Online literature dealing with human resource information systems (HRIS) emphasizes the benefit that comes with reducing your Human Resources staff, a considerable cost savings to small and mid-sized employers. However, it is more constructive and positive to imagine an HR office staffed with a working team focused on supporting, sustaining, and expanding an organization’s competitive edge.

To succeed, any business must have a cache of human capital, a treasure chest of knowledge, skills, and abilities (KSA). While every company has some blend of strengths and weaknesses, most do not know or understand their unique mix of human capital. You might say that you cannot start using the term human capital until you comprehend the data. Briefly stated, any organization has a human capital mixture, but the specific mix may not be the one that will help the company meet its goals. HR analytics fill that gap.

Historic data
Human Resources has long depended on historic data. For example, Affirmative Action data counts and correlates recruiting, hiring, placement, and promotion records with the protected status of workers. Compensation reports, for another example, sort and correlate pay records. Human resources information systems easily issue such reports.

Rolling data
HR staff archives and mines the historic data. But, the history is never truly past so long as the employees remain part of the human capital mix. Any current employee plays a future role. So, the proper role for Human Resources is to roll that past and present out into a directed future reality.

Needed analytics
Without HR analytics, human resources management use historic data to extrapolate futures. That is an accounting mindset, not a strategic one. While there is plenty of data in HR traditional reports, there is no real analytic at work. Without HR analytics, this data does not facilitate and drive quality decision-making. A Human Resources department will, for instance, generate, collect, and process employee performance assessments. This protocol, such as it is, provides no strategic analysis of the assessment outcomes because it fails to report the labor trends therein.

Unless the Human Resources leadership brings analytics knowledge and expertise to the table, management needs to be open to the input of their HRIS provider. While HR leaders may understand the importance of HR analytics, they must match analytics with needs. It is their new duty to turn HR analytics into an HR core competency.

• Leadership: Corporate leadership wants to know what management talent lies in the succession pipeline. But, it also needs to know what put that talent there, what KSAs it came in the door with, and how it developed. Leadership needs to measure the performance history against the performance needed. Talent is not the same as seniority.
• Organizational: Analytics can provide a reading on how well employees fit their respective functions and determine the best match of KSAs and job description. Resulting analysis eases strategic recruiting, placement, and promotion.
• Engagement:  Employee engagement and motivation are not straight-line strategies with all things being equal. Engagement and motivation cost corporations billions. Too many businesses do so without asking how these efforts measure up among a mix of persons and personalities. HR analytics, on the other hand, can correlate the expenditures, metrics, and outcomes with the corporation demographics to identify which human capital best adds value.
• Teamwork: More employees work in teams at more businesses than not. HR analytics will interpret the social relationships within teams to determine what socialization forms the best teams. Outcomes will identify the recruits and assign human capital to the most conducive work community.

Human resources information software relieved Human Resources management of the time consuming, administration-intensive labor of legacy human resources work. Nothing in those legacy systems effectively analyzes capital in their data. The new generation of HRIS tools holds new access to analytics able to turn human capital into currency. HR professionals will only find the necessary continuing education in the hands of the HRIS providers – another reason to shop well.

To read more, download our free white paper, Integrating People, Process, Technology, and Strategy: The Future of Human Capital Management