HR Metrics, HR Analytics & People Analytics
Do you find yourself in doubt about the difference between metrics, analytics, and people analytics in relation to HR management? You are not alone. The ways in which metrics, analytics, and people analytics relate and add value to the practice of Human Resource Management can be confusing, so here is a brief overview.
HR metrics are measurements used to determine the effectiveness and efficiency of HR policies. Metrics help compare different data points. For example, if voluntary turnover was 5% last year and is now 7.5%, it has increased by 50%. The former are data points, the latter is the metric. Metrics don´t say anything about a cause, they just measure the difference between numbers. They can be interesting and important, but really, they just tell a story about what happened.
HR analytics is a historical view of your HR metrics. Your input metrics consist of lists of voluntary terminations, group by business unit for a specific time period. By looking at the trend over time, analyzed by job family or termination reason, you will then be provided with your HR analytics.
People analytics is the quantification of people drivers on business outcomes. Analytics measures why something is happening and the impact of the outcome on the business. People analytics is often interchanged with HR analytics, but it is a quantifiable combination of HR analytics with other metrics, such as finance (financial analytics in particular). If you have voluntary termination for the last 6 quarters and you have a decline in sales revenue for the last 6 quarters, you can prove there is a correlation between the two. This is people analytics.
While the greatest benefit is within people analytics, you need to have the basic HR metrics and HR analytics in place as a prerequisite in order to achieve success with people analytics. In other words, do not try to achieve too much in one go. Instead, try to take a few steps forward at a time. Put processes and technology in place that allow you to gather the HR metrics that will eventually let you develop people analytics.
About the author
Erik Ebert is the People Analytics & Business Development Director at Effective People.
Erik joined Effective People in 2005 and has supported organizations across industries for many years implementing digital transformation strategies to improve performance. He has a track record of building lasting relationships through a consultative approach resulting in happy, effective processes, successful engagements, effective teams, and a positive bottom line.
Erik holds an M.Sc. in Business Administration and Information Technology for Copenhagen Business School.