HR Analytics Adoption Lags Despite Improved Data Evaluation Skills

A recent study conducted by HR.com's HR Research Institute (HRRI) has shed light on the current state of people analytics in organizations, revealing a mixed picture of progress and persistent challenges. The research, titled 'HR.com's State of People Analytics 2024-25,' indicates that while companies are making strides in data gathering and evaluation, many still fall short in maximizing the potential of their HR analytics capabilities.

According to the study, only 22% of companies report being 'very' or 'extremely' effective at leveraging their HR analytics capabilities. This figure underscores the significant room for improvement in how organizations utilize data-driven insights to inform their human resources strategies and decision-making processes.

On a more positive note, the research highlights a notable improvement in data evaluation skills within organizations. Half of the HR professionals surveyed (50%) now rate their organization's data evaluation and understanding capabilities for people analytics as 'good' or 'very good.' This marks a substantial increase from 36% in 2021, indicating a growing emphasis on developing analytical competencies within HR departments.

Despite this progress, the study identifies several key challenges that continue to hinder the effective use of people analytics. The top three obstacles reported by respondents include integrating disparate sources of data (47%), implementing programs based on analytics-derived decisions (41%), and distributing and communicating data insights (33%).

One of the most significant barriers to maximizing the potential of people analytics is the lack of integration between business data and HR data. The study reveals that only about a fifth of organizations consistently integrate business data with people data, limiting their ability to gain a comprehensive understanding of workforce dynamics in relation to broader business objectives.

Debbie McGrath, Chief Instigator and CEO of HR.com, commented on the findings, stating, 'While we've seen clear progress in how organizations gather and analyze HR data, there's still a long way to go in terms of translating those insights into actionable strategies. The challenge now is moving beyond data collection and ensuring that organizations can make data-driven decisions that lead to real business impact.'

The implications of these findings for HR professionals and business leaders are significant. As organizations continue to navigate complex workforce challenges, the ability to leverage data-driven insights effectively becomes increasingly crucial. HR departments that can overcome the identified obstacles and successfully integrate people analytics into their decision-making processes will be better positioned to drive strategic value and contribute to overall business success.

For HR professionals looking to improve their analytics capabilities, the full research report offers detailed insights and actionable recommendations. The report, available for free download, covers various aspects of HR data collection, metrics, and analytics, providing guidance on making informed data-based decisions in all areas of workforce management and planning.

Additionally, HR professionals can access a recorded webcast presentation titled How to Boost People Analytics Effectiveness in Your Organization, which is available on-demand for those seeking practical strategies to enhance their analytics practices.

As the field of HR continues to evolve, the effective use of people analytics will likely become an increasingly important differentiator for organizations. By addressing the challenges identified in this study and building on the progress made in data evaluation skills, HR departments can position themselves as strategic partners capable of driving evidence-based decision-making across their organizations.