Building the People Analytics Ecosystem: Operating Model v2.0
With the recent public launch of our latest Insight222 Building the People Analytics Ecosystem: Operating Model v 2.0 research we wanted to highlight some of our key findings, what it means for people analytics, and how it can drive strategic decision-making and deliver impactful business outcomes.
Figure 1: Five Trends Shaping People Analytics (Source: Insight222 Building the People Analytics Ecosystem: Operating Model v 2.0)
Our research into the discipline and activities of people analytics has found that the function is now at the heart of business decision-making. Over the last five years, people topics have become more influential and important for businesses than at any time in recent history.
People analytics has enabled companies to adapt to new ways of working such as remote and hybrid, advance their company’s societal commitments, and support their company in becoming a skills-based organisation.
In global companies, people analytics has delivered enterprise-wide digital transformation programmes for HR, and now spearheads the adoption of AI and gen AI technologies to optimise people processes and enhance HR outcomes.
Insight222’s Research into the Operating Model for People Analytics Functions
To deliver on these expectations, a new operating model for people analytics is required that captures the evolving capabilities needed in a people analytics team, as well as the changing, strategic role of the people analytics leader.
At Insight222, we have dedicated ourselves in 2023 and 2024 to studying the operating model for people analytics functions. Our research focused on data gathered
from over 270 companies during the summer of 2023. These companies represent 4,800 people analytics practitioners and 16.3 million employees.
We supplemented this with interviews with people analytics leaders in 20 global organisations during the first quarter of 2024 across ABCD Teams. These are four types of people analytics teams that invest to varying levels and deliver varying amounts of value.
Now, in mid-2024, we announce the People Analytics Ecosystem.
Figure 2: The People Analytics Ecosystem (Source: Insight222 Building the People Analytics Ecosystem: Operating Model v 2.0)
The way in which the value of people analytics is scaled to the business through a data-driven HR strategy requires an effective partnership of ecosystem capabilities and relationships that, when combined, provide agility, efficiency, and scale for the organisation.
For leaders of well-established people analytics teams, having these capabilities and partnerships in place is essential. One such leader is Dawn Klinghoffer, Head of People Analytics at Microsoft. For Dawn, these important ingredients lead to effective prioritisation. She says:
“I ensure my team has what we need to prioritise and deliver ground-breaking insights - whether that is within our organisation or in partner organisations. Building strong partnerships across the organisation or function is critical to gain alignment on the priorities that you are delivering together."
The People Analytics Ecosystem – Characteristics
We will now introduce you to the next generation of people analytics operating model – the People Analytics Ecosystem – and its six characteristics:
1. Value Chain
The value chain model takes an “outside–in” approach (see Figure 3). The client drivers include the business strategy, market demands, and stakeholder requirements.
This outside–in approach empowers the function to focus on business challenges and to drive business impact: the experience that the workforce has, as well as broader topics such as how the workforce impacts customers, how employees affect market growth and product launches, and how the workforce interacts with the communities they serve. It will produce business outcomes that are more impactful for the enterprise.
Figure 3: The People Analytics Ecosystem is based on an outside–in value chain. (Source: Insight222 Building the People Analytics Ecosystem: Operating Model v 2.0)
2. People Strategy at the Centre
The symbiotic relationship between people analytics and people strategy is essential for the effective operations of HR. Our Insight222 People Analytics Trends Report for 2023 confirms this.
In that research, “A” Teams – those people analytics teams that invest the most and deliver the greatest value – show that the people analytics leaders and CHROs have the closest relationships and meet very frequently. Because of this close relationship, the people analytics leader is constantly informing and influencing the people analytics strategy. And vice versa, the people strategy is constantly informing people analytics priorities.
Figure 4: People strategy is the bedrock of the People Analytics Ecosystem. (Source: Insight222 Building the People Analytics Ecosystem: Operating Model v 2.0)
3. Five Core Capabilities
These are capabilities that are essential and “non-negotiable” to the successful functioning of the people analytics team. For people analytics to drive value for the organisation, these roles must report directly to the people analytics leader, regardless of the tenure of the people analytics team or the size of the organisation.
These capabilities are:
Demand Engine: consulting;
Solutions Engine: data science and research, employee listening, analytics at scale;
Implementation Engine: adoption.
Figure 5: Five core capabilities fuel the People Analytics Ecosystem. (Source: Insight222 Building the People Analytics Ecosystem: Operating Model v 2.0)
4. Four Additional Capabilities
These capabilities are required for achieving objectives during a particular phase of the people analytics evolution, or because of specific business demands.
The leaders responsible for these additional capabilities may report directly to the people analytics leader, or they may report elsewhere in HR and partner closely with the people analytics team. They can move into or out of the people analytics leader’s direct control depending on the availability of skills or the strategic goals of the organisation.
These capabilities are:
Solutions Engine: reporting, data governance, workforce planning, AI strategy
Figure 6: Four additional capabilities enhance the People Analytics Ecosystem. (Source: Insight222 Building the People Analytics Ecosystem: Operating Model v 2.0)
5. Internal Partnerships
These are partnerships within HR and the broader organisation that are essential for people analytics functions to scale to the business needs. The relationships developed with these stakeholders will drive value and ensure risks are managed. They will also ensure the alignment of people analytics with other business activities and priorities.
The people analytics leader and experts within the people analytics team are responsible for ensuring that these partnerships operate effectively.
Figure 7: Internal partnerships are an essential ingredient of the People Analytics Ecosystem. (Source: Insight222 Building the People Analytics Ecosystem: Operating Model v 2.0)
6. External Partnerships
These are partnerships with third-party providers outside of the organisation. These provide services, solutions or technology to the company and enable the people analytics leader and their team to build a data-driven culture across HR.
Without effective external partnerships, people analytics, as a function within an organisation, will not be able to deliver on its potential. It is important for people analytics to leverage the best ideas and solutions external to the company, to scale and deliver.
Figure 8: External partnerships will enhance the performance of people analytics and complete the ecosystem. (Source: Insight222 Building the People Analytics Ecosystem: Operating Model v 2.0)
What does this mean for the role of the People Analytics Leader?
The people analytics leader is at the centre of the People Analytics Ecosystem and therefore that person is at the centre of the people strategy.
That means that in mature organisations, the focus of the people analytics leader and their team is heavily influenced by the CHRO, the people strategy needed to compete in the marketplace, and the trends affecting people analytics.
Our research has shown that in the People Analytics Ecosystem, the people analytics leader fits into one of three distinctly different personas:
The Data and Analytics Specialist Leader: This persona has a role that is focused on a scope for data and analytics research, insights and analytical product development and deployment.
The Analytics-led Strategy Leader: This persona has a role that encompasses a broad set of analytics responsibilities, including consulting, research, employee listening, product development, reporting, data governance, workforce planning and AI.
The Portfolio Analytics Leader: This persona describes a leader who has people analytics as part of their responsibilities, and as such a “portfolio” of responsibilities. The portfolio analytics leader mostly has responsibility for people analytics and one or more other closely associated topic, such as people strategy, HR technology, HR operations, skills management, or employee experience.
Figure 9: Responsibilities of the three people analytics leader personas, aligned to the People Analytics Ecosystem. (Source: Insight222 Building the People Analytics Ecosystem: Operating Model v 2.0)
Download the full report to understand these personas in more detail, the responsibilities that align with each and to access case studies from people analytics leaders themselves.
CHROs & People Analytics Leaders: Build the People Analytics Ecosystem in your Organisation
The People Analytics Ecosystem exists today in organisations of fewer than 1000 employees and greater than 500,000 employees – and everything in between. It also exists in organisations that are heavily centralised, and in companies that are federated in nature – and all types of companies in the middle.
In short, the People Analytics Ecosystem is not about a linear structure. It is about capturing the spirit of what people analytics is intended to deliver. It is about using an “ecosystem” of capabilities, skills, technologies, and stakeholders to drive business value.
As we say, people analytics is about the business. It is not about HR. And the People Analytics Ecosystem is the new operating model to make that happen.
To find out how to build this new operating model of essential capabilities and partnerships and drive greater business value, download the Insight222 Report – Building the People Analytics Ecosystem: Operating Model v2.0.
Unlock the potential of your people analytics function with our Insight222 People Analytics Program®
Network with peers. Grow your influence. Solve business problems. Learn from industry leaders.
The Insight222 People Analytics Program® is your gateway to a world of knowledge, networking, and growth. Elevate your network and insights with the Insight222 People Analytics Program®. Become part of an elite circle of 100+ global clients driving people analytics forward. Engage in over 40 unique events yearly, from in-person meetings to virtual forums and webinars. Benefit from a program that evolves with your feedback, designed to tackle real-world challenges and ignite innovation in people analytics.
Discover how joining the Insight222 People Analytics Program® can help you deliver real business value to your organisation.