How to Begin Your Human Capital Analytics Journey?

Human capital is the scarcest resource in the world today, yet it’s still not being measured as effectively and efficiently as financial capital. Why must organisations institutionalise their human capital analytics, and how can they begin the journey?

How to Begin Your Human Capital Analytics Journey?

26 Oct 2017 by  Arun Taneja

Human capital is the scarcest resource in the world today, yet it’s still not being measured as effectively and efficiently as financial capital. As the war for talent escalates in the Middle East and around the world, it won’t be long before business stakeholders—from board members to regulators— demand that organisations include detailed human capital insights in their corporate governance reports, in addition to the usual requirements such as breakdown on executive pay.

Why must organisations institutionalise their human capital analytics?

A report on Global Human Capital Trends by the World Economic Forum explains that out of the 7.4 billion people across the globe, just two-fifths (41% = ~3 billion) fall within the prime working age group of 25 to 54 years old. Add complexities such as the right skill, attitude, and potential to the task of finding the ideal employee for your organisation, then keeping him or her engaged and motivated enough so that the competition does not swoop, and it’s clear to see the gravity of the challenge.

This is where analytics comes in—by being able to measure the progress of each employee using metrics that are aligned with your business objectives, you can ensure your organisation’s human capital investments are delivering the expected return. Gone are the days when CHROs made people-related decisions based on gut. In today’s world where growth is plateauing and the war for talent is becoming fiercer by the day, it is quintessential to measure and implement the solutions that will work for you rather than the ones which are in vogue.

How can an organisation embark on its HR analytics journey?


While the prospect may seem daunting, the HR Analytics journey does not actually require reinventing the wheel. Instead, CHROs should keep it simple and rely on the fundamentals of business analysis—and remember that it’s not a big DEAL, which is also a useful acronym of the four-pillar framework for this journey.

  • Set up your Data. Develop an actionable HR data strategy that centres on analytics and build a system that can be the authentic and single source of data. This means the HR system should have the capability to talk to other systems such as Finance, Marketing, Operations, and more, so that it can generate consolidated real-time reports with the greatest accuracy.

  • Engage with your stakeholders. No organisation has ever succeeded when silos exist. CHROs should engage with the business to understand their challenges, then link these challenges with the people issues that can be measured through metrics. For instance, a key business challenge for a retail organisation could be poor customer satisfaction, which can be tied back to low employee engagement levels.

  • Analyse & Act. Once the buy-in to measure the people-related metrics is achieved, organisations should start analysing the metrics for trends and linkages with an aim to understand the drivers of good performance. These drivers are the levers that guide the organisations to act and intervene with data-driven and quantifiable approaches that deliver desired results—such as improved customer satisfaction!

  • Lead the way. The success or failure of any initiative depends on the leaders, and HR analytics is no exception. Once again, the role of the CHRO becomes very important in order to ingrain a culture of data-driven decision-making into the DNA of the organisation. One of the best ways to do it is to make HR analytics more user-friendly.

Authentic data that delivers actionable insights to make people-related decisions that are aligned with the business objectives is the need of the hour. Therefore, organisations that excel in people analytics will be able to out-perform their competitors—especially when it comes to being the workplace of choice for the best talent available today.

Start a conversation with us

Need help embarking on your human capital analytics journey? Get in touch with us.

Arun Taneja

Arun has more than 8 years of experience in supporting organisations in various sectors such as Logistics, Manufacturing, Information Technology, Real Estate & Construction etc. to enable them to make data driven people & business decisions. He believes that organisations which will imbibe HR analytics in their DNA will gain competitive advantage in the future, thereby, creating value for its customers.

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Arun Taneja
Arun Taneja
Dubai, UAE
Boon Chong Na
Singapore