People analytics work that leads to a clear return on investment excites senior business leaders. It also provides the climate to elevate the function and create more investment. Leading Companies in people analytics measure the financial impact of the team's solutions. However, not every people analytics project is about financial return – people analytics creates impact and delivers value for business performance, workforce experiences, analytics culture and societal benefits.

So, what do we mean by the 'value' of people analytics work? Why is it important? And why should we have metrics to measure the value of different people analytics projects?

What Do We Mean By 'Value'?

The most important aspect of people analytics is the real outcomes it delivers that support the organisation's goals. Impactful people analytics creates value, and for example this value can be delivered as:

• Business outcomes (financial, strategic objectives, risk management or otherwise) 

• Workforce experiences for employees, workers and managers (employee experience, creating a diverse workforce)

Additionally, creating a culture of analytics is an essential output so that the ideas, practice and discipline of people analytics become part of the day-to-day work of the human resources function, HR professionals and managers.

What Can We Learn From Leading Companies?

"Leading Companies" are those companies or organisations that have demonstrated a people analytics function that is considered a leader in the field. Leading Companies invest, develop, measure and scale people analytics more than other companies.

A characteristic of Leading Companies is that the people analytics function measures and delivers financial value from people analytics activities.

As a result, they can evidence and communicate the financial value that the people analytics function contributes to the organisation. Examples of people analytics activities include strategic workforce planning, supporting mergers and acquisitions (M&A), sales effectiveness, risk and compliance, crisis management and culture.

In an episode of the Digital HR Leaders Podcast, Aashish Sharma, VP of Workforce Intelligence at Raytheon Technologies, discusses the strategic role he and his team played during the merger process between United Technologies and Raytheon:

"We were a strategic advisor and a consultant in the M&A work and the integration work. I was part of the core team. We pulled together consolidated data to be able to respond and help the organisation facilitate a number of organisational design activities, location and workforce impact activities."

What Business Priorities Do People Analytics Teams Support?

Over the last three years, strategic business topics have become defined by global people events. The twin crises of the global COVID-19 pandemic and racial inequality have changed employee expectations of work, including flexible working, employer commitments to well-being and employees' experience of diversity, equity, inclusion and belonging (DEIB). 

Furthermore, PwC's 26th Annual CEO survey found that CEOs are having to cut costs in response to global economic decline. Labour/skills shortages and technology disruption are two of the biggest challenges to long-term industry profitability.

Insight222's research finds that people analytics teams are focused on these global societal and economic challenges. During June and July 2023, Insight222 surveyed people analytics leaders from 271 global companies as part of our forthcoming People Analytics Trends Research for 2023. One of the questions asked was: What are the business priorities in your organisation that people analytics is supporting in 2023?

The results show that people analytics teams are supporting their companies with business priorities across a number of these societal and economic challenges, in particular with DEIB initiatives and employee retention efforts.

What Are the Value Outcomes of People Analytics?

Supporting business priorities delivers value for the organisation. For people analytics, there are four broad categories of outcomes where people analytics creates impact and delivers results. These were featured in Jonathan Ferrar and David Green's book. Excellence in People Analytics: How to use workforce data to create business value, published in 2021.

Four Outcomes of People Analytics

People analytics activities should make a difference to the experiences of the people in their workforce, build a culture of people analytics across the enterprise and focus on more complex societal and cultural topics. The most advanced people analytics teams work with business executives as well as HR executives. They focus on the most strategically and operationally important people topics in the business. They productise solutions, scale them across the company and then embed them into business operations.

In an episode of the Digital HR Leaders Podcast, Phil Wilburn, Vice President of People Analytics at Workday, emphasises the importance of people analytics professionals understanding the business:

"It's hard to know where you provide value without knowing the business; do you know how your business makes money; do you know about their customers; do you know about the drivers in the business; do you know how they do their planning cycle; do you know how they continuously engage their customers? All of those things help make HR people analytics insights more applicable; it focuses on the outcomes."

Why Measure the Value That People Analytics Supports?

The four outcomes of people analytics show that value can be measured in many ways, not just financial. Whether financial or non-financial, measuring the value of people analytics projects is important for many reasons. Showcasing the impact and return on investment to stakeholders helps to address:

• Improve value to the company

• Identify areas for further improvement and optimise processes

• Elevate the importance of the people analytics function (create a data driven culture)

• Expand the evidence-based culture in HR – and hold HR accountable for "value", not just "action/experience."

How Can a People Analytics Team Deliver More Value?

Through the course of our Insight222 research – and the work of Insight222 in general – chief human resources officers, senior HR executives and people analytics leaders often ask the following questions:

1. How do I know how good my people analytics team is at the moment? And what should I expect from them?

2. What should I do first to deliver more value

Whatever the starting point of the people analytics team, there are always opportunities to create more business impact and deliver more value as the company and strategy evolves.

The Insight222 People Analytics Trends Report for 2023 will explore these questions in detail. This forthcoming research will provide specific details and guidance on how companies can transition between different "states" of people analytics.

We do not see this as a "maturity model", which implies that a function can only mature to the next level if it has been through the immediate prior level. Instead, we identify these states as ABCD Teams. Each of these teams has particular characteristics, and each provides the platform to transition to a more impactful level.

To find out how to maximise opportunities to influence with people analytics and the steps you can take to drive greater value for your organisation, register for our Insight222 People Analytics Trends Report for 2023.

ABOUT THE AUTHOR

Naomi Verghese

Naomi is an experienced business professional with over 15 years’ experience, mainly in the financial services industry. She has undertaken roles as a HR business partner, HR chief of staff and as a commercial banker during her time at Barclays Bank. In the last six years Naomi has dedicated her career to people analytics, with particular expertise in consulting with business executives, HR leaders and other stakeholders. Naomi took a career break in the mid 2010s to travel around South America to learn Spanish and immerse herself in the Latin American culture. In her spare time, she loves to watch professional athletics, having once been a junior national athlete herself. She currently lives in the UK.

Pre-register For Our Insight222 People Analytics Trends 2023 Report For Early Access

In our latest research, the Insight222 People Analytics Trends 2023 report, we delve into the evolving landscape of people analytics, drawing insights from over 270 companies, representing 4,800 practitioners and 16.3 million employees. Discover our Leading Companies Model that will empower people analytics to deliver greater value to the organisation.

Pre-register for our Insight222 People Analytics Trends 2023 report to learn how to invest and deliver business value through people analytics. Gain early access on Oct. 31st 2023!