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What is People Analytics?
People analytics is the use and interpretation of data to understand and improve the business. People data is analyzed to help the company’s leadership improve their decision-making. You can gather data about nearly every HR concern: productivity, engagement, why people quit, why people are fired, diversity issues, benefits usage, attendance, safety records—if you can track it, you can use the data to shed light on what will or will not work to achieve goals and improve the bottom line.
There are three basic types of data to track:
- People data strengthens areas like talent sourcing, acquisition, and retention; culture fit and engagement; employee wellness; diversity and inclusion, and many more.
- Program data is used to assess the use of software, onboarding processes, and training programs of all types, from leadership to diversity and inclusion training.
- Performance data includes the productivity of employees as well as the organization in general. Data includes employee performance assessments, attendance tracking, employee lifetime value, human capital ROI, and more.
History of Analytics in HR
While the idea of analytics in HR has been around for years, it hasn’t really been used until the 21st century. HR analytics became a role or HR focus in the early 2000s. In the 2010s, companies like Google and Microsoft made it a real focus, and since then, analytics in HR has become a large conversion topic and focus for many companies beyond large corporations.
Benefits of Data-Backed HR
While how you gather and use data may be unique to your company, there are many common benefits HR data can provide.
- Increase buy-in from leadership. Business leaders often speak in numbers. It can be difficult to get their support on topics such as employee morale or company culture. By connecting people analytics with financial data, you can correlate behavior with costs or revenues. Historical trends and correlations help your leaders understand why the issues are significant and how they can take action.
- Hiring. Using data can help you recruit more effectively, increase the quality of your new hires, and reduce the time it takes to hire and onboard a new employee.
- Retention. Data can help you find out what has the strongest impact on your employees’ performance, success, and happiness. Also, as you collect feedback and respond to it, your employees feel listened to and valued.
- Employee engagement. Use data to track the success of your engagement efforts and identify employees who are losing motivation or facing performance issues.
- Reduce bias. Decisions made within the company and HR are vulnerable to bias. Using data decreases the effects of bias and results in stronger decisions.
- Proactivity and prevention. Watching data often brings issues to your attention before problems erupt.
- Performance. Analyzing the performance of employees, HR, and the company overall will result in higher ROI, higher KPI results, etc.
- Add value. With people analytics, HR can become a critical business function to your organization, fully capable of protecting, supporting, and deploying the company’s most important asset: its people.
How to Get Started with People Analytics
People analytics can be daunting. But even though you may not be a big corporation with thousands of employees and a whole department dedicated to analytics, you can still use people analytics within your organization.
Set Your Goals
First, look at your business goals and how HR processes affect these goals.
For example, let’s say your business’s biggest goal is to have happy, lifelong customers. Well, HR works with the employees who work with these customers. Find and look at data to see if employee job satisfaction correlates with customer satisfaction. If you find that to be true, you can use more data to discover how best to improve employee satisfaction.
Brainstorm some of the many ways that people analytics can support your organization’s values and goals, and prioritize which you can best address. Look for a way to have a quick win at the beginning. Focus on a question where finding a result will not be hard, and where the result will make sense with your intuition. Having a successful first project builds momentum and helps others get behind the idea of people analytics.
Analysis paralysis is the term for getting caught up in analyzing data that isn’t helpful or doesn’t answer any meaningful questions. Identify the goals for your data, create some questions to answer, and stay on task. Start simple and dig deeper where you can. To help you get started, here are some examples of basic questions you could dig into data to answer.
- What are the top reasons employees resigned from the company in the last year?
- How does education, previous experience, or other qualifications correlate with employee performance and upward growth?
- Do the company’s diversity ratios match geographical ratios?
- Which teams report the highest satisfaction rates, and why?
Find Your Tools
People analytics data is most commonly collected through applicant tracking systems (ATS), HR information systems (HRIS), or human capital management (HCM) software. These tools automatically track and store data from the hiring, performance management, and compensation processes. Many of these systems can export custom reports and visualizations which can be very helpful. Other means of tracking data can come from more manual tools, such as employee surveys or performance reviews. Data from these sources can be imported into Excel or Microsoft Power BI to begin the actual analysis.
Learn How to Analyze Data
If you don’t know how to manipulate data using Excel or similar tools, you need to either learn how or find someone who can. Many ATS, HRIS, and HCM tools can analyze data for you, but they only go so far. For the strongest and most tailored data analytics, you should dig deeper and discover why certain trends exist in the first place.
Look within your organization for employees who can help you make a shift into collecting and analyzing data. Find a manager or executive who agrees that data is important. A fellow data supporter can be a great ally in changing the company culture and expectations around data.
Establish a Schedule
Your organization and its people are changing all the time. To stay fully aware of the needs and interests of your employees, establish a schedule to run regular analytics. Schedules could be built around regular employee engagement surveys or fiscal years. Add a few events to your HR calendar to conduct regular analyses, ensuring you stay on top of discovering important employee trends.
Once you discover areas that need improvement or change, set goals, make plans, and take action! Setting new goals for each analysis cycle will help your business steadily improve and adapt to an ever-changing business environment.
Document and Communicate
Keep a record of the insights and actions your people analytics program brings about. Record impacts in qualitative data as much as possible in order to show leadership your ongoing success and help them see HR as a critical function and contributor.
Other Tips for People Analytics
Here are some helpful pointers for using people analytics.
- Administer regular employee climate surveys. Send out surveys that measure employees’ views and opinions of the organization and their work. Doing this regularly will bring in a steady flow of meaningful data to work with. Many companies survey employees once or twice a year.
- Prepare to translate qualitative data to quantitative. When creating employee surveys, stick with Likert scales (in which you ask the person to answer a question by rating it on a scale of one to five, for example). This allows you to turn qualitative opinions into quantitative data. Open-text responses (essay questions) can still be used, and it’s usually a good idea to at least have at least one; just remember that it’s harder to analyze qualitative responses.
- Communicate your findings. Don’t keep meaningful findings to yourself. Share important trends and correlations with business leaders and other stakeholders. Coach them on how they could improve in certain areas, and praise them when their employees report positive experiences.
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Katie is currently studying at BYU, with a HRM major and Statistics minor. She works there as an HR research assistant and also works as an HR Generalist at a local company, and both jobs provide her with a wide variety of experiences. Katie’s passion lies in HR and People Analytics, where she can discover and use data to help everyone understand and improve the workplace for a universal benefit.
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Brandon is currently a People & Capabilities Advisor at Thiess where he helps implement HR strategies in Salt Lake City and Colorado. He recently graduated with his MHR and MBA at Utah State University, where he also received his bachelor’s degree in Communication Studies with minors in HR, business management, and technical sales management. He has filled professional roles as an HR business partner, an HR generalist, and a senior recruiter; and has exceptional experience in people analytics, compensation, and talent development. Brandon is a strong advocate for HR strategy and helping business leaders understand the true power of maximizing employee potential.
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