The Revealing Truth About People Analytics

People analytics is the data-driven approach to optimizing your people processes. It’s about gathering data, analyzing it, and turning it into actionable steps that you can take to better recruit, manage, onboard, and develop your people.

Essentially, what we’re getting away from is the gut feeling that sometimes powered organizations of the past. Instead, relying on quantitative data (as well as qualitative insight) to holistically analyze your people and what makes them perform at their best.

A metric by any other name would still be effective, which is why people analytics is also often referred to as workforce analytics or HR analytics. Taken together, they all mean the same thing: a different way of thinking about data, because it’s in regards to your people.

So, it’s helpful to think of each of these terms not just as the numbers surrounding your people. In fact, that would be a disservice to the art form, because your people are far more than data points. It’s about the data that can influence decisions about your people.

People analytics is the engine that powers your people processes. It is the foundation that helps you decide what is best for your people, with all their unique characteristics taken together, to help define, track, and determine if you are benefiting from your decisions.

That is all to say that yes, people analytics is important. In fact, it may be considered essential for organizations that are scaling rapidly, looking to develop their leaders, or simply want to place added emphasis on their people and culture.

In sum, it can help with:

• Talent attraction, recruitment, and retention

• Staff attrition analysis

• Uncovering skill gaps and addressing productivity questions

• Workforce planning initiatives

• And much more…

Essentially, every element of the employee lifecycle has a place here. It can help bring the right people in, develop them accordingly, and even establish triggers to identify red flags when things might be taking a turn.

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According to an article in the Evening Standard, LinkedIn has seen that nearly three-quarters (72%) of HR and talent professionals say that people analytics will be a major priority to their organization in the next five years.

In addition, a McKinsey article says that the majority of large organizations already have people analytics teams. It’s not simply a flash in the pan or a trend on the rise, the era of analytics is truly here!

Well, you start with a reliable platform for HR analytics, as well as one that knows the importance of secure, GDPR-compliant employee data that is up to date and accurate.

This, in coordination with more qualitative measures, like pulse surveys and others, can help build the foundation for people analytics on an organizational level.

McKinsey has a wonderful article on how to be great at people analytics. In it, they share a five-stage journey which they call the Stairway to Impact.

It shows how organizations evolve from having poor data to being able to use great analytics to make reliable predictions.

Collecting and analyzing this data is an important first step but, please, don’t stop there!

At this stage, McKinsey suggests that it’s necessary to have in-house (or external) analysts who can help make sense of existing data or, indeed, look for more data to help drive decisions.

Then, once companies move towards advanced analytics capabilities they start using data science and statistics including sophisticated mathematical models.

At this stage, people analytics becomes the basis of a data-driven approach that is highly trusted by HR leaders – and other parts of the organization.

The final stage McKinsey suggests (reliable predictions) is still a pipe dream for most organizations and requires ‘very big data’ and deep expertise in predictive analytics.

You don’t have to be able to have the statistical knowledge to make reliable predictions in order to benefit from great people analytics, though.

Sometimes it’s just great to start by gathering data that gives you a line in the sand – for example, by using employee surveys.

As an example, Google’s HR team (known as People Operations) uses their HR analytics tools to:

• Measure productivity

• ‘Check the pulse’ of their organization

• Turn feedback into meaningful change

According to this blog post, "They use the feedback (or data) to optimize the numerous areas of its people processes and align them with their working culture. As a result, they have many engaged employees with an average participation rate of 90%.”

Other articles, such as this one by People Management, suggest that analytics can help you recruit the right people internally, find the quiet champions in your ranks who excel at knowledge transfer, understand what’s really going on with diversity and inclusion, and much more.

For example, energy supplier SSE used their in-depth analytics to calculate that a fully trained apprentice returns £4.29 to the economy for every £1 invested – shared between the individual, the employer, and society. This helps them justify the value of apprenticeship training to senior leadership.

Consider what the Royal Bank of Scotland (RBS) has done to thoroughly investigate the quality of line management. When combining data from 360-degree reviews, engagement survey results, and staff interviews they were able to analyze 4,000 managers across the business.

Then, when they compared the results against exit interviews and staff turnover, they discovered that it’s very true: An employee does ‘join a business, but leave a manager.’

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Yes, people analytics can be used as a predictor for staff turnover. With it, you can establish a framework to help determine what key drivers exist for resignation. This would effectively include a series of red flags that may put someone at risk for resigning.

This could include things like absence rates, performance evaluations, engagement (number of responses to voluntary or mandatory surveys), and other metrics. Taken together, you can have a holistic view if someone is disengaged that goes beyond whether they are at work or not.

But, the most important part is then turning that data into action. People analytics can offer a signal, but your HR team then needs to put together the initiatives to make real change to help decrease the chances of people turning over.

For that, you need time. Discover how Personio can get time back for your team today.

As an HR leader, you might be tempted to ask your reports to just tell you the numbers, year on year. But the real beauty of people analytics happens when you let skilled analysts go beyond the numbers. That’s where the gold lies!

When hiring for professionals in this field, it helps to go with experts in data. They might not necessarily be HR experts – and that’s okay – but they must always be analytical, curious, and focused on answering the question, ‘So what?’.

When HR or analytics is connected up with other systems and data sources amazing insights can be revealed. This is true across every part of your organization.

Your HR or People Team is going to be the main ones responsible for managing your repository of people analytics. After all, these are the same experts who are going to turn that data into concrete initiatives to help optimize your workforce.

For that to occur, your HR team needs the time to be able to focus on what comes out of analysis. This means saving time on their core tasks, while also being able to rely on a rock-solid analytical foundation of clean, reliable employee data.

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People analytics can help you root decisions firmly in reality, and can help power your overall people strategy. If your people strategy is your roadmap, people analytics is the navigation system that helps take you where you want to go.

Great HR leaders have both the data and time to make predictions about the future of work and act on them. This combination is essential and is why having trustworthy people analytics is a core element of strategic HR. Now, you just need the time to take action.