A decade ago, anyone promoting the benefits of “people analytics”, probably would have been attracted with blank stares. Was there any value hidden in HR data? Can historical data help HR form its strategic plans? Absolutely. However, organizations had narrow foresight about the potential—depending on core HR systems and collecting readily available information, such as reports of regional head counts or the organization’s average performance evaluation ratings, rather than using analytical capabilities to draw insights for managing talent and draw evidence-based people decisions.
Now, however, the situation is changing. As perThomsons’ report – The majority of big organizations have people analytics teams. However, 70 percent of company executives agree that people analytics is their top priority. The latest estimates projected expansion of people analytics with a compound annual growth rate (CAGR) of 14.30 percent from 2022 to 2030. Therefore, it is for sure that people analytics is here to stay.
Although organizations adopt different ways to build their people analytics function. But the inclination to prioritise employees’ experiences and data insights to include in HR decision-making is creating the whole difference. Let’s dwell deeper and understand people analytics better.
What is People Analytics?
People analytics deal with collecting and applying talent data to enhance talent and business outcomes. With people analytics, HR leaders develop data-driven insights to make informed decisions that lead to positive employee experiences. We can understand people analytics with the below definition.
People Analytics is a data-driven and goal-focused method of understanding all people’s processes, their functions, challenges, and opportunities they get at work to achieve sustainable organizational outcomes.
People analytics is often stated as talent analytics or HR Analytics. However, in all ways, all these three terms depict the same methodology. HR Analytics or People analytics-driven decisions are backed with statistical support and other data interpretation techniques, so the chances of gut-feeling-led decisions become dismissive. Since HR analytics depends on data-mining technologies and data interpretation strategies, the HR analytics trends develop in time to the same.
Smarter, more strategic, and data-driven talent decisions are more realistic that is applicable throughout the employees’ lifecycle – from taking better hiring decisions and more effective performance management to better retention.
Four Key People Analytics Trends
Here are the top 4 trends shaping people analytics and explaining how it interacts with the business.
- People Analytics is transforming and redefining the very purpose and functions of HR.
- HR holds an integral position in the business ecosystem; therefore, with people analytics, there is a transformation in HR interaction with other stakeholders.
- With People analytics, HR-employee relationships get redefined.
- Data-driven approaches that correlate with cause-and-effect relationships are helpful and provide quality insights.
Importance of People Analytics in Organizations
Manpower is the robust pillar of successful organizations. Still, sometimes the employees’ productivity generates minimal returns and has an adverse impact on the organization’s productivity.
HR analytics helps in identifying resources that deliver lesser productivity at specific jobs. This approach highlights the employees’ productivity gaps and focuses on remedial strategies that can generate positive employee engagement. As per studies by Deloitte, people analytics proves to increase job offer acceptance rates and optimize compensation strategies in organizations. Moreover, HR processes align their pace with business needs and compel HR heads to adopt people analytics as a continuous solution that generates real-time insights.
For instance, companies can use people analytics to detect reasons for the dip in their productivity and the factors influencing productivity. This process helps to gain employees’ trust and introduces measures to upscale productivity by training and inbound mobility.
Moreover, HR analytics provides a scientific strategic decision-making approach by dismissing favoritism and biased practices. Companies with gender diversity in the workplace can have positive outcomes across the organization and significantly decrease turnover. People analytic platform-generated insights are logical and lay a foundation for better HR strategies that keep employee engagement, experiences, and organizational success a base.
How People Analytics Platforms Can Add Value
Employees are the soul of any business. The employees strive for success, productivity, and profitability to provide a competitive edge to organizations. Their experiences have a direct impact on retention, attrition, and the reputation of the organization. However, it is often challenging to predict employees’ behavior without having access to their data. In such a scenario, people analytics or HR analytic platforms play a crucial role. These people analytic platforms insulate scientific insights to make HR decision-making more accurate and strategic. Here are some of the benefits that organizations draw from people analytical platforms:
Helpful in Analyzing Employee’s Experiences
The advanced people analytics platforms take insights from tools such as organizational network analytics, predictive attrition analytics, and preference analytics. Organizational network analytics (ONA) defines the flow of interactions and communications among the employees’ networks. The Harvard publication confirms that employees depend on their people or team networks to solve work-related problems. Same ways Predictive attrition analytics implement algorithms to understand reasons for employee turnover, retention, and low workforce. Preference Analytics draws attention to only relevant employees’ data. Behavioral data hold the base to uncover insights and trends to help workforce management. This allows HR managers to focus only on targeted challenges.
People Analytics Help in Creating a Data-backed HR Strategic Plan
To prepare strategic plans for employee retention, talent acquisition, or talent management, HR heads gather all employees’ usage and activity data, quantitative and qualitative, from all sources, including systems, surveys, focus groups, reviews, chats, and email. This data is analyzed on people analytic platforms with algorithms to draw AI-backed insights. These insights play a crucial role in designing an HR strategic plan. Data-driven strategic plans need to be more accurate in addressing employee experience-centric issues.
Contribution to Making the Hiring Process More Effective
Nowadays, organizations prefer candidates who align with the culture and goals of the organization. People Analytics platforms thoroughly analyze candidates’ data. These HR analytics platforms extract insights from historical data that hold a game-changer benefit in hiring skilled and talented employees.
Helpful in Drawing Focus on Retention Strategy
With people analytics, identifying employee turnover patterns using data mining and AI insights becomes easy. People analytics algorithms predict employees who are more likely to exit. This way, HR becomes proactive and focuses on ways of talent management to retention strategy.
Draw Focus on Skill Gap Analysis
There are several factors that influence productivity. With people analytics, HR heads can explore the reasons for reduced employee productivity. As a result, issues like skill gap comes into focus, and various HR strategies like T&D, job rotation, and internal mobility get attention.
People analytics help organizations in streamlining compensation strategies by analyzing factors like skill, domain, qualification, experience, and certifications. This is quite a useful benefit in retaining skilled employees. The base of compensation structure becomes scientific and builds employees’ trust by removing discriminatory practices.
HR Analytics tools help organizations generate information using feedback forms, surveys, interviews, performance review phrases, customer feedback, and social media to make better HR decisions. This information becomes a source to extract insights to understand employee satisfaction. HR departments strategize their talent acquisition, management, and T&D strategies to enhance employee satisfaction. Satisfied employees are highly engaged, augment organizational performance, and spread a positive word in the market.
People Analytics Practices
Here are big data analytics practices for designing and executing your people analytics strategy.
- Encourage Data-Based decision-making practice
- Focus on better Data Management
- Explore for an effective Mix of Analytical Tools
- Conduct in-depth research on data
- Generate action plans and insights by analyzing data
- Be reasonable and set realistic expectations
- Secure the security of data, and make policies to govern data
- Never forgets to ask for after feedback to analyze the efficacy of decision-making and people’s analytic insights
The Basics of Successful People Analytics
People analytics is an ecosystem of data, analytical tools, and the expertise of the people analytics team to bring a positive impact across the organization while maintaining the pace of business’s growth. Here are some of the basics that will elaborate the above statement better.
- Data management must be backed by crucial and dedicated data-engineering resources. Data should be collected from various trustable sources.
- A robust analytical capability that has the deep technical knowledge, and ability to integrate data for detailed analysis.
- Strong translation skills to interpret the findings of the analytics.
- A well-balanced operational model to align findings and insights with the organization’s goals and deliver impact by making experimentation and HR innovation a norm.
Data that Builds an Employee-Driven Organization
The latest people analytics and workforce analytic platforms help to dwell deeper into the behavioral aspects of work. This process highlights the cause-effect relationship between different human and non-human factors at work that stimulate better decision-making.
HR managers must understand the need to quantify the various data triggers to consider the latest trends. This practice draws focus on end goal outcomes as well. Updating, upgrading, and upskilling employees’ capabilities will ensure that your organization optimizes the HR processes with HR analytics and can boost an organizational employee culture toward a skilled, engaged, and retainable workforce.