top of page
  • Graham Wilson

People Analytics: are you leveraging the business value & benefits?

Any decisions made by Human Resource (HR) managers can have a profound impact on a business, propagating across every level of an organisation and impacting all business processes - but how does your HR department make decisions? And more importantly, how does data and analytics play into their decision-making process?

According to a 2018 report from Workday and CIPD (Chartered Institute of Personnel Development), only half of HR professionals use data to guide decision-making. However, data-driven insights can lead to more informed decisions, which in turn translate into improved workforce processes, decreased attrition rates, and better performance and employee experience. How to get those evidence-based insights? This is where people analytics come into play.

What are people analytics?

People analytics, also known as HR analytics or workforce analytics, refers to a number of technology-enabled processes that allow for translating data into meaningful insights. These processes might rely on descriptive, visual, or statistical methods. The generated insights in turn improve hiring practices, lead to more efficient recruitment, enhance employee morale, and more. In short, what people analytics does is offer HR managers a macro view over the impact of an organisation’s employees. By identifying trends and patterns, HR analytics highlight problems and areas of improvement, enabling more informed business decision-making.

Why do you need people analytics?

You can improve any internal process by leveraging data and the insights based on it. A common use case scenario is utilising people analytics to obtain an evidence-based measure of the workforce in terms of performance, diversity, or well-being. For instance, data sets can help reduce unconscious bias in hiring decisions or identify existing diversity gaps, as well as reduce voluntary turnover related to pre-existing diversity practices. People analytics are also effective at demonstrating the impact of HR policies. For example, by measuring key metrics of employee engagement, you can determine whether your current practices are actively improving or harming employee morale and thus impacting retention. Spotting issues can assist your HR department in creating tailored incentives to retain key talent. That’s exactly what global information company Nielsen did: they used people analytics to develop a predictive model that successfully retained 40% of “flight-prone” employees.

The benefits of people analytics propagate beyond retention and the current workforce and extend to optimising recruitment processes. For example, data on conversion rates was used to improve the performance of chatbot provider Tidio, which in turn identified the best sources of talent for a new IT team. Financial company Qonto, on the other hand, revised their recruitment strategy after observing a drop in conversion rates, suggesting their current processes were inefficient: insights drawn with the help of people analytics.

People analytics can help HR departments make better, faster and smarter decisions regarding recruitment, optimising current processes or increasing retention, but they are also incredibly useful for improving performance. A key question managers ask is “what makes a team work well?” People analytics can quantify team chemistry, drawing on key metrics such as the amount of interaction between team members or the access to experts outside the team. Measuring team chemistry can help HR managers make informed decisions about improving the interplay between employees and selecting teams for efficient project completion. Case in point: with the help of people analytics, retailer Clarks found that a 1%-point increase in team engagement translated to a 0.4% increase in business performance.

DID YOU KNOW? According to Harvard Business Review, employees are not most influenced by their company’s senior leadership, but by people in less formal roles who work closely with them. Surprisingly, staff who wield the most influence are not necessarily those whom employees cite as influential. Non-executive, tangential colleagues often have stronger connections to employees. Without people analytics, there would be no way to tap their influence when necessary.

Is your company fully leveraging the advantages of people analytics?

With people analytics, HR managers can make informed decisions about recruitment and hiring, salaries, promotions, or any other processes that impact performance. However, a large portion of UK businesses fail to utilise or leverage the benefits of people analytics. A CIPD study found that 39% of business professionals lacked access to people data. The impact of this was felt across the organisation: the same survey also reported that only around a third of non-HR professionals felt that their HR teams were experts in people analytics. This falls in line with a global study by Workday and CIPD that found over 79% of UK HR professionals were less than confident using advanced techniques such as HR analytics to make decisions.

Chances are, your organisation might be under-utilising people analytics, or your HR managers might feel less than qualified at drawing data-based inferences. The good news is that implementing a people analytics strategy is easy, and the even better news is that it gives your company a significant competitive advantage.

How to implement a people analytics strategy

The first step towards implementing a sound people analytics strategy is defining your key objectives. Establish the issues your organisation wants to tackle and determine metrics that could be improved—such as retention or employee engagement. Some of the data might already be available, but in some cases, you might need to implement a data collection strategy: for instance, if you’d like to measure employee experience via questionnaires or surveys. Once the data is available, it’s time for your analytics team to step in. In most cases, there is an abundance of raw data available that needs to be gathered (usually from across numerous sources) and processed into an easy-to-read format. Analysing the data will help managers identify patterns and trends, and spot areas of improvement, as well as come up with solutions to address the issues.

If you’ve decided to become serious about people analytics and data-driven decision-making, a comprehensive analytics and reporting solution such as Microsoft Power BI can streamline the process. People analytics software will integrate the data from multiple systems and do the pre-processing for you, importing the information into an easy-to-use platform where you can visualise trends. And if you’re struggling to implement or optimise your people analytics strategy, the team at INFuse can support you through the process of translating your data into meaningful insights, just get in touch with us via the contact button below to find out more.

Bank Farm Buildings, Chester Road, Aldford, Chester CH3 6HJ

bottom of page