The current climate is challenging all chief executive officers (CEOs), even those with decades of experience. Rising inflation, geopolitical instability and the long-term changes driven by the pandemic are creating a multitude of complex situations. As businesses manage these situations, the C-suite are hungry for data and insights to ensure they make the right “next move”.

Human resources (HR) sits right at the centre of this, with the global pandemic having already shone a spotlight on the chief human resources officer (CHRO). As organisations settle on the “new normal”, they are now facing a multitude of options to drive the right culture, create inclusive organisations and transform skills to tackle market opportunities while also managing challenging human topics such as hybrid work, mental wellbeing, wage inflation, and retention.

C-suite executives and their board colleagues discuss a myriad of human capital factors as a regular part of their business agenda. And with that, there is a clear appetite to use analytics and data to support them in making decisions.

So, it is no surprise that people analytics continues to be important as a discipline. It was not a “flash in the pan” activity to cope with the global pandemic. People analytics is here to stay – and the leaders of these functions now need to influence to a broader range of stakeholders, given the topics at stake.

This year, Insight222 has undertaken its biggest quantitative research yet on people analytics. The main part of the research was to understand what “the best of the best” are doing. These organisations are called “Leading Companies” and the aim was to identify key characteristics that allow them to deliver more value and create more impact in their businesses, than others. In addition the research studied the importance of people analytics as a function, the influence of the people analytics leader, specialist people analytics technologies, personalised products and the ethical needs that must be considered to deliver value.

The Insight222 People Analytics Trends 2022 research is based on survey responses from people analytics leaders in 184 global companies gathered in June and July 2022 together with a number of in-depth structured interviews. Most of these companies are household names with international reach. They are collectively responsible for over 15 million workers operating in over 180 countries. The key findings of the research are shown in Figure 1 and each is described in more detail below.

Leading Companies in People Analytics Display Seven Key Characteristics

From our research, we see that Leading Companies differentiate themselves by intentionally investing, measuring and scaling people analytics (see Figure 2).

The research further identified seven key characteristics that Leading Companies share, which have enabled them to deliver more value to their organizations. These characteristics show how leading companies are investing in their stakeholders and team, measuring the financial impact of people analytics solutions and scaling people analytics across the enterprise (see Figure 3).

Additionally, to be a leader in the field, and not a follower, we highlight that Leading Companies must be active in the industry at large in helping others become successful. This is often done through a variety of methods, including sharing their stories in articles, presenting at conferences, and being a case study for others.

People Analytics as a Discipline Has Grown in Importance

Across all 184 companies that responded to our survey in this research we see that the growth of people analytics teams from 2020 to 2021 has been maintained in 2022. In 2021 the ratio strengthened to 1:2900 from 1:4000 in 2020 – and it remains at 1:2900 for 2022 (see Figure 4). This means that in a company of 100,000 employees, the people analytics team size is, on average, 34 in 2022 and 2021, compared with 25 in 2020.

If we look at the ratio of people analytics teams to employee headcount for companies that have completed the survey in each of the last three years — the most comparable data — we see it has improved. For these thirty companies, the ratio has moved from 1:4100 (2020) to 1:3100 (2021) and then to 1:2800 in 2022.

Additionally, in 2022, 65% of companies surveyed indicated that they increased their team size in the previous 12 months, compared to 61% in 2021 and 55% in 2020. This growth is expected to continue as 68% of companies predict their team size to increase in the next 18-24 months. 

All of these data show that investment in the discipline was not just because of the pandemic, but a strategic business decision that is expected to continue. Our research shows that there is clear intention and action of the CHROs in building a data-driven culture in HR and delivering value to the business leveraging the expertise and skills that people analytics bring.

People Analytics Leaders Have Expanded Their Range of Influence

People analytics leaders are gaining more influence across the top of organisations, with 21% of leaders reporting directly to the CHRO, compared to 13% in 2021.

Additionally, as the focus for human topics increases, many people analytics leaders are interacting on a regular basis with C-suite executives and the board.

Of companies surveyed, 88% have worked on topics requested by the board of directors this past year. For leading companies it is even higher — 100%. Their influence is higher, as those people analytics leaders work more closely with the CEO, CFO and key senior line of business executives in very intentional and regular ways.

Aliaksei (“Alex”) Nekrakha, Director of Compensation and People Analytics at EPAM Systems, Inc. (“EPAM”), who was interviewed as part of this research, explained something that many others outlined. That is, that people analytics is growing really fast. One of his differentiators for driving high-quality business decisions is meeting with and getting input from the CEO. He explains, “The CEO would like to be reminded and understand better what new reports we produce, what analytics we have and what new insights we found. He wants to understand what we have discovered that could help the business more.”

Final Thoughts

In conclusion, the Insight222 People Analytics Trends 2022 study shows that people analytics is growing, becoming more important and gaining greater influence. To be successful and follow the path of Leading Companies, people analytics leaders will need to invest, measure and scale their operations. If they do this, they will be able to deliver more value, create more impact and help their organisations succeed in today’s complex business world.

For more details on this research and to read recommendations on how to deliver more value to organisations, download the Insight222 People Analytics Trends 2022 report.

ABOUT THE AUTHORS

Jonathan Ferrar is the Chief Executive Officer of Insight222, and the vice-chair of the board of trustees for the CIPD. He is a co-author of Excellence in People Analytics (Kogan Page, July 2021) and The Power of People (Pearson, May 2017) and speaks, writes and advises regularly on people analytics and HR strategy.

Naomi Verghese is currently the Managing Director for the Insight222 People Analytics Program®. This program develops the knowledge and skills of people analytics leaders and their teams to increase value, impact and focus through learning, networking and advisory solutions. Prior to joining Insight222, Naomi developed and led the people analytics consulting team at Barclays Bank Plc. She has also held roles as an HR business partner and in reward management.

Nerea González is an experienced consultant having worked in professional services for PwC and Aon for over five years, prior to joining Insight222 in 2022. She has consulted with global clients in the manufacturing, retail, consumer goods, pharmaceutical and financial services sectors, amongst others, and in a number of functional areas such as human resources, finance and M&A.