Despite improvements in data gathering and evaluation capabilities, most organizations are still struggling to leverage HR analytics effectively, according to a new study by HR.com's HR Research Institute (HRRI). The research reveals that only 22% of companies report being 'very' or 'extremely' effective at maximizing their HR analytics capabilities, highlighting a significant gap between data collection and actionable insights.
The study shows progress in data evaluation skills, with 50% of HR professionals now rating their organization's capabilities for people analytics as 'good' or 'very good,' up from 36% in 2021. However, the integration of business data with HR data remains a key challenge, with only about a fifth of organizations consistently combining these data sources.
The top three challenges in people analytics identified by the study are integrating disparate data sources (47%), implementing programs based on analytics-derived decisions (41%), and effectively distributing and communicating data insights (33%). These findings underscore the complexities organizations face in translating data into strategic action.
Debbie McGrath, Chief Instigator and CEO of HR.com, emphasized the need for organizations to move beyond data collection and focus on making data-driven decisions that impact business outcomes. This shift is crucial for HR departments aiming to contribute more strategically to organizational success.
The implications of these findings are significant for businesses across industries. As companies increasingly rely on data to inform decision-making, the ability to effectively leverage HR analytics can provide a competitive advantage. Organizations that can overcome these challenges may be better positioned to optimize their workforce, improve employee engagement, and align HR strategies with business objectives.
For HR professionals, the study highlights the importance of developing skills not only in data analysis but also in data integration, insight communication, and program implementation. As the field of HR analytics continues to evolve, addressing these skill gaps will be crucial for HR departments to demonstrate their value and drive organizational performance.
The research underscores the ongoing transformation of HR from a primarily administrative function to a strategic business partner. As organizations continue to invest in HR analytics capabilities, the focus must shift from data collection to actionable insights that can inform critical business decisions and drive measurable outcomes.
