From your job to your browsing history and phone, data is everywhere.
But that data primarily comes in one size: big data. And how do businesses use their data? With analytics.
With so many data buzzwords doing rounds, you’ve probably heard of data analytics, predictive analytics and maybe even prescriptive and descriptive analytics, but what about people analytics?
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Article Roadmap
- What Is People Analytics?
- Benefits
- How Does It Work?
- Potential Risks and Challenges
- How To Implement a Successful People Analytics Strategy
- What Are the Future Trends in People Analytics?
- Next Steps
What Is People Analytics?
People analytics, or HR analytics, is the process of collecting, analyzing and interpreting employee-related data to improve workforce management and decision-making. It uses data from HR systems, employee surveys, performance evaluations and other workforce-related metrics.
People analytics insights help organizations make informed decisions about recruitment, talent management, employee engagement, retention and other aspects of HR. This, in turn, helps them optimize their recruitment process, identify the most effective training and development programs, and develop strategies for employee engagement and retention.
People analytics also help identify potential compliance and legal risks, so the organization can take timely corrective action to mitigate these risks.
Benefits
- Better Recruitment Decisions: People analytics help organizations identify the most effective candidate sources and assess the skills and experience of potential hires.
- Improved Employee Engagement: Organizations can develop targeted employee satisfaction and retention strategies by analyzing employee feedback and engagement data.
- Increased Productivity: People analytics help identify the contributing factors to high or low employee productivity and develop strategies to optimize workforce performance.
- Efficient Talent Management: People analytics help identify high-potential employees and develop targeted development plans to improve their skills and advance their careers.
How Does It Work?
Short answer: People analytics collects and analyzes people-related data in the workplace to gain insights into workforce behavior and performance.
Long answer: People analytics typically involves the following key steps:
- Data Collection: Gather relevant data from various sources, such as HR systems, employee surveys, performance evaluations and other workforce metrics. Analysts can access and analyze this data in a structured and consistent manner because it’s collected in a centralized database.
- Data Analysis: Analyze the data with statistical and analytical tools to identify patterns, trends and insights. You can also use data visualization tools like dashboards and charts to simplify data interpretation.
- Insight Generation: The insights generated from the data analysis inform decision-making and develop workforce management strategies.
- Action Planning: Based on the insights generated, organizations develop action plans to implement changes to their workforce management strategies.
- Evaluation: Finally, evaluate the effectiveness of the action plans through ongoing monitoring and analysis of workforce data.
Potential Risks and Challenges
Even though people analytics seems like a complete win on paper, looks can be deceiving.
Like everything else, people analytics also comes with risks and challenges. Since we’re here to give you a complete picture, let’s start with the risks:
- Privacy and Data Security: People analytics raises privacy concerns, as it relies on collecting and storing personal information about employees. There’s a risk that sensitive employee information could be compromised or misused, resulting in legal or reputational damage to your organization.
- Bias and Discrimination: Incomplete or inaccurate data may lead to bias, resulting in discriminatory practices or decisions.
- Employee Resistance: Your employees may resist using people analytics, particularly if perceived as an invasion of privacy or a way to monitor and control their behavior. This resistance could result in lower engagement, morale and productivity among employees.
Let’s also look at some people analytics challenges:
- Data Quality: The quality of the data used in people analytics is crucial for generating accurate insights. Ensuring data quality can be challenging, as it may be incomplete, inconsistent or inaccurate.
- Technology and Infrastructure: People analytics requires advanced analytical tools and technology infrastructure to manage and analyze large amounts of data. You may need help acquiring the necessary tools and infrastructure or need more technical expertise to use them effectively.
- Privacy and Ethical Considerations: People analytics largely depends on the personal information about employees, raising privacy and ethical considerations (more on that soon). You must ensure compliance with data protection regulations and maintain ethical standards in the use of employee data.
- Resistance To Change: People analytics may face opposition from stakeholders used to traditional HR processes and practices. Managers may be hesitant to relinquish control and adopt new data-driven approaches to decision-making.
Ethical Considerations
It’s critical to adopt ethical principles and practices in using people analytics. You must ensure that data use is responsible, transparent and respects the rights of employees.
Some key ethical considerations we strongly recommend for people analytics:
- Inform employees about the collection and use of their personal data and provide informed consent.
- Be transparent about your use of people analytics and communicate the purposes and benefits of such analysis to employees.
- Use people analytics in a way that respects the autonomy and agency of employees. It shouldn’t treat them purely as data points or objects for analysis.
How To Implement a Successful People Analytics Strategy
Implementing a successful people analytics strategy requires a commitment to data-driven decision-making, continuous improvement and effective stakeholder communication.
With the following principles, you can leverage people analytics to gain valuable insights into your workforce and develop effective strategies for talent management, employee engagement and retention.
- Leadership Buy-in: Implementing a people analytics strategy requires buy-in and support from leadership. Without this support, securing the necessary resources and making the changes needed to achieve success may be difficult.
- Technical Expertise: People analytics requires advanced analytical tools and technical expertise to manage and analyze large amounts of data effectively. Organizations should invest in building the necessary technical expertise and infrastructure to support their people analytics strategy.
- Continuous Improvement: People analytics requires continuous improvement. Organizations should regularly evaluate the effectiveness of their people analytics strategy, refine their approaches and make adjustments based on data-driven insights.
People Analytics Software
How does software aid people analytics?
It does so by collecting and analyzing large amounts of data related to employees’ performance, behavior and engagement. Software also helps identify patterns, trends and correlations between various employee data points. Its automated data collection and analysis allows you to gain valuable workforce insights quickly and easily.
With the data-driven insights by people analytics software, you can make informed decisions on how to improve employee performance, productivity and retention.
For practical understanding, here are some examples of how companies have used software for people analytics:
- Google uses people analytics software to track employee performance and engagement. They found that managers impact employee performance significantly, so they developed a program to train managers for effective leadership.
- IBM uses people analytics to identify employees who are at risk of resigning. By analyzing various data points such as job satisfaction, commute time and salary, IBM could predict which employees were likely to resign and take timely action to retain them.
- Unilever uses people analytics software to improve its hiring process. By analyzing data on successful hires, they were able to identify the key skills and characteristics that make a good fit for the company. This information helped them develop a targeted recruiting strategy.
What Are the Future Trends in People Analytics?
Per a recent People Analytics Trends report:
“Of the 42% of companies who stated they have a data-driven culture… 90% are confident their work delivers value to the business.”
What developments can you expect in the people analytics world in the near future? Here are some takeaways:
- Increased use of predictive analytics to forecast future workforce trends and to predict employee behavior.
- More focus on improving the employee experience through data-driven insights that can inform employee engagement, diversity and inclusion and employee wellness initiatives.
- Enhanced use of real-time analytics to provide managers with up-to-date information about their workforce, enabling them to make data-driven decisions quickly.
- Increased use of augmented analytics to automate data preparation, analysis and insights, simplifying complex data sets for non-technical users.
The future of people analytics centers on leveraging data-driven insights to improve talent management, optimizing workforce planning and enhancing the overall employee experience.
Next Steps
People analytics has emerged as a critical tool for gaining valuable insights into your workforce and driving better business outcomes.
However, by leveraging data-driven insights, people analytics raises several ethical considerations regarding privacy, fairness and transparency. As such, make sure to maintain ethical standards in your use of employee data and comply with data protection regulations.
Overall, the importance of people analytics will only continue to grow as organizations seek to optimize their human capital management and drive better business outcomes. If you’re looking for an HR solution to assist your analytics process, our free comparison report makes it easy to evaluate products based on the features you’re looking for.
How has your business benefited from people analytics? Let us know in the comments.
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