People analytics is the newly adopted practice of data and analytics to gain insights into a workforce. It uses data to examine all aspects of people-related processes, challenges, and opportunities within a workplace. Also helps organizations make data-driven decisions, leading to more diverse hiring, better performance management, and higher retention rates. It is also known as HR analytics or workforce analytics.
In recent times, HR professionals have been using rapid data-gathering methods and several data analytics platforms. They employee AI techniques to develop and exemplify direct correlations between their actions and overall business performance. People analytics provides data-based improvements to how businesses operate. It enhances HR’s influence on overall company success.
What is People Analytics?
People analytics is an HR specialization that concerns organizing and interpreting employee-related data. It helps gain insights into various aspects of a workforce and make data-driven decisions. This approach enables organizations to make more informed and strategic talent decisions throughout the employee journey. People analytics are used to improve hiring, employee experience, engagement, retention, and business outcomes.
Types of People Analytics
HR teams have to analyze data sets collectively. This enables them to demonstrate the correlation between employee actions and business outcomes. Identifying which metrics to influence organizations can drive more strategic decisions. If you want to use people analytics within your organization effectively, you have four types of data metrics analyzing options to choose from.
- Workplace Monitoring
Combined with other metrics, they form a “big data” set. They reveal factors that impact your company’s performance. Examples of workplace monitoring metrics are open job requisitions, time and cost to fill vacancies, number of candidates and interviews per hire, worker productivity and quality, absenteeism, safety incidents, termination rates, and average employee performance ratings. - Organisational Performance
It focuses on how employee actions influence a company’s performance and lead to overall business success. These metrics include revenue per employee, operating margin (profit as a percentage of revenue after operating costs), earnings per share & total shareholder return. It also includes return on assets (ROA) which is computed by dividing net income by assets. - Key Customer
These metrics help understand how employee actions impact customer outcomes. Collaboration between your organization’s HR and CX teams creates a central database for combined analysis. Key customer metrics linked to employee behavior include customer satisfaction, net promoter score (NPS), retention, average revenue per customer, profitability, and product purchases per customer. - Employee Data Voice
It helps organizations understand the factors that impact their performance and workplace monitoring. This provides valuable insights into employee behavior, concerns, and perspectives. Standard data collection methods include Pulse surveys, 360-degree feedback, performance reviews, one-on-one meetings, onboarding & exit interviews, lifecycle monitoring, and candidate experience surveys.
Advantages
HR uses data to make evidence-based decisions in areas like recruitment, performance management, employee engagement, and retention. This reduces bias and ensures more objective choices by the seniors in your company. By examining employee interactions, organizations can also improve the overall employee experience. Therefore, data analysis helps HR teams showcase the impact of their initiatives, persuading leadership to continue investing in these efforts and predicting positive outcomes. Retention issues are easier to address by analyzing the costs associated with turnover. You can do so by implementing retention strategies. People analytics can also help you forecast future workforce needs, support succession planning, and identify key talent for development and success.
Recent studies have shown that organizations that have adopted people analytics are enjoying up to 82% higher three-year average profits. People Analytics also improves diversity, equity, and inclusion (DEI).
How do I Use People Analytics To Drive Business Results?
People analytics addresses issues like work uncertainty, high employee turnover, and economic challenges. Follow the below-mentioned strategies to drive better business results:
- Data-Driven Decision-Making
Cultivating a data-driven culture is essential for your organization. Key focus areas include HR processes, capabilities, technology processes & solutions for securely storing and analyzing data. - Focus on Diversity, Equity & Inclusion (DEI)
People analytics highlights workplace inequalities and unconscious biases. It allows businesses to create a more inclusive culture. You must know that companies that foster a sense of belonging enjoy greater employee engagement and better business outcomes. - Empowering Managers and the Frontline Employees
People analytics tools can help managers understand workforce needs and take informed actions. By using the right technology and insights, you can boost organizational performance. - Prioritising Employee Experience (EX)
AI tools like chatbots and employee sentiment analysis help organizations understand and address employee concerns. By analyzing feedback from multiple channels, your company can enhance EX and reduce employee attrition. - Linking People’s Data to Business Outcomes
Employee experience (EX) and customer experience (CX) are closely connected. Positive EX drives better CX and engaged employees to deliver better customer service. Improved EX also enhances financial performance, customer loyalty, and innovation. - Storytelling With Data
People analytics teams must use data to tell compelling stories and gain leadership’s attention. Humanizing data and linking insights to real business challenges ensures that decision-makers understand its value and importance. - AI-Powered People Analytics
AI has transformed HR by automating data analysis. It helps rapidly and efficiently recruit and enhances the employee experience. AI swiftly analyzes data efficiently to identify patterns and trends, like predicting which employees might leave or which candidates are best suited for a role.
Conclusion
People analytics requires organizations to handle personal and sensitive data carefully, ensuring ethical practices. Data privacy and security are crucial for every organization. Your organization must collect, store, and use employee data in full compliance with legal requirements, ensuring it is protected from misuse or unauthorized access. Transparent communication about data collection, its purpose, and its potential impact on employees’ careers and well-being is essential to obtaining informed consent. Additionally, your organization should prioritize freedom from bias, analyzing each employee’s data fairly and avoiding discrimination based on protected factors such as age, gender, or race.
Organizations must also establish clear policies to ensure ethical governance, providing protocols for employees to raise concerns. You have to set up specific individuals responsible for maintaining compliance with ethical standards. You must keep your organization engaged in continual evaluation and review of its ethical frameworks to keep up with evolving societal and regulatory requirements.
