Our 2022 Insight222 People Analytics Trends research found that people analytics as a discipline has grown in importance. This is evident from the continued investment that global organisations are making in growing their people analytics functions. Our research also shows that the percentage of companies experiencing an increase in the size of their people analytics teams has increased yearly since 2020, with 65% having increased their team size in 2022.

In addition, this trend of increased investment in people analytics is expected to continue. Of the 184 companies we surveyed, 68% predict their team size will grow in the next 18–24 months, even given the current macroeconomic factors impacting the business world.

This shows that the investment in people analytics due to the pandemic was not a “flash in the pan” and that Chief Human Resources Officers (CHROs) value the specific expert skills that workforce analytics brings to the table.

Many factors are behind the growth in the importance of people analytics in recent years. Drawing on examples from Leading Companies in People Analytics, this article will explore five of these trends in more detail:

Key business challenges - the economic situation in recent years has led to complex people topics rising to the top of the business agenda.
C-Suite decision making – the C-Suite wants decisions informed by data from all functions, including H.R.
The board of directors as a key stakeholder – boards of directors and company investors are increasingly asking complex questions about human capital topics.
Emerging data sources and people analytics technologies – the emergence of specialist technologies that allow for employee data analytics using huge volumes of quantitative and qualitative data
Personalised people analytics – more demand by employees for personalised learning and career mobility

Key Business Challenges

Over the last three years, global people events have defined strategic business topics. The twin crises of the global COVID-19 pandemic and racial inequality have permanently changed employee expectations of work. Several shocks have hit a world economy already weakened by the pandemic, including higher-than-expected inflation and the impact of the war in Ukraine. Furthermore, Chief Executive Officer (CEO) concerns over the availability of key skills needed to drive growth continue.

Insight222’s research found that people analytics teams are focused on supporting their organisations to navigate these global societal and economic challenges, which has, in turn, elevated the function’s importance as a strategic partner.

People analytics leaders cited these top five areas where people analytics adds the most value to their company.

Diversity & Inclusion

People analytics has become a critical partner to the C-Suite, the CHRO, business leaders and diversity & inclusion leaders to provide the data and insights needed to effect change. As Dawn Klinghoffer, our Insight222 Board Advisor and Head of People Analytics at Microsoft, explains in an episode of the Digital HR Leaders Podcast

“Diversity and inclusion is not just a data exercise…we use data first to measure, then to learn, then to take different actions, then to measure again and to learn again, and that is the flywheel that we use.”

Employee Experience/Listening

Business leaders rely on people analytics to provide insights from employee listening data to allow them to make key decisions more frequently on a myriad of topics. These include diversity & inclusion, employee wellbeing, organisational culture and hybrid working.

Retention

The pandemic changed what employees want from work, with record numbers of workers leaving and moving jobs. CEOs look to people analytics leaders to answer questions about the labour market, model scenarios on retaining key talent, identify risk factors with predictive models and evaluate the efficacy of interventions.

Workforce Planning

When done well, workforce planning delivers millions of dollars to the enterprise by predicting where skills and workforce costs will be in the future and how to plan for them in suitable locations while managing existing costs. As companies address skills shortages, the shift towards a skills-based organisation is taking place with a focus on long-term workforce planning, redesign of work and the emphasis on skills for growth.

Talent Acquisition

People analytics delivers value for companies by providing people intelligence that allows them to obtain a competitive edge when sourcing talent. One example where people analytics teams support their organisation to improve the hiring funnel is harnessing internal talent to fill critical roles and skill gaps with efficient internal marketplaces.

C-Suite Decision-making

Given the business topics challenging CEOs today, the CHRO wants the People Analytics leader closer, as a trusted advisor, to help them manage the C-Suite with complex business and people topics.

The percentage of people analytics leaders reporting to the CHRO or CHRO-1, 2020-2022. (Base: n=30). (Source: Insight222 People Analytics Trends 2022 report)

The number of people analytics leaders reporting to the CHRO or the HR leadership team is increasing, thus giving a higher level of accountability and influence for people analytics. Insight222’s research found that 90% of people analytics leaders now report either to the CHRO directly or one level beneath that person. This has increased since 2020.

Gaining insights from senior executives is an important part of ensuring the success of the people analytics function and in creating business impact. Proximity to the CHRO and earning their trust is important in opening doors for access to other C-suite executives and general managers. This, in turn, increases the likelihood of focusing people analytics on the most pressing and important business topics.

At MetLife, the people analytics function has primary responsibility for business topics that are a priority for the CEO, including advancing the organisation’s strategic workforce planning agenda. Laura Shubert, Vice President of People Analytics & Insights at MetLife, reflects that over the last eight years as she has been leading people analytics, the importance level has changed:

“I’ll say that 10 years ago I wouldn’t have been talking to the CEO, but interact with him at least quarterly today. It’s very reflective of what we’ve done at MetLife and how we’ve created impact.”

The Board of Directors as a Key Stakeholder

The board of directors is increasingly important to the people analytics function – now a key stakeholder for most people analytics leaders. Ever since the Securities and Exchange Commission (SEC) made human capital reporting a requirement and other reporting requirements legislation came into effect in various countries, such as gender pay gap reporting in the U.K., the work of people analytics has been elevated to investors and, therefore, the board in new ways.

(Source: Insight222 People Analytics Trends 2022 report)

It is natural, then, to expect many people in analytics teams to work on topics the board requests. Insight222’s research confirms this, with 88% of companies who responded to our survey confirming that in the last 12 months, their people analytics team has been asked to do specific human capital analytics work for the board.

Emerging Data Sources and People Analytics Technologies

People analytics functions have many data sources available to support their work. These sources, and investment in the technologies that enable them, have meant that people analytics teams can increasingly address more complex business problems that stakeholders request.

Second Wave: Analytics Dashboards

Scaling people analytics and enabling the HR function with data-driven skills starts by delivering insights at scale for managers and H.R. professionals. This requires investment in second-wave people analytics technology that could be built in-house or procured from a SaaS-based data democratisation system vendor (for example, Visier, Crunchr and One Model). This is a critical step in building a data-driven HR function, and automating reporting enables the people analytics team to focus on essential business topics. Laura Shubert explains how this progressed at MetLife:

“We began working towards moving our transactional reporting work to an in-house offshoring scenario. Then we started implementing self-service and some automation of reporting, and every time we moved something out, we took responsibility for another topic.”

Third Wave: Specialist People Analytics Technology

Specialist people analytics technologies provide solutions in categories such as assessment analytics, employee listening, employee text analysis, labour and talent market intelligence, relationship analytics and organisational network analysis (ONA), talent management and skills inference, workforce planning and organisational design.

The percentage adoption of collaboration analytics and ONA technologies in 2021 and 2022 (Source: Insight222 People Analytics Trends 2022 report)

Investment in these technologies allows people analytics teams to answer more complex business questions for their organisations. One example is ONA and collaboration analytics, used to understand “real” organisational networks and how employees influence each other. The data is increasingly used as part of companies’ employee listening ecosystems, and the insights are used to inform approaches such as future workplace design. Of the companies surveyed about their technology adoption in Insight222’s research, 48% are using collaboration analytics and ONA technologies – an increase from 39% in 2021. An additional 35% of survey respondents consider investing in at least one of these tools.

Personalised People Analytics

An emerging trend which has contributed to the growth in the importance of people analytics is the focus on personalised people analytics products for employees. These products play an important role in improving opportunities for employees in areas such as career pathing, internal mobility, and learning.

Insight222’s research found that a third of companies who responded to our survey have delivered personalised people analytics products to employees in the last 12 months. And the proportion focused on this in the next 18–24 months is more than double that.

Percentage of companies that deliver, or intend to deliver, personalised products to employees using analytics. (Source: Insight222 People Analytics Trends 2022 report)

Patrick Coolen, Global Head of Workforce Management, Analytics, H.R. Intelligence and Organisational Design, at ABN AMRO Bank N.V. has shared publicly that analytics for

personalisation is a focus area for H.R., and within the people analytics team they have been developing a “vacancy recommendation” product for employees. As Patrick explains, via our personal devices,

“We get a lot of nudges daily trying to help us have a more effective life. What we are trying to do with the same sort of techniques is to make sure that our employees have the best possible career they can by nudging on those topics that are relevant for them.”

Patrick and his team have standards in place when it comes to the ethical use of people data, and partner closely with their compliance and legal colleagues throughout the process

before an analytics solution goes into production. Patrick is clear that,

“We have one key principle as we undertake personalisation: it must be beneficial for the employee. That is the golden rule!”

The Continued Growth of People Analytics

The business world is challenging CEOs, never like before. Rising inflation, geopolitical instability and the long-term changes driven by the pandemic are creating a multitude of complex situations. With the global pandemic and the current economic uncertainties, businesses all over the world need new insights to navigate these human factors: culture, inclusion, mental wellbeing, wage inflation, retention, and skill shortages.

This creates a huge opportunity for people analytics teams to deliver value to the business and is a major driver in the growth in the importance of people analytics. The unprecedented growth of the specialist people analytics technology market means people analytics teams can unlock deeper insights and develop analytics products for employees.

People analytics provides insights that allow the CEO, their executive team, and the board to bring a higher focus on the “social” aspects of ESG (environmental, social and governance) – and therefore help to improve their chosen stakeholders, communities, as well as the world overall.

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