure what to do with data gathered||35.8|
|Poor HR information systems (HRIS) in place to gather data||35.8|
|Lack of resources within the HR department||34.2|
|Poor engagement with line managers on HR analytics, resulting in inconsistent data||34.0|
|Lack of expertise/skills within the HR department||24.1|
|None - too early to say||4.5|
|n = 374.
Systems used to gather and analyse HR analytics
Respondents use an average of three different systems to gather and analyse data, which highlights one of the key issues HR experiences when trying to engage with people data. Namely, having all the data in one place, so as to produce clean, usable data that can be turned into usable metrics.
Table 3: Systems used to gather and analyse HR analytics
|System||% of employers|
|HR management systems/HRIS||53.2|
|Time and attendance systems||30.2|
|Online survey systems||29.4|
|Talent management systems (including performance management and applicant tracking systems)||16.9|
|n = 378.
HR data gathered and measured
Table 4 lists the types of data gathered by respondent organisations in order of use. Training and development is the area in which least employers gather data - this may be due to the self-service nature of such data, which remains with employees rather than being held centrally. However, it is of note that more than two in three (67.5%) respondents do not gather data on areas such as training budgets, which may point to the lack of training activity within organisations.
Our findings tell us that organisations are becoming more engaged with HR data and, while absence and staff turnover remain firmly at the top, respondents gather data in a median of six areas, while half gather between four and eight.
Table 4: HR data gathered and measured
|Data||% of employers|
|Pay and benefits||61.9|
|Performance appraisal results||49.7|
|Employee disputes (disciplinaries, grievances, number of tribunal cases)||42.9|
|Diversity and equality||34.4|
|Training and development (such as budgets, return on investment, development plans)||32.5|
|n = 378.
Quality of data gathered
We asked respondents to rate the quality of the data in existence within their organisation across three key areas:
- labour turnover; and
Table 5 outlines the full results for the three areas. Around one in seven respondents have "some" or "good" data in absence (15.2%), labour turnover (13.8%), or recruitment (13.4%), but make no use of it at all. Despite time and resources being used to gather data in these areas, the data leads to nothing - not even measuring absence rates or labour turnover. Given the costs involved in uncontrolled or unmonitored absence rates and spiralling labour turnover, this is a lost opportunity to save costs and a waste of the resources that go into gathering the data in the first instance.
More than four in 10 organisations feel that they do not gather enough meaningful data in either absence (43.1%) or labour turnover (43.5%), while more than half (53.6%) feel this is the case for recruitment data.
When we look beyond these key areas, in more than two in five (42.6%) organisations, there is data in existence for training and development, such as budgets, return on investment and development plans, but this data is not measured. A similar proportion (40.7% and 40.5%) told us that their organisation gathered data on diversity and equality and on employee disputes (disciplinaries, grievances and number of tribunal cases) but that it is not measured.
Table 5: Quality and use of data collected
|HR metric, % of employers|
|Some data, used a lot in HR but not more widely with other business metrics||21.2||19.9||28.7|
|Some data, used a lot within the organisation with other business metrics||11.9||14.7||17.2|
|Some data, not used||10.8||10.9||11.9|
|Good data, used a lot in HR but not more widely with other business metrics||20.6||20.2||22.2|
|Good data, used a lot within the organisation with other business metrics||26.7||29.5||15.7|
|Good data, not used||4.4||2.9||1.5|
|Enough meaningful data gathered||56.9||56.5||46.4|
|n = 378.
Use of HR data
Table 6 outlines the main ways HR uses the data that has been gathered, across the three key areas of absence, labour turnover and recruitment.
We found that the median number of uses for HR data was six, the lower quartile four, upper quartile eight, and the average stood at six. This shows a relatively healthy level of engagement with the data.
People data is still primarily used to measure key rates such as staff turnover and absence. While this has to be the starting point for any effective analysis, the lack of progress in this area from our findings in 2015 chimes with the overall frustrations among HR practitioners with people data, namely ongoing issues with the data gathering, lack of expertise to identify what can be done with the data, and the lack of priority around resourcing interpretive and analysis work.
Table 6: Use of HR data
|Use||% of employers|
|Measure staff turnover rates||93.5|
|Measure absence rates||83.2|
|Monitor recruitment costs||73.7|
|Identify absence hotspots||70.0|
|Identify staff turnover hotspots||67.9|
|Demonstrate the value of the HR department to recruitment function||52.2|
|Benchmark staff turnover against other organisations||46.8|
|Set absence triggers||43.8|
|Monitor absence costs||35.0|
|Set absence targets||30.3|
|Monitor turnover costs||27.9|
|Benchmark recruitment against other organisations||26.7|
|Set staff turnover targets||22.4|
|n = 348.
This report is based on original research carried out online in March and April 2016. Responses were received from 378 HR practitioners working in organisations employing 912,030 people. The breakdown by economic sector is as follows:
- 267 (71%) are in private-sector services;
- 70 (18%) are in manufacturing and production; and
- 41 (11%) are in the public sector.
Broken down by workforce size, the employers comprise:
- 159 (42%) with between one and 249 employees;
- 103 (27%) employing between 250 and 999; and
- 116 (31%) with 1,000 or more.
The smallest organisation employs one person and the largest 140,000 people. The median number employed is 350 and the average 2,415.
What should I do now?
- Discover more findings from our HR metrics and analytics survey, including the reasons why data is not collected in certain areas and who has responsibility for gathering it.
- Read our 2016 HR roles and responsibilities report to look up key metrics for the HR function, including the ratio of HR practitioners to employees and what data our responding HR professionals gather to support HR analytics.
- Find out the five HR metrics most frequently accessed by users of XpertHR Benchmarking over the past year.