Thanks to new technology, your workplace has additional tools for working smarter instead of harder. Data analytics is rapidly changing the field of human resources (HR) for the better. Through better data analysis, your company can improve its people-centered approach, reduce labor costs, and achieve a number of additional benefits.
Technology is one of the three tectonic shifts affecting the workforce, but it also happens to be one of the solutions to these shifts. By adopting better technology, you can stay ahead of the curve as you follow new employment laws, adopt updated technologies, and deal with changing demographics.
What Is Data Analytics?
At its heart, data analytics is the way data is gathered and analyzed. HR departments use data to make decisions, refine programs, and ensure compliance. Artificial intelligence (AI) and other data-gathering tools give you an inside look at how well your workplace is functioning and ways you can become more effective.
Data analytics helps you find trends and answer questions in a faster, more effective way than you can do on your own. Powerful data analytic tools can gather, collate, and analyze data with the push of a button. From reviewing employment trends to spotting patterns in your engagement levels, you can use data analysis to immediately level up your HR practices.
How Is Data Analytics Used in HR?
When it is used in HR, data analytics is often called HR analytics. Through HR analytics, companies can improve employee engagement, reduce turnover rates, simplify performance reviews, and ensure legal compliance in their hiring practices.
The following list includes some of the most common ways HR analytics is used in HR departments.
Turnover Rates: HR departments can use HR analytics to analyze turnover rates between different departments or teams. They can also analyze performance reviews, exit interviews, and employee surveys to find out why workers are leaving.
Performance Reviews: HR analytics makes performance reviews easier because it allows you to gather and synthesize objective data about the worker’s performance. Then, you can use objective data as the basis of your promotions and raises.
Equal Employment Opportunity (EEO) Compliance: With HR analytics, you can review your hiring decisions to look for potential bias. In addition to EEO compliance, HR analytics can help you ensure legal compliance with other laws and regulations as well.
Engagement Levels: Instead of requiring workers to fill out lengthy questionnaires, you can use short surveys and other data to train your AI tools to spot changes in employee engagement levels.
Absenteeism Causes: If there has been a higher rate of absenteeism at your office, you can use data analytics to diagnose the underlying cause.
Success Monitoring: Data analytics doesn’t only help you understand problems. It can also help you determine which solutions are the most effective. After implementing different program measures, you can track and analyze the success of each intervention.
The Top Trends Affecting HR
HR analytics is a major, ongoing trend in HR. Currently, 71% of businesses say people analytics is a high priority for their organization. The right analytics will help your company navigate changing demographics, new regulations, and a more competitive employment environment. Currently, the following five trends are expected to be some of the biggest factors affecting HR in the near future.
Demographics Are Changing
In a recent Mission to Grow podcast on “How AI Will Disrupt HR: Tectonic Shifts in HCM,” host Mike Vannoy discussed the impact of changing demographics on the labor force. “Our population continues to increase, but the shape of that population changes dramatically. We’re no longer in a population pyramid. We’re in a population column. With the boomers retiring, birth rates declining, the result is a demographic shift,” Vannoy said.
There are a few factors changing global and national demographics. According to Vannoy, the number of people living in poverty has dropped 400% in our lifetimes. As people make more money, they tend to have lower birth rates.
In the United States, we were ahead of the curve on population change. Already, 10,000 baby boomers are reaching retirement age each day, but new workers haven’t been born to replace each retiree. We’ve become a population column instead of a pyramid.
All of these demographic changes are going to have a profound impact on HR. These demographic changes mean the war for talent will only continue.
How HR Analytics Can Help: With HR analytics, you can win the war for talent by recruiting, hiring, and retaining workers better. A better understanding of your data means you can implement better programs for finding and retaining your workforce.
Companies Are Striving to Become More Employee-Centered
Companies are also becoming more employee-centric. This is partly due to changing demographics and the war for talent. It’s also related to changing employment legislation. In Vannoy’s Mission to Grow podcast on AI and changes in HR, he forecasted that demographics, HR laws, and technology would be the three tectonic plates shifting the HR industry.
During the last century, new employment laws have come into effect that have given workers additional safety and employment protections. Over the last few decades, employment regulations have exploded. From health insurance requirements to state-by-state minimum wage laws, companies have increased regulations about how they treat employees.
In response, many organizations have become more employee-centered. Additionally, some companies are adopting an employee-centric approach in an effort to attract workers. Thanks to better technology, this kind of approach is much easier than it used to be.
How HR Analytics Can Help: Technology can help you get a better understanding of your workforce without having to invest more labor hours. For example, you can personalize employee wellness programs by using AI to analyze employee preferences, lifestyle factors, and medical information.
Business Are Turning to Big Data for Help
Data analytics is helping companies retain workers, recruit new employees, and comply with HR laws. For example, many organizations use application tracking systems to scan applications for certain criteria or keywords. This type of approach reduces the amount of time an HR professional has to spend reviewing each resume, and it also enables an EEO-compliant approach to recruiting.
How HR Analytics Can Help: With HR analytics, you can stay ahead of this trend toward Big Data. Better information allows you to reduce your labor costs and become more efficient. If you aren’t using objective data for your business decisions, you’re likely wasting money on processes and business decisions that are less effective.
AI Is Streamlining Processes and Making Companies More Efficient
Day-to-day HR processes are getting a modern makeover through the implementation of AI. By using AI to analyze data, you can learn which employee program is the most effective. You can analyze the engagement and efficiency levels of every worker. Then, this information can be used to make promotion decisions.
AI also makes the day-to-day life of an HR professional easier and more efficient. For instance, instead of manually reading through employment laws in North Carolina, an HR professional can ask AI to summarize relevant laws from North Carolina’s legal code. This type of AI support can save a significant amount of time and provide workers with a more thorough understanding of technical topics.
How HR Analytics Can Help: Again, data analytics is your partner in making a better, more streamlined workforce. To use AI in your workplace, you need data analytics. AI, especially generative AI, is fueled by data, so you need data analytics if you want your AI tools to function their best.
New Work Styles Impact Compliance, Hiring, and Day-to-Day Work
Other than HR analytics, new technology is changing the workplace in other important ways. While hybrid and remote work were already taking off before 2020, the pandemic catalyzed these trends. In 2024, 27% of employees worked exclusively in remote roles, and 54% worked in hybrid positions. Only 20% of workers are employed in a position that is exclusively on-site.
A good example of how technology is changing the workforce is Walmart’s 2023 adoption of AI through its My Assistant program. With this generative AI tool, 50,000 employees can quickly summarize documents without having to painstakingly read each page on their own.
How HR Analytics Can Help: You need to monitor and manage remote workers, but reviewing minute-by-minute time trackers and work summaries takes up valuable HR time. HR analytics can help you monitor your remote and hybrid workers, so you can make sure everyone is working at their full productive capacity.
Plus, HR analytics can help you spot disengaged workers and employees who require extra support. Then, you can target your time and efforts on the employees who need your help the most.
Changes to Employment Laws, Demographics, and Regulations Will Continue
It’s important to remember that the three tectonic shifts of technology, regulations, and demographics are going to continue for the foreseeable future. These are long-term shifts in the labor market, so they aren’t going to disappear. Through better HR tools and data analytics, businesses can navigate these changes more easily.
Technology can also help by making it easier to hire a payroll and HR provider. At Asure, we offer support with earned wage access, ACA compliance, retirement services, background checks, employment verification, financing, and tax credits. By using a payroll and HR provider, you can have the same services and technologies as a large corporation at a fraction of the price.
Stay Ahead of the Field with Data Analytics
The workforce is changing. As an employer, it’s important to stay ahead of shifting demographics and new regulations. With the help of data analytics and technology, you can navigate these changes with ease.
To get innovative HR support for your organization, reach out to our team of small business HR and payroll experts today.