Data Driven Studies demonstrate the importance of HR metrics.

The landscape for HR professionals is changing, evolving and demanding quality data to drive transformational strategy. The last 5 years have required companies to do better with less, while meeting company objectives. One demonstrated requirement is the need for detailed relevant data. Recent improvements in data analytics and algorithms have helped drive companies to increase their profitability and sustainability.

Companies from Clarks and Best Buys through to IBM have in the last decade understood the interconnectedness between data driven programs and employees engagement (AIHR Founder Erik van Vulpen). Van Vulpen notes that companies are creating data metrics that will directly affect their effectiveness and increase output. He exampled shoe retailer Clarks who challenged the relationship between engagement and financial performance. Working with statisticians they established 450 business performance data points that resulted in a clearly demonstrated a direct correlation between engagement and higher business performance. In Clarks’ case, every 1% (percentage point) improvement in engagement, lead to an improvement of 0.4% (percentage point) in business performance. With these insights, Clarks, like many others, can create a blueprint for high-performing teams.

Similarly, Best Buy identified the interrelationship connecting engagement with profit. Through analytical data they can precisely predict that a 0.1% increase in engagement results in over US $100,000 in annual operating income per store. The significance of this financial gain resulted in adopting quarterly reviews rather than annually, which has been

Equally, a similar analysis was conducted at IBM to reduce turnover for business-critical roles, and significantly reduce costs associated with turnover and lost intellectual knowledge. Using learning capabilities, the workforce analytics team built an algorithm that included sources like recruitment data, tenure, promotion history, performance, role, salary, location, and job role. This strategic program yielded $ 300,000,000 over four years, and reduce turnover for critical roles by 25%.

Quality case studies highlight the power of HR analytics in making informed decisions, improving employee retention, and positively impacting sustainability and profitability. HR professionals must lead data initiatives in order to maximize successful outcomes and keep their role current.