Perspectives

What are the advantages of adopting HR analytics/metrics as the main way of evaluating the success of an HR strategy?

HR analytics refers to examining empirical data and statistics to formulate informed decision-making in the workplace. The data can take several forms, from visualisation to machine learning. HR professionals may utilise evidence-based data to identify and interpret trends to achieve strategic objectives and improve processes (Boxall, Purcell & Wright, 2007). The metric aspect can then measure indicators to evaluate progression or status toward HR strategic goals. It is typical for most HR departments to record organisational data relating to employee attrition, recruitment needs, or performance gauges by default (Mohdzaini, 2022). However, it runs the risk of underutilisation until this data is analysed with HR analytics and measured against strategic goals with HR metrics.

The advantages of adopting such an approach to evaluate HR strategies against objective data can lead to insights into areas of complexity, such as employee satisfaction or motivation (Mohdzaini, 2022). This can go further to include productivity, attendance, and engagement. A sustained shortfall can lead to positioning a targeted intervention or reallocating resources to ameliorate identified issues. It can also be more persuasive to management to contextualise why to opt for one approach over another instead of relying on anecdotal or intuitive evidence (Boxall, Purcell & Wright, 2007). Ultimately, analytics and metrics enable HR to provide organisations with a detailed and accurate impression of unique pressures and successes within a workforce to deliver strategic goals.

What are the disadvantages?

While adopting HR analytics and metrics as the primary means of evaluating HR strategy has its advantages, there are nuanced disadvantages.

Data quality deficiencies can easily undermine conclusions drawn from methodology and analytical tools. These issues include typographical inaccuracies, format inconsistency, and outdated information (Young, 2022). The possibility of these issues being overlooked increases when considering the process of gathering, analysing, and measuring data requires particular expertise an HR professional may not be trained for (Greasley & Thomas, 2020). The consequence of relying on flawed data to gain insight and inform decision-making introduces a risk of distortion and false assumption.

It is also important to note the limitations between ‘quantitative’ (numerically driven, objective) and ‘qualitative’ (non-numerical, subjective) data types. Overreliance on one data type may overly simplify a complex organisational issue (Greasley & Thomas, 2020). For instance, what impact have external market factors or broader societal changes had on the data?

Ultimately, HR analytics has the potential to provide valuable workforce insights when used in conjunction with other methods of evaluation (Young, 2022).