Unit 3: Analytics in HR functions
HR Analytics notes · PTU syllabus (MBA 966-26)
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Unit summary
Every HR function can be measured and improved with analytics. This unit covers manpower planning, recruitment and staffing analytics, training and development analytics, performance management analytics, absenteeism and turnover analytics, employee engagement metrics, DEI metrics, HR cost–benefit metrics, and HR dashboards and KPIs.
After this unit you can
- Apply analytics to manpower planning, recruitment and training
- Apply analytics to performance, absenteeism and turnover
- Measure engagement and DEI
- Compute HR cost–benefit metrics and design dashboards
PTU syllabus topics
- Manpower planning
- recruitment and staffing analytics
- training and development analytics
- performance management analytics
- absenteeism and turnover analytics
- employee engagement metrics
- DEI metrics
- HR cost-benefit metrics
- HR dashboards and KPIs
Attrition rate
Separations / average headcount × 100
Absenteeism rate
Days absent / available working days × 100
Cost per hire
Total hiring cost / number of hires
Time to fill
Days from job opening to offer acceptance
Training ROI
(Benefit − cost) / cost × 100
Topic 1
Manpower planning analytics
- Demand forecasting: ratio-trend analysis, regression on business drivers (sales, branches), workload analysis.
- Supply analysis: internal (skills inventory, succession, Markov models of movement) and external labour markets.
Workforce requirement
Workload ÷ output per employee
Net requirement
Demand − (current headcount − expected separations)
Topic 2
Recruitment and staffing analytics
Time to fill
Days from requisition to offer acceptance
Cost per hire
(External + internal recruiting costs) ÷ hires
Offer acceptance rate
Offers accepted ÷ offers made × 100
Quality of hire
Performance and retention of new hires
Source effectiveness
Hires and quality by source
Example
Recruiting costs ₹30 lakh for 150 hires → cost per hire ₹20,000; referrals show the best 1-year retention, so the referral bonus is increased.
Topic 3
Training and development analytics
- Kirkpatrick's four levels: reaction, learning, behaviour, results; Phillips' ROI as a fifth level.
ROI
(Monetary benefits − training costs) ÷ training costs × 100
Training hours per employee
Total training hours ÷ employees
Topic 4
Performance management analytics
- Rating distributions and calibration, link between ratings and outcomes (sales, quality), bias checks by gender or team, goal completion rates, high-potential identification, predictors of high performance.
Topic 5
Absenteeism and turnover analytics
Absenteeism rate
Days lost ÷ (employees × working days) × 100
Bradford factor
S² × D (S = spells, D = total days)
Turnover rate
Separations ÷ average headcount × 100
Voluntary turnover
Resignations ÷ average headcount × 100
Retention rate
Employees remaining from start ÷ employees at start × 100
- Turnover analytics: cost of turnover (recruitment, training, lost productivity — often 50–200% of annual salary), predictive flight-risk models (logistic regression, survival analysis), drivers from exit interviews and engagement surveys.
Topic 6
Employee engagement metrics
- Engagement index from surveys (Gallup Q12, Aon), eNPS (employee net promoter score = % promoters − % detractors), pulse surveys, participation rates, sentiment analysis of comments.
Topic 7
DEI metrics
- Representation by gender, age and other dimensions at each level; hiring and promotion rates by group; pay equity analysis (gender pay gap); inclusion survey scores; attrition by group; disability inclusion; BRSR disclosures for listed companies.
Topic 8
HR cost–benefit metrics
HR cost per employee
Total HR expenses ÷ headcount
Revenue per employee
Revenue ÷ headcount
Human capital ROI
[Revenue − (operating expenses − employee costs)] ÷ employee costs
Compensation-to-revenue ratio
Total compensation ÷ revenue
Topic 9
HR dashboards and KPIs
- Dashboard design: few critical KPIs linked to strategy, trends and targets, drill-down by department and location, visual alerts, regular refresh.
- Typical KPIs: headcount, attrition, time to fill, cost per hire, absenteeism, training hours, engagement index, diversity ratios, revenue per employee.
Key terms
- Cost per hire
- Total recruiting costs divided by hires
- Quality of hire
- Performance and retention of new employees
- Bradford factor
- Absence score emphasising frequent short absences
- eNPS
- Employee net promoter score
- Human capital ROI
- Return on investment in employees
Quick revision
- Manpower demand and supply analytics.
- Time to fill, cost per hire, offer acceptance, quality of hire.
- Kirkpatrick and Phillips ROI.
- Absenteeism, Bradford factor, turnover, retention; flight risk.
- Engagement, eNPS; DEI metrics; HR cost–benefit; dashboards.
Important exam questions
Practice questions written to the PTU exam pattern for this unit's syllabus: short answers (Section A style) and long answers (Sections B and C style).
Short-answer questions
- Q1.How is cost per hire calculated?
- Q2.What is quality of hire?
- Q3.State the training ROI formula.
- Q4.What is the Bradford factor?
- Q5.Define eNPS.
- Q6.Name four DEI metrics.
Long-answer questions
- Q1.Explain manpower planning and recruitment analytics.
- Q2.Explain training and performance management analytics.
- Q3.Explain absenteeism and turnover analytics with formulas.
- Q4.Discuss engagement, DEI, HR cost–benefit metrics and HR dashboards.
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