Home > Articles

  • Print
  • + Share This
This chapter is from the book

HR’s Contribution to Business Value

In the commercial world, businesses need to stay ahead of their competitors to sell more products and services and to increase revenue and profit. The general aim of businesses is to increase market share and value for their owners. In the public or voluntary sector, organizations need to increase value through efficiency and effectiveness in delivering products and services to their constituents, whether they are service recipients, taxpayers, or donors.

Whether public, voluntary, or private, all organizations need to deliver value. This requires using financial metrics and key performance indicators to monitor and improve operations. Evidence already shows the importance of workforce analytics to profitability, one key financial metric. In a 2015 KPMG report, written by the Economist Intelligence Unit, a large majority of executives (91 percent in IT and technology, 81 percent in biotechnology, and 70 percent in financial services and healthcare) indicated that an increase in the use of data-driven insights in their HR function would affect profitability over the subsequent three-year period.

As organizations seek to improve performance, the onus is on HR to build value. The best way to do this is through an analytical approach. This is not necessarily where HR has seen itself in the past. Patrick Wright, a professor at the University of South Carolina, states: “When you hear about the work of Finance, Marketing, or Information Technology, it’s about numbers, numbers, numbers. When you hear about the work of HR, it’s about words, words, words.” We also believe, however, HR should not aim to transform itself into a purely analytical function and lose touch with the human behaviors and characteristics that also help people and businesses succeed.

For many organizations, the analytical transformation has already begun in areas familiar to HR, such as attrition and retention analytics, recruitment analytics, workforce planning, compensation optimization, and employee engagement. John Boudreau, a professor at the University of Southern California, has witnessed this: “There are some very prominent examples of analytics being used to answer important questions in HR—for example, which people will leave and how successful a candidate will be if hired. These are important questions that have been answered with analytics.”

Workforce planning is another area of HR that is ripe for analytics attention because analytically driven techniques make it more strategic and sophisticated. Salvador Malo, Head of Global Workforce Analytics, explains how this is playing out at Ericsson: “Optimizing the workforce requires a two-pronged approach: First, understand the business requirements and translate these into needs for the future; second, get to know your workforce in some depth. Together these insights about the business and the people who work in it will lead to recommendations that improve workforce planning.”

Prediction of attrition and candidate success, and workforce planning are all important topics for workforce analytics attention. Even greater value is realized when workforce analytics contributes to business outcomes. An impressive body of scholarly literature1 shows that a firm’s HR practices affect performance outcomes at all levels, from individual employees, teams and units, all the way to organizations as a whole. These HR practices can improve the breadth and depth of employee knowledge and skills in organizations—for example, through learning and development or the attraction, selection, and retention processes.

“Our job as analytics experts is to ask the tough questions to enable executives to better manage their organization and perform their fiduciary duties.”

—Alec Levenson, Economist and Senior Research Scientist,
Center for Effective Organizations, University of Southern California

A multiyear project undertaken in ISS, a global facilities services organization, offers an example of how workforce analytics contributes to business outcomes. The project brought together employee engagement and customer advocacy data to link to financial outcomes. ISS concluded that when both employee engagement and customer advocacy are high, profitability is highest. The average profitability in units scoring highest on both dimensions was 7.75 percent, versus 4.52 percent in the lowest-scoring groups.

Run Your Business with Analytics

“My perspective on analytics in HR is that every other business leader I know runs their business with analytics, but there’s a black hole when it comes to HR.” This is the view of Tracy Layney, Senior Vice President and Chief Human Resources Officer (CHRO) at Shutterfly, Inc.2

She goes on to explain two general types of analytics, which she tries to keep separate:

  • True workforce analytics. The approach of measuring behaviors in organizations and knowing how to knit them together to improve business performance. The approach is similar to that taken with customer behavior, but this one concerns employee behaviors.

  • HR analytics. The functioning of the HR team itself—for example, analyzing key performance indicators (KPIs) such as time to hire. Such analytics are about holding the HR team accountable.

Tracy says that every CHRO should be focusing on the first point. “We should be giving more levels of data showing leading and lagging indicators about our people. We have to make it an ‘insights’ exercise, not a reporting exercise—for example, using the insights to achieve business outcomes, or to expand into new markets.”

She says it is essential to both increase the skills in HR and reset the mind-set of business executives. “We talk about increasing the skills of HR, but we have to recognize that we [HR] have also trained our leaders how to think about the people part of their business, for example—to run it in a very program-driven way (such as the annual salary cycle or talent reviews). We have to push out of those expectations, to do things quite differently.”

Tracy concludes, “This is a huge area of opportunity for the HR profession. Workforce analytics and strategy together is a really powerful combination.”

A second project, this time at global pest control firm Rentokil Initial, focused on the predictability of sales success. The project isolated the key behaviors of high-performing sales professionals and used automated assessment techniques to select future candidates based on those behaviors. Global sales rose more than 40 percent and the project had a return on investment of more than 300 percent.

These examples, described in more detail in Chapter 6, “Case Studies,” demonstrate that workforce analytics can contribute not just to improving the effectiveness of HR processes, but also to improving and predicting business outcomes such as profitability and sales.

  • + Share This
  • 🔖 Save To Your Account

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information

To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.


Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.


If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information

Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.


This site is not directed to children under the age of 13.


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information

If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information

Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents

California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure

Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact

Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice

We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020