What’s the difference between HR reporting and analytics?

Data-driven people decisions drive bottom line results, and as a result, talk of HR analytics is raising eyebrows around boardroom tables everywhere.

But those conversations often throw the terms analytics, analysis and reporting around interchangeably. Understanding the differences between reporting, analytics, and analysis is key to producing transparent HR strategies in any business.

If you look at internet search trends, the term ‘analytics’ entered the common business lexicon at the end of 2005 with the launch of Google Analytics.

This new platform was freely available to businesses of all sizes, and granted access to complex website performance measurements which marketers could use to make informed business decisions.  But that was it, just data. It’s up to the user to uncover the insights.

Google Analytics provides facts. Strictly speaking, it’s a report. Each business is unique, so definitions for HR terminology that can be applied generally can often seem vague. However, it’s important for businesses to understand the nuances between different HR terms.

So what do the terms HR reporting, analysis and HR analytics actually mean? And how do we use them correctly?

HR Reports are written accounts of different data sets and HR metrics, presented in a way that’s easy to understand. HR reports can include any metric from rates of turnover and retention to employee engagement and performance.

HR Metrics are sets of data collected by human resources teams. It’s that simple.

HR Analysis is the process of examining and gleaning insights from the data provided by the reports and discovering the relationships between data sets. HR metrics and reports aren’t very useful to a business if they’re not analysed.

HR Analytics is a term used to describe the product of the evaluative process which enables Human Resources teams to draw conclusions from different sets of HR metrics, data and analysis. HR analytics is an ‘umbrella’ term which covers all aspects of HR data analysis in a business. Arguably, the most important aspect of HR analytics is people analytics – a subsection of HR analytics which looks at information directly related to employees in your workforce.  

Much like reporting and analytics, the terms HR analytics and ‘People Analytics’ often get conflated and used interchangeably. Though the two terms overlap, there are many aspects of HR analytics that don’t fall under ‘people’ data.

HR Reporting is the final product of a data collection process. Human resources teams can collate and organise the data, insights and analytics from reports into easy to understand displays. HR teams then present this information to management teams for review, which then informs strategies and business decisions.

Put simply: HR reports provide data. HR analytics provide actionable insights. HR reporting is the presentation of these insights. 

The potential of HR analytics and reporting lies in the ability to identify and predict business trends. HR analytics enable management and Human Resources teams to make strategic and data-driven workforce decisions to improve workplace issues such as productivity, wellbeing and employee engagement.

Let’s look at an example. The HR team at Company A can see from their data that there’s been a spike in employee satisfaction over the summer.

Company A’s Report: “Employee satisfaction levels spiked in Q2.”

A report visualises or narrates data in a way that allows the receiver to understand its meaning. But there’s no decision-making, correlation or speculation.

Data-driven reporting enables HR teams to present HR metrics in an unbiased, factual manner. Having trackable metrics- like employee satisfaction in this example- enables HR teams to identify shifts and patterns in a workforce.

With the xcd people platform’s reporting features, HR teams can use up to 150 pre-made report templates to gather valuable workforce and business data.

Company A’s CEO will ask the obvious question: “Why was Q2 such a happy quarter?” The questions raised from data reports moves us into analysis. Typically, analysis indicates answers to the immediate questions posed by the facts.

Company A’s Analysis: “A possible explanation could be the early-finish initiative offered to employees during the Football World Cup.”

This is where analysis can add real weight to HR’s business consultancy. Identifying the reasoning behind data patterns is how to turn your HR reports into a valuable asset.

Analysing HR metrics has to take into account external factors, especially when delving into people analytics.  In this example, valuable insights were derived from the data by linking cultural events and company initiatives and the impact of this on employees.

Of course, trying to identify the implicit factors which may impact data findings in every circumstance is a lot more challenging in practice. We could use digital analytics tools to uncover the statistical relationships between data sets, the employee satisfaction scores and the correlative increase in satisfaction and quantify the impact of the initiative.

The xcd system provides a range of digital analytics tools to streamline HR analysis, and access to the latest analytics and innovation from Salesforce, the world’s biggest CRM software platform.

From the data analysis, you’ll want to add some weight to your conclusions by evaluating both the data and your analysis with other HR metrics, to identify the impact of your findings on wider workforce analytics. In doing so, we move into HR analytics.

Company A’s Analytics: “Employees who took advantage of the early finish on game days were more productive and took less unplanned leave during the rest of Q2. The tail of this uplift has continued into Q3.”

Evaluating data in this way is not a new idea. Indeed, analytics in finance and marketing has been guiding strategy in those areas for some years. But now businesses are beginning to unlock the value in their people data; the personal information they hold, the performance information they gather, the communication records and message content they amass just carrying out their day-to-day tasks.

HR analytics, and people analytics particularly, can drive productivity and identify workplace strategies that worked from those which weren’t as successful. In this case, analysing the data gleaned the insight that employee satisfaction was linked to an early-finish initiative.

By comparing this analysis with other HR metrics, ie: unplanned leave, an evaluation of the data sets gives HR teams the information they need to strategise future business processes and initiatives that may have a positive impact on employee satisfaction.

Analytics tools make data relevant and instructive, they provide actionable insights that offer genuine strategic, bottom line value. That’s why reliable, clean data and reporting is fast becoming HR’s most valuable asset.

So why are People Analytics so important?

According to the “State of HR Analytics 2021” report, only 29% of respondents said they are good at making positive changes based on their practices with people analytics.

This indicates how crucial it is for HR to feel confident in how they use people analytics to inform workforce strategy, as well as to have buy in from leadership in how these are used.

Your employees are your company’s greatest asset, so understanding what drives your workforce and how they work best is crucial for employers. Improving productivity and employee engagement, increasing retention rates and decreasing turnover is all possible through people analytics.

An element of HR in which people analytics are invaluable is the recruitment processes. Using the both qualitative data gained from exit interviews and employee satisfaction surveys, and quantitative data like retention and turnover rates enables HR teams to identify which areas of the hiring process are working and where it’s not quite up to scratch.

Ensuring that new hires will be a good fit for the company using data-driven insights throughout the recruitment process can reduce long-term bottom line costs. Effective hiring leads to increased employee retention, reduced cost-per-hire and saves the costly process of finding new employees.

If people analytics hasn’t come up in conversation at the top of your organisation yet, perhaps it’s time to raise it (using the correct terminology, of course).

HR hold all of the cards when it comes to optimising workforce strategies, but sitting on a bank of data without putting it to use is where many fall short. Realising the potential of HR reporting, HR analytics and people analytics can transform how any business operates and provide cost-effective solutions to drains on your bottom line profits.

Using HR metrics to inform day-to-day HR operations, reports and HR analytics provides quantifiable proof to back up business strategies and important operational decisions.

Managing and collating HR reports can be a daunting task, but using expert HR software to streamline processes can provide your team with instant reports and actionable insights.

You might be interested to read about Reporting for Change to C-Suite: A Guide for HR.