Business Intelligence in Human Resource
Business Intelligence refers to the ability to use information to gain a competitive edge over competitors and to collect business data to find information primarily through asking questions, reporting, and online analytical processes. It is highly capable of handling large amounts of unstructured data to help identify, develop and otherwise create new strategic business opportunities.
Business Intelligence includes data management methods for planning, collecting, storing, and structuring data into data warehouses and data marts for clustering, classification, segmentation, and prediction.
Business intelligence plays a crucial role to achieve competitive edge over competitors in the challenging economy. The data collected contains a copy of analytical data that facilitates decision support which serve for business intelligence.
Human Resource Management
Human resource management is a function in organizations designed to maximize employee performance in service of their employer’s strategic objectives. It is primarily concerned with how people are managed within organizations, focusing on policies and systems. HR departments and units in organizations are typically responsible for a number of activities including employee recruitment, training and development, and rewarding.
Importance of Business Intelligence in Human Resource
Today, analyzing the demographics of a workforce has become an increasingly important part of HR function. Companies in the traditional markets face the problem of an aging workforce and there is often an intense competition for the best new talent.
Human Resource system globally contains masses of data. HR system manages information such as employee profiles, appraisals, compensation, benefits, etc. It must analyze the key skill sets and demographics of their existing workforce, assess whether it is helping them to meet their business targets and then identify whether things are going correct or not to help the company progress.
The Business Intelligence is potentially the missing link to turn those swarms of data into valuable information that can be used to inform decisions at all levels within a company. One of the most important features of modern BI is being able to tailor access to sensitive data.
Moreover the BI solution contains hundreds of pre-defined metrics (Skills by location, function, grade, etc , Employee performance by function, demographics, location, etc , Costing of HR functions(recruit, train), Benefits Costing, etc), assembled in meaningful charts, dashboards, scoreboards and various reports. The solution should be in such a way that HR manager can access the information they need with little effort. The user should be able to slice and dice the information through the charts and dashboards to easily drill down to the underlying data. The developed BI solution contains better use of Key Performance Indicators (KPIs). The solution should help the users easily answer important questions, identify emerging trends and predict risks and results.
Benefits of using Business Intelligence in HR system
- Workforce Optimization : Using analysis throughout the company, top and bottom performers can be identified and then moved up or down. This could be used to inform future spending on training and to identify learning needs of employees.
- Optimize Compensation : BI will help in analyzing the salary trends, group wise salary comparison, salary distribution and skews by grade, performance, etc. It will also help in evaluating benefits plan for maximum value.
- Manage Recruitment : BI will help in analyzing the time and cost by recruitment method. Also they can analyze the recruitment success rates, applicant statistics, dropout reasons etc.
- Analyze Workforce Composition : It will help in understanding workforce trends by job, geography, business areas, user-defined categories etc.
- Staff Requirements Forecasting : This is based on organization goals, turnover prediction, Staff demographics, attrition etc.
Following are the key KPIs for the HR functions
HR functions KPIs
HR departments struggle to make sense of disparate and overlapping data sources such as ERP systems, spreadsheets, payroll and benefits data, employee surveys, industry benchmarks. These can be brought down by using the business intelligence, which helps the HR’s to design effective compensation benefits, analyze overtime hours and costs by the departments. It also helps to measure the employees productivity and performance and correlate the information with the employee’s skill set to identify the skills that contribute to good performance by the employees.