People Analytics: Meaning, Benefits, Process and Role

What is People Analytics?

People Analytics is defined as a technique that involves gathering, assessing, and applying HR data to improve people-related outcomes in a business setting. It is not just about abstract strategies for enhancing performance, rather, it is used to identify common patterns in employee behaviour, such as predicting attrition or recognising burnout, pinpointing areas for improvement for both employees and managers and recruiting the right candidates. The process of people analytics utilizes technology and a mix of visual, descriptive, and statistical methods to collect and analyze people’s data. This methodology assists in making informed decisions and strategies that can have a positive influence on the organisation and its workforce.

Benefits of People Analytics

People Analytics is a technique that involves the gathering, assessment, and utilisation of HR data to improve people-related outcomes in a business setting. Here are some key benefits of effectively implementing a people analytics strategy,

1. Improved Training and Development Programs: People analytics plays a pivotal role in evaluating the outcomes of the onboarding process, ongoing learning and development initiatives, and upskilling programs in organisations. With suitable training analytics and people data, Learning and Development (L&D) teams can easily identify skill gaps and pinpoint areas of improvement in employee training programs.

2. Enhanced Workplace Culture: People analytics extends beyond mere performance assessment. It includes people-centric data such as employee satisfaction scores, absence rates, net promoter scores, and other people metrics that reveal employees’ attitudes towards your organisation and their work. Equipped with this data, HR representatives can foster more engaging work environments.

3. Reduced Turnover: There are some apparent indicators of turnover, but organisations will only recognise them once they begin collecting information from employees during the offboarding period. Implementing this offboarding people analytics data collection strategy has led organisations to witness a decrease in attrition by up to 50%.

4. Boosted Productivity Levels: People analytics empowers organisations to identify barriers that impede employee productivity. These could be a disorganised knowledge base, ineffective communication, or a lack of workplace flexibility. Once the appropriate data is available, it is simpler to address these issues.

5. Improved Customer Experience: Low employee engagement and morale can result in a poor customer experience. People analytics offers HR data that highlights how to make your employees happier and more engaged at work. Ultimately, content employees are more likely to deliver excellent customer service.

Process of People Analytics

Despite the recognised benefits of people analytics, only 3% of executives agree that they have sufficient data to make informed decisions about their workforce. The vast majority, constituting 97%, struggle with implementing a people analytics process, mainly due to the lack of a solid strategy. To begin developing a people analytics strategy for organisation, one must follow these steps,

1. Set Clear People Analytics Goals: To prevent people analytics from becoming mere organisational jargon, articulate specific goals when adopting the process. This approach ensures actionable insights and allows for the measurement of the effectiveness of your initiatives. Clearly define your objectives, whether it is reducing employee turnover or addressing department-specific issues, such as turnover in the marketing department.

2. Educate Your HR Team: While larger companies may have dedicated people analytics teams, smaller organisations can initiate their efforts by training HR representatives. Shifting focus from rapid talent acquisition to a more analytical approach necessitates upskilling your HR team, particularly if they lack experience in analytics.

3. Communicate the Purpose: Transparent communication is essential in gaining employee cooperation. Clearly explain that people analytics is not just another performance review but an effort to improve the overall workplace experience. Employees are more likely to assist when they understand the purpose behind the data collection.

4. Identify Relevant People Metrics: Avoid aimless data collection. Determine the specific variables to track based on your objectives. For example, if addressing employee turnover, relevant metrics could include the number of terminated employees, turnover rate, job performance scores, previous promotions, duration of employment, compensation levels, and employee satisfaction scores.

5. Analyse the Data: Convert collected data into a user-friendly format and identify patterns. Analysing various variables and integrating data is crucial. Formulate hypotheses based on correlations between different factors, ensuring a comprehensive understanding before concluding.

6. Act on the Data: Use the obtained data to develop and implement a strategy. Collaborate with HR and management to discuss findings and suggest solutions. Different interpretations may arise, necessitating a thorough examination of each hypothesis. While the process may not be quick, a data-driven decision will eventually surface.

7. Continually Repeat the Process: People analytics is a continuous effort. If possible, involve data analytics experts and developers to automate data collection and introduce AI-powered tools. This collaborative approach aids in the development of a predictive people analytics model and lays the groundwork for ongoing employee listening strategies.

Three Key Level-Based Checks to Choose the Right People Analytics Tools

Navigating through the myriad of vendors, options, and subscription plans available for people analytics tools can be a daunting task. To simplify the decision-making process, consider a three-tier need-based check.

Level 1: Basic HR Dashboard: Begin your people analytics journey with a straightforward dashboard that enables the capture, aggregation, and visualisation of data. Tools like Power BI, Tableau, and Qlik provide user-friendly interfaces and easy access to data. For a Level 1 requirement, prioritise simplicity in your people analytics system.

Level 2: Enhanced HR Dashboard: If you already have a consistent flow of relevant data and need deeper insights for improved analysis and decision-making, consider statistical tools such as Excel or SPSS. While these tools may lack flashy visual aids and social-media-style interfaces, they offer effective functionality. Alternatively, platforms like Visier, though they require some setup time, provide comprehensive analytics solutions.

Level 3: Predictive HR Dashboard: When your organisation aims to progress beyond data analysis to making intuitive predictions based on emerging trends, choose tools that enable the study of behaviour for predictive purposes. For example, tools can help identify correlations between employee actions, such as updating LinkedIn profiles and frequent leaves, and their overall job satisfaction. While this example is simplistic, predictive tools like Python or RStudio facilitate advanced analyses for large datasets. Note that data science expertise may be necessary for optimal use.

Role of HR in People Analytics

The role of Human Resources (HR) in people analytics is instrumental in harnessing data-driven insights to optimise workforce management and boost organisational performance. HR professionals are key players in gathering, analysing, and interpreting data about employee behaviour, performance, and engagement.

1. Organisational Goals: This involves pinpointing key performance indicators (KPIs) that can offer valuable insights into various facets of the workforce, such as employee turnover, productivity, and satisfaction. By setting clear objectives, HR lays the groundwork for a strategic and effective people analytics initiative.

2. Technology Implementation: This could involve deploying HRIS (Human Resources Information System) software, using survey tools, and integrating analytics platforms. The HR function ensures that the data collected is precise, secure, and adheres to privacy regulations.

3. Data Interpretation: HR professionals use analytics to identify patterns, trends, and correlations within the workforce. For example, HR may analyse factors leading to employee turnover, enabling them to devise targeted retention strategies.

4. Communication: HR professionals must effectively convey insights and recommendations derived from analytics to other departments and senior management. This ensures that data-driven decisions are incorporated into the overall organizational strategies.

Frequently Asked Questions (FAQs)

1. What is the meaning of People Analytics?

People Analytics is the methodical application of data and analytics to comprehend, manage, and optimize various facets of the workforce, encompassing employee behavior, performance, and engagement.

2. What are the key benefits of implementing People Analytics in an organisation?

Implementing People Analytics in an organisation provides insights that assist in strategic decision-making, enhance workforce management, improve employee retention, identify talent gaps, and cultivate a data-driven culture, ultimately leading to organizational success.

3. What is the process involved in People Analytics?

The People Analytics process generally involves setting clear objectives, gathering pertinent data, employing analytics tools, analysing the data to extract insights, interpreting findings, and conveying actionable recommendations to inform organisational strategies.

4. How does People Analytics contribute to HR’s role in an organisation?

People Analytics equips HR professionals with data-driven insights that aid in talent acquisition, performance management, employee development, and retention strategies. It transforms HR into a strategic partner in accomplishing organisational goals.

5. Can People Analytics be customised to suit the specific needs of different organisations?

Yes, People Analytics is highly adaptable. Organisations can modify their analytics initiatives to align with their unique goals, industry dynamics, and workforce characteristics. This flexibility ensures that the insights derived are relevant and impactful for the specific context of each organisation.