CEOs are facing increasingly complex challenges, including geopolitical uncertainty and economic volatility, both now and in recent years. In 2020, the global pandemic happened. The following year, hybrid work became a reality, and in 2022, the “Great Resignation” occurred.

During these years, social justice movements and the war in Ukraine rocked the world, causing social disruption and an energy crisis that triggered an economic downturn in many markets.

These events also meant that the focus on the chief human resources officer (CHRO) at each company became more pronounced. They needed to provide data and insights about the people in their companies, like never before. And as a result, people analytics, as a discipline and function, grew during this time.

Insight222’s People Analytics Trends Report for 2023

Insight222’s People Analytics Trends study for 2023 finds that people analytics continues to grow despite a challenging global economy. Our research has substantially increased in size over the years, and this year is no exception. Over 270 companies provided data for this study.

This is a 47% increase compared to last year. It is also a 400% increase compared to our first study in 2020. The companies in the 2023 report represent 4,800 people analytics practitioners and 16.3 million employees.

Our study this year focused on expanding and validating our work of 2022. We wanted to study Leading Companies in People Analytics and find out which ones measure the financial value of people analytics.

Figure 1. Key findings of the Insight222 People Analytics Trends Report.

For 2023, our key findings are:

Growth: People analytics continues to grow despite a challenging global economy.
Value: Measuring and delivering value, from people analytics efforts, is key for the impact of the function.
Influence: Developing relationships with C-suite and senior stakeholders is essential to deliver on key business priorities.
Impact: There are eight defined characteristics that Leading Companies display to create impact.

Growth

Inflation and economic volatility pose mounting threats to company growth, forcing organisations to adapt. Chief finance officers around the world are raising prices to expand margins and reduce exposure to fixed costs to manage risk. These are their main strategies for dealing with an uncertain economic situation.

Companies are investing in people analytics and expanding their teams, despite cost reduction efforts. This is particularly true for teams in their early stages. Over the last 36 months, from mid-2020 to mid-2023, people analytics functions have grown on average by 43% (see Figure 2). This demonstrates the commitment that global organisations are making to build data-driven cultures in HR and use data to make better informed people decisions.

Download the Insight222 People Analytics Trends Report for 2023 to discover the size of people analytics teams globally, and in the financial services, technology, pharmaceutical and healthcare, and retail and FMCG sectors specifically.

Value

Measuring and delivering value, from people analytics efforts, is key for the impact of the function. Our research found that that there is “a long way to go” for people analytics in delivering measurable financial value. While we know that not all value is measured in financial terms, it is certainly important to have a plan to measure it.

When we studied the 57 companies who measured and declared their financial value more closely, we noticed that there are specific actions that these companies are more likely to take, compared with companies that didn’t measure any commercial value. Two of these findings are outlined below. We find that in the companies that measure commercial value, they:

Meet with key executives in the C-suite more than in those companies that do not measure commercial value.

In particular, the people analytics leader in these 57 companies meets the CEO in 61% of cases, compared with 41% of cases where companies do not measure value.

Focus more on both people and HR strategy and business strategy and C-suite challenges.

These companies focus on both in 84% of cases, compared with 57% of cases where companies do not measure value. This means that they listen to, talk with, and then prioritise topics that are of value both to their business executive leaders and their HR executive colleagues.

Influence

Developing relationships with C-suite and senior stakeholders is essential to deliver on key business priorities. Our research found that in many cases, people analytics teams are working on topics of significant importance, at the highest levels of the organisation.

The fact that 21% of people analytics leaders (that is 57 executives across the companies surveyed) are invited to present to the board of directors at least once a year shows that – for at least these 57 people – there is the opportunity to influence on significant people topics and have the attention of the most important governance body in their organisation.

Figure 4. The percentage of people analytics teams working with senior executive teams and boards of directors. Source: Insight222 People Analytics Trends Report 2023

Additionally, 58% of the people analytics leaders in the companies surveyed have presented to the executive committee (C-suite or ExCo). That means that in 157 companies, the people analytics leader and their team have the ability to influence the senior executive team.

Eden Britt, VP and Global Head of People Analytics and Digital Solutions at Ericsson, was interviewed for this research. He explains it’s when he’s with senior management and listening directly to top executives that he can find ways to influence on all HR topics: “My role is to keep nudging and holding people to account. And being in the room is critical to enabling that to happen.”

When looking at the topic of influence in people analytics, we can conclude that it is critical to have the right person leading the people analytics function – a people analytics leader who can listen to top executives and inform their decision-making effectively.

Impact

Our research over the last two years has found that Leading Companies in People Analytics (“Leading Companies”) exhibit specific characteristics that enable them to deliver more value with people analytics than non-Leading Companies. They create impact with people analytics by focusing on the most important business priorities, ensuring their investments provide a return, and delivering value at scale.

There are eight defined characteristics that Leading Companies display to create impact.

Leading Companies Model

When considered along the dimensions of ‘Investment’ and ‘Value’, this reveals four “states” or “teams” of people analytics. With this research, we can now provide specific details and guidance on how companies can transition between these different “states” of people analytics. 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.

By learning from how Leading Companies create impact across eight characteristics, the Model provides guidance for companies to transition between different “states” of people analytics to deliver more value.

Take the Leading Companies Diagnostic

Overall, our research finds that measuring and delivering value from people analytics efforts is key for the impact of the function.

During economically challenging times, it is perhaps even more important that people analytics teams are supporting the company with business priorities, not just HR priorities, and are able to evidence the value they have delivered through measurable outcomes.

There are eight defining characteristics that Leading Companies in people analytics display. By taking the Leading Companies Diagnostic, every people analytics function, in any organisation, globally, can diagnose themselves against the eight characteristics to understand their current state, and what characteristics are the most important to develop to create more impact.

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, download the Insight222 People Analytics Trends Report for 2023 or take our Leading Companies diagnostic and receive a personalised recommendations report outlining the steps you can take to improve your organisations impact through People Analytics.

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ABOUT THE AUTHOR

Jonathan Ferrar

Jonathan is a globally recognised business advisor, speaker and author in HR strategy and people analytics. Jonathan has worked in corporate business with extensive executive leadership and board advisory experience for almost 15 years with companies like Andersen Consulting (now Accenture) and IBM. He is co-author of Excellence in People Analytics (Kogan Page, July 2021) and The Power of People (Pearson, May 2017). He is a vice chair of the board of the Chartered Institute of Personnel and Development.

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.

Heidi Binder-Matsuo

Heidi joined Insight222 in 2023 with a broad role to develop assets, and advise clients on the value of people analytics. She has a 15+ year analytics career beginning at NASA where she worked on astronaut crew selection and training. She has since worked at Google, Wayfair and Vertex Pharmaceuticals leading people analytics projects, and teams, to create value for C-Suite executives. She was one of the original Googlers on Project Oxygen, a landmark project for the entire global people analytics profession in the late 2000s. Heidi holds a B.S. in Psychology from Santa Clara University and a M.S. in Business Analytics from NYU.

Investing to Deliver Value: A New Model for People Analytics