What is people analytics?
People analytics is the use of data to make decisions about people. In the case of human resources management, people analytics relates to using data science to make decisions about your workforce. It is sometimes referred to as workforce analytics or HR analytics.
People analytics leads to actionable insights and supports companies in making evidence-based decisions rather than those based on anecdotes, instinct, unconscious bias, or politics.
Why should a company care about people analytics?
People analytics allows human resource management professionals to visualize HR data to improve a range of processes. These include :
Workforce planning :
Talent analytics can be used to identify trends in the workforce, such as retirements, resignations, and new hires. This information can be used for a prior analytics experience and plan for future workforce needs.
People analytics can be used to identify the best sources of talent, the most effective recruiting channels, and the characteristics of successful employees.
People analytics can be used to identify the factors that lead to employee turnover, such as low pay, lack of development opportunities, or poor working relationships.
Reward and recognition :
People analytics can be used to identify the factors that contribute to employee satisfaction, such as job satisfaction, pay, and benefits.
Payment and benefits :
People analytics can be used to identify the most effective methods of payment and benefits, such as bonuses, stock options, and contributions.
HR software allows HR managers to conduct people analytics more easily than ever, thanks to the way the data is captured and stored automatically. Some platforms have ready-formatted reports that can be used quickly for efficient and accessible analysis.
What is the process of people analytics?
The people analytics process contains five essential stages:
1. Define the business problem or opportunity:
The first step is to understand the business challenges that you are trying to address with people analytics.
2. Collect and clean data:
The second step is to collect all of the relevant data that you will need to answer your question. This data may come from a variety of sources, such as surveys, performance reviews, demographic data, and HR system data. Once you have collected the data, it is important to clean it so that it is ready for analysis.
3. Analyze data:
The third step is to analyze the data to answer your question. This step will involve using various statistical techniques to find trends and relationships in the data.
4. Present findings and recommendations:
The fourth step is to present your findings in a way that is easy for others to understand. This may involve creating charts, graphs, or tables.
5. Take action:
The final step is to take action based on your findings. This may involve making changes to your HR policies or processes.
Each stage is important to ensure that the final product is fit for its purpose and able to answer the initial question.
How can people analytics be beneficial to a company?
People analytics can benefit a company because of the way it helps turn people's data into a strategic asset.
Rather than guessing at the best approach or trying to predict what will happen in the future, people analytics gives business leaders hard facts that they can use to identify trends and patterns in the workforce.
Some specific examples of how people analytics can benefit a company includes:
Improving retention :
Used carefully, people analytics can identify employees who are more likely to leave your company. With this knowledge, managers and HR can take steps to retain those employees.
More importantly, HR can review patterns in employee turnover to understand if a certain demographic, role, or level is more likely to leave than others and analyze why that might be. They can then take steps to address their findings and so improve retention.
Improving recruitment :
Not only can people analytics help keep your employees, but it can also help bring the right people on board. Applicant tracking software can be used to reduce unconscious bias and improve your team’s chances of finding employees that are best suited to open positions.
Improving employee development :
By using people analytics to measure training, productivity, and performance, HR managers can support employees and managers with the best training for their needs. At a simple level, you can see who has and who has not completed mandatory training.
On a higher level, you can identify skills gaps or areas of strength and then work with managers and those employees to create tailored training plans. As well as the benefits to employee engagement, this also helps you identify training budgets more accurately and assess the future benefit of that investment.
Enhancing employee health and well-being :
By using people analytics carefully, HR managers can unlock data to support a change in health and well-being strategy. Indicators such as absence rates, uptake of annual leave, working hours, and performance data can help create trends to understand the impact of changes to working hours, team composition, managers, and even new training.
This, in turn, allows a more intentional approach to developing a health and well-being strategy and monitoring its impact on your employees.
What are the key people analytics trends?
1. The rise of predictive analytics :
While people analytics has been around for a while, the recent rise in predictive analytics is changing the game.
Predictive analytics capabilities use historical data to identify trends and patterns that can be used to predict future behavior. This is particularly useful for HR managers as it can be used to predict things like employee turnover or skills shortages.
2. The increasing use of data visualization :
Data visualization is a way of representing data-driven insights in a graphical format. This can be useful for human resources professionals as it allows them to quickly and easily see patterns and trends in the data analysis.
3. The use of machine learning :
Machine learning is a form of artificial intelligence that allows computers to learn from data collection. This is a relatively new area, but it is already having an impact on people analytics.
Machine learning can be used to automate tasks such as performance reviews or to identify patterns in data analytics that would be difficult for humans to spot.
4. The increasing use of social media data :
Social media data can be a valuable source of data for talent management. It can be used to understand employee sentiment or identify potential recruits.
5. The increasing importance of data governance :
Data governance is the process of ensuring that data science is accurate, complete, and up to date. This is becoming increasingly important as the amount of data grows and the reliance on people analytics increases.
People analytics is a powerful tool that can be used to improve a wide range of HR functions. By understanding the key trends, HR professionals can make sure they are using people analytics most effectively.