5 Reasons Why You Need HR Analytics in 2023

Lord Kelvin, a 19th-century scientist had said, “If you cannot measure it, you cannot improve it.”

And while it has taken us a while to get into the groove since then, we realise now that predictive analytics and machine learning play a critical role in making informed decisions that drive positive outcomes across major industries.

Having said that, with the pandemic reinforcing the need for a digital transformation, assessing workforce performance with high-quality data and valuable insights has become the need of the hour.

If you want more compensation-related insights directly in your inbox, subscribe below!

What is HR Analytics?

HR analytics is a rapidly growing field that leverages data to optimise various aspects of human resources management.

In simple terms, HR analytics involves analysing various HR-related data sets such as employee experience, recruitment, employee turnover rate, compensation, and benefits to derive actionable insights.

For example, by analysing employee engagement data, HR professionals can identify areas of improvement to increase employee satisfaction and reduce turnover rates. 

Additionally, HR analytics can also help organisations identify qualified employees, develop effective talent management strategies, and monitor the effectiveness of training and development programs.

With the increasing availability of analytics software, HR analytics is quickly becoming a valuable tool for organisations of all sizes and industries to enhance their HR operations. 

5 Reasons We Should Use Data in Human Resources

In today’s data-driven world, HR departments can no longer rely solely on intuition and personal experience to make important decisions. Here are five reasons why HR should use data:

  1. Data-driven decision-making: Real-time data provides valuable insights that can help HR professionals make informed decisions that improve the overall performance of the organisation.
  2. Talent management: With data, HR professionals can plan better for high-potential employees, focus on key metrics, and implement strategies aligned with employee performance.
  3. Recruitment Process: Data can help HR professionals identify the most effective recruitment channels and target the right candidates to fill open positions.
  4. Employee engagement: By analysing employee engagement data, HR professionals can dig up dormant and unspoken issues to increase employee satisfaction.
  5. Compliance: With data, HR professionals can ensure compliance with regulations and laws related to employment, such as equal opportunity and anti-discrimination laws.

How Does the Process of HR Analytics Work for Businesses?

Sure, let’s dive deeper into the process of HR Analytics, and understand how each of the four points plays a vital role in it:

  • Collecting data: This is the foundation of HR Analytics. The HR team needs to gather relevant data from various sources such as employee records, performance metrics, surveys, and feedback.

    The data must be accurate, complete, and up-to-date to ensure that the insights generated from it are reliable.
  • Measurement: Once we have the data, the next step is to measure it. This involves using various tools and techniques to quantify and standardise the data.

    For instance, we can measure employee performance using standardised rating scales or measure employee engagement using survey scores.
  • Analysis: After we have collected and measured the data, it’s time to do a data-driven analysis. In this step, we use statistical methods and data visualisation tools to identify patterns, correlations, and trends in the data.
  • Predictions/Trends: Finally, using the data-driven insights gained from the previous steps, we can make predictions and identify trends that help us optimise our HR strategies.

    For instance, we can predict which employees are likely to leave the company based on their performance and engagement data and take steps to retain them.

    We can also identify trends in employee behaviour and performance, and use this information to improve our HR policies and practices for improved business productivity.

We have in essence discussed how analytics tools are beneficial for achieving greater productivity levels, but at the same time we need to be aware of some of the implications that accompany a data-driven approach.

Here are 5 Pros and Cons of Talent Analytics

Pros of HR AnalyticsCons of HR Analytics
Provides data-driven insights for HR decisionsRequires significant investment in technology and training
Helps identify areas of improvement in employee performance and engagementPotential for data privacy concerns and ethical considerations
Can help mitigate risks and reduce costs associated with HR decisionsMay not be effective if data quality is poor or incomplete
Allows HR to forecast workforce needs and plan for the futureCan create a culture of surveillance if not implemented properly
Supports diversity and inclusion initiatives by identifying areas of improvementMay not account for the subjective experiences of employees


The Right Analytics Solutions for Your Workforce 

Let’s dive in and have a look at some solutions that can be the game-changer for Human Resource professionals.


One of the key benefits of CompUp is its real-time data capabilities. Unlike traditional compensation surveys that may take months to compile and analyse, CompUp provides up-to-date data that reflects current market conditions.

This enables HR professionals to analyse compensation data in a way that is most relevant to their organisation, whether it’s by job title, industry, location, or other factors.

ADP Workforce Now

The software also provides real-time visibility into payroll data, enabling HR professionals to quickly identify and address any discrepancies or issues.

In addition, ADP Workforce Now offers a range of tools for managing employee benefits, such as health insurance, retirement plans, and flexible spending accounts.


The platform enables HR professionals to create and customise onboarding checklists, ensuring that new employees have access to all the information and resources they need to get up to speed quickly.

Another key feature of BambooHR is its analytics capabilities. The software provides real-time data on employee onboarding, such as time-to-productivity metrics and engagement levels.

This enables HR professionals to identify any issues or bottlenecks in the onboarding process and make data-driven decisions to improve the process over time.


The platform provides real-time data dashboards that enable HR professionals to track engagement levels and identify any trends or issues that need to be addressed.

Another key feature of Glint is its AI-powered analytics capabilities, which enable HR professionals to identify the key drivers of employee engagement and make data-driven decisions to improve engagement levels over time.

Leveraging the Power of Analytics in Your Compensation Planning

HR analytics can provide valuable insights and data-driven decision-making for compensation planning. By using data analysis techniques to review employee performance, job roles, and market trends, HR professionals can make informed decisions about compensation packages.

HR analytics can also be used to assess employee performance and determine appropriate compensation based on performance metrics. This can help ensure that high-performing employees are rewarded appropriately, which can improve employee engagement and retention.

For this, we also need to know the key workforce analytics we need to focus on:

  • Market analysis: Analysing the salaries and benefits offered by competitors in the same industry and location can help to determine competitive compensation packages.
  • Job analysis: Evaluating the job responsibilities, duties, and required skills for each role can help to determine appropriate compensation levels.
  • Performance metrics: Assessing employee performance based on metrics such as productivity, attendance, and quality can help to determine appropriate compensation levels.
  • Turnover rates: Analysing turnover rates and reasons for turnover can help to identify areas where compensation may need to be adjusted to improve employee retention.
  • Cost analysis: Evaluating the costs associated with compensation, including salaries, bonuses, and benefits, can help to ensure that compensation packages are cost-effective for the organisation.
  • Employee feedback: Gathering feedback from employees about their compensation packages can provide valuable insights into areas where improvements can be made.


In conclusion, HR analytics has become an essential tool for companies in 2023 to make data-driven decisions and improve overall business performance.

By using HR analytics, companies can gather valuable insights into employee performance, market trends, and compensation planning, which can help to attract and retain top talent while ensuring that compensation packages are competitive and cost-effective for the organisation.

As the business landscape continues to evolve, it is likely that HR analytics will become even more important in the years to come. Companies that invest in HR analytics now will be better positioned to succeed in the future.

Get Started

We have already established that HR analytics is changing the picture of compensation planning to make it more effective and productive.

HireSure.ai provides a cutting-edge compensation and performance evaluation planning platform called CompUp, which allows you to examine the trends in the larger rewards landscape, understand the evolving nature of compensation and benefits, and create compensation plans that can greatly benefit your employees.

If you found this article valuable, subscribe to our blog!