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Define 4 Types of HR Analytics: Descriptive, Diagnostic, Predictive & Prescriptive

Talent Management

Define 4 Types of HR Analytics: Descriptive, Diagnostic, Predictive & Prescriptive

August 02, 2016 Olivier Pestel

Success in today's business world depends on a productive, engaged and well-managed workforce. Human resources (HR) analytics involves the collection of raw workforce data, analysis of specific data points and the use of insights from the analysis to improve employee compliance and performance. HR analytics software makes it possible for businesses to use cumulative information about employees to increase productivity by reallocating resources and enhancing the employee experience.

Understanding the Four Types of HR Analytics

Using modern HR analytics software, companies can assess and act on data in ways never before possible. These four types of analytics help companies identify problems within their company, come up with solutions and predict how the change will affect them:

  • Descriptive
  • Diagnostic
  • Predictive
  • Prescriptive

Each type provides information necessary to address gaps in leadership, a lack of employee competency or capability and the development of programs to improve workforce performance.

Descriptive HR Analytics

>According to Dr. Michael Wu, chief scientist of Lithium Technologies, over 80 percent of statistics collected by businesses fall into the "descriptive" category. Descriptive analytics show what's happening in a company at a basic level, including inventory information, social analytics, production history, financial information and customer data.

Companies use descriptive analytics to create useful summaries of past and current data. Visualising descriptive data provides important information regarding data patterns and creates the foundation for other types of workforce insights.

Diagnostic HR Analytics

Patterns uncovered through descriptive data reveal both successes and shortcomings, and diagnostic analytics are required to understand why some approaches are working and others aren't. In the case of employee productivity, diagnostic analytics use human capital management (HCM) data to assess the performance of teams and individuals.

Team leaders and supervisors utilise data mining, data discovery and other pertinent techniques to get a better understanding of what may be inhibiting optimal workforce performance. From there, the information can be used to create a plan for improvement based on how current outcomes are working toward the company's overall goals. Diagnostic analytics also bring to light any challenges standing in the way of reaching desired milestones.

Predictive HR Analytics

The process of HR predictive analytics makes program development and HCM easier by taking data from the descriptive and diagnostic phases and translating it into reliable predictions of what is likely to happen in the future. By utilising historical data and current information, this type of analytics can show company leaders what needs to be done to improve sales, launch new marketing campaigns, offer better employee training and plan for future changes in leadership. Analysing HCM data and using it to visualise practical steps for a better corporate future frees executives and HR supervisors from unfruitful recruitment processes by identifying the most likely candidates for upcoming vacancies.

Prescriptive HR Analtyics

Right now, only about 3 percent of companies are using innovative prescriptive analytics to turn predictions into actions. It may be another decade before this advanced form of analytics becomes normal across the board, but when it does, Australia and New Zealand businesses will have the power to utilise machine learning, artificial intelligence and other advanced techniques to drive decision making.

Prescriptive analytics take HCM data and workforce insights and show business leaders the potential impacts of decisions. These models can then be used to:

  • Create beneficial training programs
  • Understand the impact of future business decisions
  • Invest in employee growth
  • Improve ROI with predictable outcomes

Better Workforce Management with HR Analytics Software

Cornerstone provides analytics tools for Australian and New Zealand businesses to handle HCM data, create reports and gather insights. Using Cornerstone software makes it possible to:

  • Consolidate incoming employee data
  • Translate information into charts and graphs
  • Use HR predictive analytics to drive future growth and success

These highly visual tools give leaders what they need to act on the insights generated from raw data. When the effect of talent on the current rate of business performance is known, managers and supervisors can take action to implement the proper training, assign employees to tasks suited to their abilities and prepare qualified candidates for future leadership.

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