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Why People Analytics is Imperative for HR Professionals

Human resources has entered a new era, with its role transforming hugely. From earlier serving largely as an administrative function focused on managing employees, HR is now expected to play a more strategic role by working closely with senior management to help the organization achieve its targeted business outcomes.

A key driver of this transformation has been people analytics. Now considered a must-have capability for HR professionals, its growing popularity can be seen in the following statistics:

  • According to the Global Human Capital Trends study by Bersin by Deloitte, 71% of companies see it as a high priority in their organizations
  • Another study by Bersin by Deloitte revealed that 69% of organizations have a dedicated team for this purpose, and are actively building an integrated store of people-related data

What exactly is people analytics? According to HR Technologist, it can be defined as “the deeply data-driven and goal-focused method of studying all people processes, functions, challenges, and opportunities at work to elevate these systems and achieve sustainable business success.” It is essentially a data-driven approach to HR, wherein HR seeks to collect and analyze people’s data to extract insights that could help HR leaders work with senior company management to solve particular business problems.

The following are the types:

  • Descriptive analytics: Answers the “what” of something that has happened, using data to understand and reflect on something that had already happened in the past
  • Predictive analytics: Answers the “what could happen” i.e. predicts the future based on the past, through statistical models and forecast techniques
  • Prescriptive analytics: Answers the “what should be done” i.e. uses simulation algorithms to offer HR professionals a solution most likely to provide the desired outcome, from among different possible solutions
  • Strategic analytics: Answers the “why” by developing causal models and looking for the reasons for a certain occurrence

Applications of people analytics are many. It can be applied to a wide range of business issues, such as:

  • Market trends that might pose a threat to their company
  • Understanding opportunities for business development

The key function is problem-solving, and its effective use can have an upward impact on the bottom-line of the organization.

Proper, successful implementation requires a number of steps. These are mentioned below:

  1. Get buy-in from the C-suite: Successful implementation at a company cannot happen without the company leadership is on board with the initiative. Convincing them of the relevance requires showing them the numbers and applying the analytics to their challenges. The insights gathered will be proof of the worth of executive leadership.
  • Use the data that matters: It is important to identify data relevant to business goals from among the masses of data that flow into the company and accordingly set key performance indicators (KPIs). This allows more targeted use of limited resources and time.
  • Put together a team: Given that most HR professionals do not know much about reading and analyzing data, they must be provided with the necessary education and training. When they have been trained, they should be included in a dedicated team for the purpose, and given the multidisciplinary nature of the field, there should be members from other departments too.
  • Use the right tools: Specialized software for this purpose works better than some embedded functionalities in the HRIS. Many different tools are available in the market, and using such specialized tools helps to collect, analyze, and use the data for the benefit of the company, along with automating and customizing data reporting.
  • Understand legal constraints: Data collection involves ethical and legal constraints, implying that confidentiality, privacy, and security must be upheld as per standards. HR leaders must ensure that employee privacy is respected and there is openness and transparency about data collected.

What are the benefits of companies? Though current use is often seen in reporting on HR metrics (such as diversity, gender pay equity, and turnover) and benchmarking, there are many more things that can be done:

  • Make a business case for HR initiatives: use the insights gathered to make a business case – backed by data – for new HR initiatives proposed to be implemented in the company.
  • Demonstrate the effectiveness of HR interventions: Data can reveal how well particular HR initiatives and policies worked, and enable a choice between different options.
  • Transform the HR-employee relationship: Employees expect to be treated as consumers, and HR can use analytics to improve the employee experience.
  • Make data-driven decisions: Gut feelings have value but are often unreliable, and HR analytics enables better, more reliable decisions to be made.
  • Become a strategic partner: From just leading administrative functions of hiring, disbursing salaries, and others relating to people, HR leaders can become strategic partners of senior management, taking better decisions backed by strong data.

With a proliferation of data as well as of technology-driven tools to analyze it, the future of people analytics definitely looks bright, offering competitive advantages to companies and a much-improved experience to their employees.

Niti Sharma is a professional writer, a blogger who writes for a variety of online publications. She is also an acclaimed blogger outreach expert and content marketer. She loves writing blogs and promoting websites related to the education and technology sectors.

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