Evaluating HR Analytics: Advantages, Challenges, and its Impact on HRM Activities

Abstract

HR analytics, or people analytics, involves the application of statistical and data analysis techniques to human resources data to enhance decision-making and optimize HR practices. This review explores the pros and cons of HR analytics and its impact on various HR activities. On the positive side, HR analytics supports data-driven decision-making by providing empirical insights into employee turnover, performance, and training effectiveness. It also improves HR efficiency by streamlining processes and measuring the return on investment of HR initiatives, and enhances the employee experience through personalized development and predictive insights. However, challenges include concerns over data privacy and security, potential biases in data interpretation, and the high costs and complexity of implementation. HR analytics affects key HRM activities such as recruitment and selection, performance management, employee development, and retention by offering enhanced hiring practices, objective evaluations, targeted training, and predictive analytics for turnover risk. This review underscores the need for careful management of analytics practices to leverage its benefits while mitigating its drawbacks.