Key Analytical Skills for HR Professionals

HR organisations in several companies seem to be getting better at collecting data from multiple sources – HRIS data, financial metrics, people metrics, performance metrics etc. However, still, top-notch data analysis remains under the domain of a few specialists. I just come across a few HR professionals who can readily grasp the technical details of a multiple regression or a utility analysis for measuring the impact of engagement on attrition. As HR functions vie to get that seat at the table and position themselves as true business partners, senior executives will be looking at HR for persuasive, data-driven analytics to support key decisions and¬†initiatives. In other words, HR has to get its game right for preparing a “business case” for all its programs.

I would like to propose a some key analytical skills for the HR professionals of tomorrow:

  • Research / Hypothesis Design: HR needs to understand how it can design experiments to validate hypotheses or come up with alternative explanations to¬†organizational¬†phenomena. At the same time, knowledge about effective sample design techniques can come in handy as well. It can help HR design research studies which can be administered to statistically representative samples, instead of the entire workforce. This could help generalize findings and help save on precious time & efforts.
  • Correlations & Regressions: I cannot count how many times I have seen these two key techniques completely misinterpreted or used senselessly. Most importantly, we need to distinguish between the two. Correlation is, simply, two variables moving in the same direction. For instance, employee engagement and financial performance might be positively correlated implying that both generally, move in the same direction. However, we cannot say that one causes the other for sure. On the other hand, regressions help us to form models to explain causality i.e. variables moving in the same direction because one causes the other to happen. For instance, among an employee engagement survey of 50 questions, you can use this to analyze what factors have the largest influence on engagement levels.
  • Financial Analysis Techniques: Now, this is a potentially long list, but there are a few key things that help in working out the business case for key initiatives / decisions. Firstly, there has to be a fine appreciation of costs – fixed costs, recurring costs, and variable costs. Secondly, skills around conducting cost-benefits or break-even analysis would be extremely helpful. And speaking of that, if HR professionals can master concepts around “the time value of money”, they can really start demonstrating the rigour of their analyses.
Of course, this is not comprehensive and I look forward to your views in the comments. What analytical skills would matter the most for high-caliber future HR professionals?
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3 thoughts on “Key Analytical Skills for HR Professionals

  1. Regression also helps in establishing correlations , to establish causality – you need the ability to change and measure one parameter so that it will cause change in another parameter….

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    • Completely agree! To establish causality, we need to design experiments like having a control group and another group exposed to various interventions. However, many companies struggle with the practical side of accomplishing such research and hence, I was looking at regressions.

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