HR Analytics Maturity and Putting Your Company On the Map

Human Resources (HR) departments have been rapidly changing to adapt to new technologies. Digitalization introduced new opportunities for HR to collect and analyze large and diverse employee and candidate datasets. In this article, you’ll learn more about HR analytics, the four levels of HR analytics, and how HR analytics maturity increases business performance. 

What is HR Analytics?

HR analytics is the process of collecting, analyzing, and interpreting HR data to help companies make smarter decisions. HR analytics can help companies make data-driven decisions in areas such as turnover, retention, risk, talent, and future-casting.   

Now that more businesses realize data can help them hire and retain the right talent, companies are investing in HR analytics tools, along with trained professionals who understand how to mine and apply them.

Four Levels of HR Analytics

HR professionals and researchers have opened the doors for HR departments to help collect, analyze, and interpret company data more effectively. 

In the book, The Practical Guide to HR Analytics: Using Data to Inform, Transform and Empower HR Decisions, authors Shonna D. Waters, Valerie N. Streets, Lindsay A. McFarlane and Rachael Johnson-Murray guide readers through an eight-step process of using data analytics to solve HR problems. 

In the article, The Practical Guide to HR Analytics, Katie Wattendorf informs readers about the breakdown of four levels of HR analytics maturity that are discussed and used in the book. Below are the level descriptions word-for-word from Wattendorf’s article. 

Level 1: Operating Report

“Level 1 HR analytics is defined by using data to understand and reflect on what happened in the past—and maybe going further to draw conclusions as to why past events played out in the ways they did. The fundamentals of this level of HR analytics are understanding already available data and eventually coming to an agreement as to what the data mean for the company.”

Level 2: Advanced Reporting

“The significant difference that separates Level 2 from Level 1 is the frequency of the data reporting. The authors define this level of reporting as proactive, routine or even automated. The top functionality at this level is simply looking at relationships between variables.”

Level 3: Strategic Analytics

“HR departments operating at Level 3 are at the beginning of thorough analysis. These analyses may occur in the form of developing causal models, or looking at how relationships between variables affect outcomes.”

Level 4: Predictive Analytics

“The highest level of the HR analytics maturity model is defined by making predictions. HR departments functioning at Level 4 are gathering data and using it not only to predict what will happen in the future, but also to plan for it.” 

HR analytics maturity as a whole can be thought of as the “complexity of the data analytics the company uses to solve problems,” states Wattendorf. Therefore, the higher level the HR department can get to in the HR analytics model, the better for business.

How HR Analytics Maturity Helps Business

According to the article, only 14% of organizations function at Level 3 and Level 4: 

• 56% of organizations function at Level 1
• 30% of organizations function at Level 2

So, highly analytically mature HR departments represent the minority and therefore many organizations have work to do when it comes to HR analytics maturity.  

If you’re thinking your organization is functioning at Level 1 or Level 2, then investing in a post-graduate degree from Montclair State University will enhance your skills and capacity for strategic management and analytics.

Our fully online MS in Human Resources Analytics program is designed with the working professional in mind, and can be completed while you continue to work full-time. The knowledge and skills learned throughout the program can also be directly applied to your job before you even graduate. Earn your degree in as little as 24 months, and you’ll be on your way to making the largest impact possible at your company. 

Our online MS in HR Analytics program is ideal for:

• Career-changers
• HR professionals
• Business professionals  
• Entrepreneurs and small-business owners

If you’re ready to help put your company on the map with HR analytics maturity, then visit our program page today or reach out to our student recruitment manager below.