The Role of People Analytics in Organizational Growth

Data-driven insights have exploded in every sector and Human Resources is no exception. Technological advancements like Cloud-based HR systems, advanced analytics, Artificial Intelligence (AI), chatbots, Virtual Reality (VR), Augmented Reality (AR), gamification, automation, blockchain etc., are transforming the way businesses work, but when it comes to HR, arguably it’s people analytics that’s impacting day-to-day decisions the most.

The Role of People Analytics in Organizational Growth

What is People Analytics or HR Analytics?

People analytics or HR analytics, refers to analytics that can help managers and executives make better management and business decisions about their employees or workforce. It is often integrated with a Human Resource Management System (HRMS) and has eased the transition of HR from being transactional and reactive administrative arm to a strategic and proactive one.

Shifting to data-based people management:

Organizations everywhere are perceiving it as business function focused on using data to understand every part of a business operation, aiming to become digitally powered people-centric enterprises based on real-time actionable insights. As per a study conducted by Deloitte, 71% companies see people analytics as a high priority in their organizations and 31% rate it as very important.

Today’s businesses value evidence-based insights as it enables better decision-making in all HR tasks, starting from recruiting to compensation, workforce planning to retention. Besides, as people costs often surpassing 50% of corporate variable costs, it is only sensible to manage such large expenditures analytically vs subjectively. Google had implemented people’s analytics long before it had become a trend and also uses feedback to optimize various aspects of its people processes and create a unique and rewarding work culture.

So, how exactly is people analytics benefiting businesses?

Strengthen Decision Making:

At it’s very core, people analytics aims to provide organizations with more data, enhancing clarity in perspectives and empowering definitive decision-making. It enables organizations to manage their employees more efficiently and effectively by providing options for viewing, understanding and acting on talent data across the entire employee lifecycle.

Recruiting right:

HR professionals won’t shy away from admitting that there is a fair amount of instincts involved when hiring an employee, which may or may not be proven right in the long run. People’s analytics can take this guesswork out of the hiring process, analyze the possibility of a candidate being the right fit for an available post and even predict a tentative by skills, interests and actions. When hiring a candidate personality and skills are just as important qualifying factors as the candidates’ academic credentials and professional experience. Data analytics helps to meet the exact criterion an employer might have by crunching numbers more accurately. To give an example, JetBlue Airlines previously emphasized niceness’ as the most important attribute for flight attendants.  However, after conducting a customer data analysis with the Wharton Business School, they found that ‘being helpful’ trumped niceness and henceforth shortlisted candidates more effectively.

Additionally, sourcing, hiring, training and nurturing talent are all time-intensive Human resource processes. People analytics allows you to identify the people and programs that are appropriately aligned with your business enabling you to optimize the time and investment thereby saving time.

Establishing an organization as an employer brand:

Establishing a strong employer brand is a necessity today. A recent study found that 84% employees would not hesitate to switch jobs (along with a minimum salary hike) if their new employer has a stellar reputation. But how can people’s analytics help businesses to avoid such a situation?

Once an organization pens its brand strategy from an employee shareholder viewpoint and confidently differentiates itself from competitors, analytics can help to understand how the current brand stand compares with reality. Analysis of the findings from regular sentiment analysis, internal surveys, employee participation rates in community activities reveal how happy employees are currently. One crucial point to remember is that people’s analytics is not only about keeping current employees satisfied but also to make the business appear attractive to outsiders, including ex-employees. Taking everyone’s opinion into consideration also helps to understand how an employee, current or ex, is likely to recommend the employer to others.

Improve Retention:

Employee acquisition costs more than retention. And People Analytics offers an answer. Its predictive modeling can help to identify flight-risk employees before they consider leaving. Accordingly, the management can take proactive steps to encourage them to stay.

Drive Accountability:

Till now stakeholders have had limited insight into individual employee performance and had to depend on manual review and reports for the same. Analyzing long reports are time consuming, with ample scopes of human error. Now, with people analytics, data visualization has enabled access to easily understandable insights that can be acted upon easily and instantly. Transparency of information has also increased accountability on both employees’ and HR’s parts.

Improving employee experience:

One area that HR constantly struggles with is designing compelling user experiences for employees, especially ones that support engagement and improves loyalty. People’s analytics can enable HR design activities that would successfully improve experiences for their employees, and in an ideal situation, others too. For instance, in an attempt to improve employee wellbeing after considering employee feedback about work-life balance, Google in Ireland started the “Dublin Goes Dark” initiative. In this campaign employees were encouraged to leave their devices at work to help them truly disconnect and switch off. On the other hand, this Japanese company pays its employees to get a good night’s sleep and not overwork, inevitably compromising their health. Many Japanese companies have been encouraging employees to take time off to rest in an attempt to change Japan’s overworking-to-death culture, named Karoshi.

The role of Human Resources has been evolving and people analytics, understandably, is an integral part of this shift. With the growing demand for high-performing, specialized talent, HR leaders now leverage analytics to seek answer to critical questions about workforce planning, skills gap and employee retention, which are ultimately enabling them to add value to their organizations.

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