HR analytics is becoming increasingly important for organizations to manage their workforce effectively and make data-driven decisions. Several studies have explored the current state of HR analytics in organizations, their challenges, and the emerging trends in the field. In fact, 71% of companies see people analytics as a high priority in their organizations. In this chapter, initially, the authors will focus on the emergence of HR analytics and the current form of it. Then, the chapter will focus more on the challenges associated with the integration of analytics in the organisations This chapter can help Indian HR professionals and researchers stay up-to-date with the current state and latest trends in the field. Furthermore, this chapter can highlight the challenges associated in various forms and shapes and how they can handle these challenges. This can further improve their decision-making and drive business outcomes positively.
TopIntroduction
In the fiercely cut-throat competitive organizational environment, human resource management (HRM) takes place effectively to attain the organizational goals and in addition to that, Strategic HRM is the implementation model used to manage human resources alongside the tasks that are intended to help the company succeed in its goals. This area includes all crucial aspects regarding HR policies, the makeup of the human capital pool, the description of essential behaviours, and the evaluation of the efficacy of choices made in response to various business/competitive circumstances (Wright & McMahan, 2011). With the onset of the Great Recession in 2008, most businesses realized the importance of specific evidence-based methods for personnel management that incorporate analytics, decision-making, and problem-solving (Reddy & Lakshmikeerthi, 2017).
The makeup of the group of human capital assets is a collaborative phenomenon (Kritz, 2017). The concept of HR analytics enables us for data-driven decision-making in human resource management. Dr Jac Fitz-enz developed the concept of HR analytics in 1978 after emphasizing the need for measurements that could show how HR operations affected an organization's bottom line (Jain & Nagar, 2015). As a small administrative project at first, human resources analytics has grown from small administrative project to offer sophisticated diagnostic and predictive capabilities (Edwards & Edwards, 2016), which can be used to improve employee engagement and employee retention as well as produce benefits for entire organizations through digitally powered analytics solutions (Deloitte, 2017). Human resource Analytics reflects a pioneering shift in the ability of organizations and their leaders to comprehend, reshape, and strategically optimize their workforce (Fitz-Enz & Mattox, 2014).
HR analytics is an essential tool for advancement; it uses current data to predict future returns and is considered a source of essential advantage (BenGal, 2019; Bindu, 2016). In addition to focusing on assessing and enhancing aspects related to human capital, HR analytics also uses analytical methods in conjunction with employee data to influence organizational strategy and enhance performance. Its benefits in decision-making and management, among other things, have been supported by several types of research (Wandhe, 2020; Mohammed & Quddus, 2019).Due to the rapid growth of digitalization and automation across the globe, adopting HR analytics is highly suitable for Indian firms. Since India is a highly diverse country with a large and complex workforce, HR analytics can help the companies in India to identify patterns, and develop strategies to improve employee performance, engagement, and retention. Indian firms are excessively facing the skill gap challenge because India's education system produces many graduates (NASSCOM, 2019).
However, many of them need to gain the skills required by the industry. HR analytics can help identify skills gaps within the workforce and develop training programs to address them (Bockstael, Winne & Sels 2018). HR analytics can also help Indian firms in many other ways, like providing insights into their workforce, identifying areas of concern, helping managers make informed decisions, improving the bottom line and increasing profitability (Singh,2020). Despite the numerous proven benefits of HR Analytics, there are several challenges that Indian firms are facing in incorporating HR analytics into their operations access to poor quality data, absence of technological infrastructure, regulatory compliances and heavy initial investment. In this chapter we will try to address the challenges associated with HR analytics with special focus on Indian firms. The authors begin the chapter by briefly describing the emergence of the topic HR analytics followed by providing the detailed literature review on the benefit and impact of HR analytics on industries. Further we focused on the benefits we can achieve in Indian firms from implementing it and tried to investigate the usage and challenges of HR analytics in the Indian firm so far. Finally the authors proposed the solutions to fit in and make the most of analytics in firms of Indian origin.