Most organizations would agree that leveraging data and analytics is critical for strategic workforce planning and management.
With the right HCM software, HR leaders can gain actionable insights to optimize talent acquisition, development, and retention while controlling costs.
In this article, we'll explore the key analytics capabilities of leading HCM solutions, how they empower data-driven decision making, and best practices for implementation.
Introduction to HCM HR Software Analytics
HCM (human capital management) software provides a suite of tools to help organizations effectively manage their workforce. HR analytics refers to the metrics, reporting, and analytical capabilities that enable data-driven decision making around an organization's human resources.
Defining HCM and HR Analytics
- HCM software: Technology solutions that consolidate and manage key HR functions like payroll, benefits, recruitment, and more to provide a centralized platform for managing people data and processes.
- HR analytics: The use of data and statistics related to HR processes like turnover, absence rates, compensation, performance, etc. to guide evidence-based workforce planning and management strategies.
- Workforce analytics: A subset of HR analytics focused on analyzing employee-generated data to understand workforce productivity, engagement, retention risk, and more.
Capabilities of HCM Software Analytics
Typical analytics an HCM system can provide include:
- Absence analytics: Track absence rates and patterns to develop policies that balance employee needs with productivity.
- Turnover and retention analytics: Identify risk factors for resignation so proactive retention programs can be implemented.
- Compensation analysis: Benchmark compensation data to ensure pay equity and competitive salaries.
- Performance analytics: Connect performance management data to productivity metrics.
- Diversity analytics: Analyze diversity rates compared to industry benchmarks to inform inclusion programs.
Strategic Value of HCM Analytics in Human Resource Management
When leveraged effectively, HCM analytics empowers organizations to:
- Base people decisions on statistical evidence vs assumptions for optimized outcomes.
- Identify workforce risks early and intervene appropriately.
- Benchmark HR metrics against industry standards.
- Develop data-driven recruitment, engagement, and talent development strategies.
- Generally enable more strategic HR management aligned to business objectives.
Which HCM tool is best?
When evaluating HCM software, it's important to consider your organization's unique needs and goals. There are many excellent HCM platforms to choose from, each with their own strengths.
Paycor offers an end-to-end HCM solution tailored for small and medium businesses. Key features include:
- User-friendly interface: Simple, intuitive dashboards make Paycor easy to implement for non-technical users. Role-based permissions provide access control.
- Core HR capabilities: Payroll, benefits admin, compliance, etc. Automations streamline workflows.
- People management tools: Applicant tracking, performance, compensation, and learning management.
- Analytics: Real-time reports and dashboards track KPIs like turnover, absenteeism, recruitment metrics. Identify opportunities to refine strategy.
- Integration capabilities: APIs allow connecting Paycor to other systems used by the organization.
For a full-service HCM platform emphasizing usability, Paycor is a leading contender. However, every organization has unique priorities. Defining core requirements and comparing vendors is key to determine the ideal tech stack. Consult Paycor's HCM software comparison guide covering top market solutions.
What is difference between HCM and HRIS?
Human Capital Management (HCM) solutions and Human Resource Information Systems (HRIS) share similarities but have some key differences.
HCM software provides a comprehensive platform to manage the entire employee lifecycle, including:
- Recruiting and onboarding
- Payroll and benefits administration
- Performance management
- Learning and development
- Succession planning
In contrast, HRIS software focuses more narrowly on core HR recordkeeping and administration:
- Employee data management
- Payroll
- Benefits enrollment
- Time and attendance tracking
So while an HRIS helps automate essential HR functions, an HCM system delivers those capabilities plus additional tools for managing talent, culture, compensation, and more. HCM solutions take a strategic approach by leveraging analytics for data-driven workforce planning and decision making.
Simply put, HRIS software provides the technology foundation that HCM systems build upon to enable holistic workforce management across the entire employee journey. Many organizations start with an HRIS and later evolve to an HCM platform as needs grow more sophisticated.
Key differences:
- HRIS handles transactional HR processes
- HCM provides talent management, culture fostering, predictive analytics
In summary, HRIS supports fundamental workforce administration while HCM powers strategic human capital management.
Is workday a HRIS or HCM?
Workday is considered both a Human Capital Management (HCM) system as well as a Human Resource Information System (HRIS). As an HCM, Workday offers a complete suite of HR tools including:
- Payroll
- Benefits administration
- Recruiting
- Onboarding
- Performance management
- Learning
As an HRIS, Workday provides the technology infrastructure to collect, store, manage, and analyze the data from all of those HCM activities. This includes features like:
- Centralized employee database
- Reporting and analytics
- Configurable dashboards
- Data import/export
- Role-based security
So in summary, Workday has all the modules you would expect in a full-featured HCM platform as well as robust HRIS capabilities to harness the data from those modules. This enables companies to make data-driven talent management decisions. With both HCM and HRIS in a single integrated system, Workday eliminates the need to maintain multiple platforms. This consolidation provides a "one-stop-shop" for organizations to streamline HR processes.
What is Workday HCM software?
Workday HCM is a cloud-based human capital management software that provides an integrated suite of HR, payroll, benefits, talent management, and workforce management solutions.
Some key features of Workday HCM include:
- Unified platform: Workday HCM combines HR, payroll, time tracking, talent management, and other workforce solutions on a single cloud platform accessible from any device. This eliminates the need for integrating multiple systems.
- Analytics and reporting: Workday offers real-time analytics and pre-built reports to provide data-driven insights across the employee lifecycle - from recruitment to retirement. Dashboards and visualizations help HR make strategic decisions.
- Configurable workflows: Workday allows HR teams to easily configure approval workflows, set up automated processes for tasks like onboarding, and create customized applications all without IT support.
- Mobile access: With mobile apps for iOS and Android, managers and employees can access Workday HCM on-the-go to request time off, view pay slips, update profiles etc.
- Continuous updates: Since Workday HCM is cloud-hosted, it receives continuous feature upgrades, updates, and innovations from Workday without requiring customers to schedule downtime for upgrades.
In summary, Workday HCM provides a flexible, intuitive HRIS platform to manage the entire employee lifecycle and gain data-driven insights for strategic planning - all accessible from any device. Its unified solution eliminates the need for multiple HR systems and integration challenges.
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HCM Software Examples: Workday HCM and Oracle HCM
Workday HCM: Analytics for Workforce Planning
Workday HCM provides robust analytics capabilities to support data-driven workforce planning and talent management. Key features include:
- Customizable dashboards and reports to analyze workforce metrics like headcount, turnover, diversity stats, compensation ratios, and more
- Ability to slice and dice data by various dimensions (department, location, demographics etc) for deeper insights
- Predictive analytics to forecast future talent needs, skills gaps, and other trends
- Tools to model the impact of potential HR initiatives like compensation changes or learning programs
With its powerful analytics, Workday HCM enables organizations to optimize workforce planning, talent mobility, and operational efficiency.
Oracle HCM: Advanced Analytics & Reporting
Oracle HCM Cloud has extensive analytics and reporting functionality to inform strategic HR decisions. Notable capabilities include:
- Hundreds of standard reports for workforce analytics, time and attendance tracking, benefits analysis, and more
- Ad hoc reporting to quickly answer emerging business questions
- Interactive dashboards to visualize key metrics and KPIs
- Ability to spot trends, compare past and future workforce scenarios, and predict talent risks
By leveraging Oracle HCM's analytics, HR leaders can align talent strategies to wider business goals, oversee payroll and compliance, and have greater visibility into the employee lifecycle.
Comparing Best HCM HR Software Features
When evaluating analytics capabilities in HCM systems like Workday, Oracle, SAP and more, key criteria include:
- Configurability - the ability to customize reports and dashboards for the organization's specific planning needs
- Data Accessibility - availability of workforce metrics sliced by multiple parameters for deeper analysis
- Prediction Tools - functionality to forecast future talent risks, skills gaps, and model HR scenarios
- Ease-of-Use - intuitive, self-service interfaces allowing business users to derive insights independently
The right combination of these features enables data-backed workforce strategies, informed talent investments, and optimized HR operations. Assessing vendors based on these parameters can determine the best HRIS and payroll software fit.
Integrating HRIS, HCM HRMS, and Payroll Systems
Integrating human resource information systems (HRIS), human capital management (HCM) systems, and payroll can provide numerous benefits for organizations looking to enhance workforce analytics and streamline processes. By consolidating data into a single platform, HR leaders gain valuable insights to inform strategic decisions around hiring, retention, compensation, and more.
Unified HR Solutions: Benefits and Compliance
An integrated HCM system centralizes employee data from recruitment, onboarding, payroll, benefits administration, and other HR functions. This provides a holistic view of the workforce to help with:
- Compliance - Ensure adherence to labor laws and regulations around pay, healthcare, time tracking, etc. Automate compliance reporting.
- Benefits management - Simplify enrollment, manage plans, track utilization to optimize offerings.
- Data analysis - Identify trends to reduce turnover, boost engagement and productivity.
Consolidating systems eliminates data silos and manual processes between departments. All stakeholders access real-time, accurate workforce analytics.
The Role of Payroll Data in HCM Analytics
Payroll data feeds core HCM analytics on:
- Compensation - Ensure fair pay, analyze overtime and adjustments, predict raises.
- Retention - Link compensation to performance. Spot flight risks.
- Financial planning - Forecast labor costs more accurately with historical pay data.
- Vendor management - Assess provider costs/services to optimize contracts.
With each pay cycle, the unified platform ingests payroll data to refresh analytics. Leaders gain data-driven insights to refine compensation strategies, prevent employee churn, and enhance budget and vendor oversight.
HCM Technology: Enhancing the Employee Experience
An integrated HCM technology stack aims to:
- Streamline onboarding & transitions - Smooth processes for hiring, promotions, offboarding.
- Develop talent - Offer career development planning, mentorship matching, skills gap analysis.
- **Boost engagement ** - Receive feedback via pulse surveys and address concerns.
- Enable self-service - Let employees manage profiles, time-off, benefits, payroll info.
With a positive work experience that meets employee expectations around career growth and work-life balance, an organization can reduce turnover and cultivate talent. HCM analytics further help leaders identify problem areas.
Leveraging HCM Analytics for Financial Planning
HCM software provides robust analytics capabilities that enable organizations to optimize financial planning around their workforce. Specifically, HCM analytics empowers accurate budgeting and forecasting of payroll expenses, optimizing benefit plan design and costs, and monitoring compliance risks.
Budgeting and Forecasting Payroll Expenses
HCM analytics allows organizations to forecast payroll costs with precision based on real-time and historical compensation and headcount data. Key features include:
- Building dynamic models to predict payroll outlays from current staff levels and potential growth
- Factoring in compensation trends, pay raises, incentives, and adjusting forecasts automatically
- Comparing actual vs projected expenses to inform workforce planning decisions
- Automating payroll tax calculations for greater accuracy
With dimension-based workforce cost analytics, finance teams can identify cost drivers, model different growth scenarios, and optimize labor spend.
Optimizing Benefit Plans
Sophisticated HCM analytics empowers organizations to make data-driven decisions around benefit plans. Capabilities include:
- Assessing benefit usage and costs across locations, departments, employment types, salary bands etc.
- Modeling the ROI of potential vendors and programs based on the employee population
- Monitoring employee enrollment and satisfaction levels to modify plans
- Developing metrics-based strategies to balance employee retention and benefit spend
By leveraging such workforce insights, HR can design competitive, cost-effective benefits tailored to the organization.
Monitoring Compliance Risk
HCM analytics enables real-time tracking of workforce metrics tied to compliance requirements:
- Pay equity analysis by gender, ethnicity, age brackets across roles
- Diversity statistics by leadership level, function, location
- Turnover rates, engagement scores, promotion velocity for protected classes
Monitoring such data allows organizations to rapidly detect and resolve compliance risks related to discrimination, pay bias, or lack of advancement opportunities. This protects the business from regulatory fines, lawsuits, and reputational damages.
Choosing the Right HCM Partner: How to Evaluate HCM Solutions
Creating a Human Capital Management Evaluation Framework
When evaluating potential HCM software partners, it is important to develop a structured framework for assessment. This ensures you objectively compare solutions based on your organization's specific needs and priorities.
Key elements to include in an HCM evaluation framework:
- Business Requirements - Clearly define your objectives, pain points, and desired outcomes. Prioritize must-have vs nice-to-have capabilities.
- Functionality Analysis - Review feature sets across core HCM modules like payroll, benefits, compliance, etc. Assess how well each vendor aligns to requirements.
- Data and Analytics - Evaluate reporting, dashboarding, and workforce insights. Ensure the platform provides actionable analytics to drive decisions.
- Technology Architecture - Assess the underlying infrastructure and determine whether it meets security, scalability, and performance needs.
- Implementation Approach - Review services, timelines, training, and support models. Understand the full scope of effort required.
- Total Cost of Ownership - Model direct and indirect costs over a 5-year period to compare true expenditures.
- Vendor Viability - Research the provider's financial health, customer base growth, and product investment strategy.
Utilizing an HCM RFP Template – Request for Proposal
Developing a detailed RFP is critical for procuring HCM software. An RFP template ensures you gather consistent responses from all vendor candidates to inform your selection.
Key RFP sections should include:
- Company Background - Get details on experience, customers, growth, financials, leadership.
- Solution Overview - Understand the product architecture, delivery model, roadmap, and modules.
- Functional Requirements - Capture ability to meet every identified business requirement.
- Technology Specifications - Define needs for security, reporting, APIs, mobile access, etc.
- Service and Support - Require response times, training services, account management.
- Pricing - Demand detailed cost breakdowns for software, implementation, maintenance.
- Contract Terms - Specify acceptable payment schedules, SLAs, liability, etc.
- Implementation Plan - Ask vendors to map out approach including resources, timelines and deliverables.
Having an exhaustive RFP template ensures you gather the precise information needed to thoroughly evaluate each provider option.
Best Practices for HCM Vendor Management
Once an HCM partner is selected, ongoing vendor management is essential to drive success. Best practices include:
- Executive Governance - Maintain executive-level oversight of the relationship to align priorities.
- Performance Metrics - Establish and routinely review KPIs for solution adoption, user satisfaction, ROI.
- Change Control - Implement a structured process to evaluate and approve change requests.
- Regular Business Reviews - Conduct quarterly business reviews to discuss service performance, roadmap, and issues.
- Continuous Improvement - Identify opportunities to refine processes, optimize costs, boost user productivity.
- Contract Renewal - Start renewal discussions early to negotiate favorable terms. Re-evaluate if still the best fit.
Proactively managing your HCM vendor enables transparency, accountability, performance gains and mutually beneficial partnerships over the long term.
Best Practices for Adopting HCM Analytics
Adopting HCM analytics can provide organizations with data-driven insights to guide strategic workforce decisions. However, integrating these tools requires thoughtful change management and governance practices. Here are some best practices:
Defining Analytics Key Performance Indicators
Organizations should start by identifying 3-5 key HCM metrics aligned to overarching business goals, such as:
- Employee retention rate
- Time-to-hire
- Employee engagement scores
- Internal hire rate
- Pay equity ratios
HR leaders must partner with stakeholders across the business to define success measures and set targets.
Change Management Strategies for HR Systems
When rolling out new HCM analytics capabilities, HR should:
- Communicate the "why" behind the tools and how they benefit end-users
- Provide training resources and support channels
- Incentivize usage by linking analytics to performance evaluations
- Highlight analytics champions who have successfully adopted the tools
Gradual rollout and continual training will drive adoption.
Ensuring Data Quality and Security in HR Services
Robust data governance for HCM analytics entails:
- Establishing data steward roles and access controls
- Implementing data validation checks and auditing procedures
- Anonymizing sensitive employee information
- Securing systems via encryption and cybersecurity protocols
- Creating redundant data backups and disaster recovery plans
With thoughtful governance, organizations can uphold privacy while leveraging HCM insights.
Conclusion and Key Takeaways
HCM software with robust analytics capabilities enables organizations to optimize workforce management and talent strategies through data-driven decision making. Key benefits of HCM analytics include:
- Enhanced visibility into workforce performance and productivity. HCM analytics provide real-time visibility into employee performance across departments, allowing leaders to identify high and low performers, spot talent gaps, and inform development programs.
- Data-driven talent management. Analytics empower organizations to base hiring, development, and retention decisions on hard data versus gut feelings. This leads to improved quality of hires, better-aligned development plans, and more effective retention tactics.
- Proactive and predictive workforce planning. Analytics transform reactive approaches to workforce planning into proactive, forward-looking talent strategies based on projected growth, turnover insights, retirement trends, and more.
- Financial planning and cost optimization. Workforce analytics enable accurate headcount forecasting and cost modeling for better financial planning. Leaders can determine the optimal workforce mix to balance costs and output.
- Enhanced employee experience. By monitoring satisfaction through pulse surveys and exit analytics, organizations can continuously refine experience-related initiatives to boost engagement and retention.
In summary, HCM analytics are no longer nice-to-have. The insights unlocked by HCM software empower organizations to optimize human capital management, align talent to business goals, and plan for the future. Leaders who leverage analytics will gain a competitive edge.
