When you think of business data that can help you improve your decision-making and drive growth, you likely think of sales or marketing metrics. You may not realize that HR and payroll data can provide a wealth of insight on how to improve your business, ensure that employees are engaged, and allocate budgets wisely.
In any business, taking time to analyze HR data is vital. Here are six ways this can deliver significant insights and measurable value to your business.
1. Analyze Employee Turnover
Your company can use HR and payroll data to calculate and analyze employee turnover rates. While there are numerous reasons that employees leave, high turnover is often a sign of something deeper going on within the company.
Perhaps employees are feeling burned out or don’t have opportunities for advancement. Maybe your salaries aren’t competitive, your policies are too restrictive, or communication is poor, but most often, the biggest contributing factor to high turnover is poor leadership.
If your payroll data indicates high turnover is a problem, it can prompt you to get to the root of the issue and implement ideas to reduce it. This can save your company from the high cost of frequent hiring and lead to a more engaged and productive workforce.
2. Identify High-Performing Employees
Payroll data can also help you see which employees are going above and beyond for your company. Tracking salary increases, overtime pay, absences, and training costs can tell you much about an employee. High performers are important for your team because their work not only moves projects along, but also helps the business meet its strategic goals.
As an HR professional, you should do everything in your power to retain these employees. As 32% of employees leave for career advancement, you should ask your top employees about their career goals and provide targeted training and development opportunities. You may also need to offer incentives that make it harder for other employers to recruit them.
3. Track Absenteeism
Absenteeism hurts your company because it impedes a team’s ability to remain productive. This slowdown can have significant costs in terms of keeping up with production schedules, taking advantage of business opportunities, and even providing customers with a good experience. It also reduces employee morale, as others have to shoulder the load of absent employees.
Analyzing payroll and HR data can help you keep track of employee absences, both individually and collectively. If you notice patterns of absenteeism across the board, it should prompt further investigation into the matter.
It could be that employees are disengaged, need a more flexible schedule, or are trying to get away from a less-than-stellar manager (according to Gallup, 70% of employee engagement depends on management). Whatever the issue, it’s important that HR professionals address it quickly and effectively.
4. Analyzing Payroll Costs
HR professionals should take time to periodically review payroll costs, such as overtime hours, benefits costs, and compensation packages. Managers must find the balance between doing what is necessary to retain employees and ensuring that the company is spending money wisely.
Cutting back on payroll costs may be as simple as finding ways to limit the need for overtime. It can also involve adjusting compensation packages so they are on par with competitors in your industry. Regardless of your chosen solution, make sure your decisions are informed by critical data and not uninformed decisions that may be costly to your business.
5. Forecasting Workforce Needs
HR and payroll data can certainly help you understand and make strategic decisions about your workforce. With the right analytics data, you can gather information about your staffing levels and skill requirements, contrasted with industry standards.. Armed with this intelligence, forecasting labor dollars and budget impact become much more informed.
This type of analysis helps you plan for sustainable growth without having to constantly hire and fire because of budget constraints. You can ensure that you are maintaining the right amount of staff with the right qualifications to keep your company moving toward its mission.
6. Evaluating HR Programs
HR programs such as wellness initiatives, training courses, and employee engagement campaigns are crucial for promoting employee growth and well-being. However, if these programs are not meeting the expected outcomes, it may be an opportune time to reevaluate and redirect your valuable resources elsewhere.
Payroll and HR data can help you evaluate the effectiveness of these programs. For example, a wellness initiative that results in reduced absenteeism might be well worth keeping, while training courses that don’t help employees advance in their careers or gain higher salaries may need to be modified or discontinued.
Good Data Analysis Is Key to Your Success in HR
Remember that strategic analysis isn’t just for the sales or finance department. Regularly analyzing your HR data can help you make good decisions that move the company closer to its goals.
One key to getting this valuable data is having a robust HR platform that can deliver the reports and metrics we’ve discussed above (and more), with a support team that can help you optimize the output and insights received from the data.
If you’re wondering how to best go about this, Focus HR can help. Request a free consultation today, and let us show you how you can use HR and payroll data to transform your business.