An organization runs on a number of different departments, one of which is the human resources (HR) department. The HR department deals with all people-related aspects of a company, such as the hiring or new employees, tackling problems which are being faced by the employees, and dealing with the payroll of employees. These days, the need for workforce optimization in enterprises is growing rapidly, as it makes the operations more efficient by ensuring that all aspects of the business are working together in peace. Workforce optimization, captures performance data in standardized framework for better decision making and tracks work progress through processing and identifying employees at risk of missing service goals among other things.

Attributed to this growing need for workforce optimization, enterprises across the globe are making use of HR analytics, since it optimizes workforce by analysing organizational data. HR analytics apply analytical process to the human capital in an enterprise for improving employee performance and enhancing employee retention. The aim of this technique is to offer better insights into every HR process, gather related data, and then utilizing it for making informed decisions regarding the improvement of these processes.  

Retail, banking, financial services, and insurance (BFSI), government, manufacturing, energy & utilities, information technology and telecom, education, and healthcare are some of the major industries which make use of HR analytics. Since financial organizations are struggling to attract young people, optimize performance, and engage employees, they are increasingly making use of HR analytics. Both large and small & medium enterprises (SME) utilize HR analytics, however, the larger for these solutions was created by large enterprises. This is because of the fact that these enterprises are making considerable investments for the deployment of HR analytics. Moreover, since these organizations are dispersed globally, they need HR analytics for appropriate hiring and retention.

This being said, the requirement for these solutions is also predicted to increase from SMEs in the coming years for enhancing productivity. Moreover, HR analytics providers are focusing on providing more flexible services and solutions to SMEs, owing to their rising movement towards data-driven decision making.  Geographically, North America emerged as the largest HR analytics market in the past, which is owing to the presence of a number of large-scale industries with a highly skilled workforce. Furthermore, the rising IT spending and technological advancements are resulting in the growing need for HR analytics solutions.  

In conclusion, the need for HR analytics is increasing due to the growing requirement for workforce optimization.