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Seven Characteristics of Leading Companies That Impact Business Value Through People Analytics

What are Leading Companies doing differently with people analytics to impact more business value? We often hear this question from CHROs and senior HR executives looking to add greater business value to their organisations with people analytics. As a result, Insight222 focused its People Analytics Trends research this year on investigating what “the best of the best” in people analytics are doing. These organisations are called “Leading Companies” and the aim of this year’s research was to identify key characteristics that allow them to deliver more value and create more impact in their businesses, than others.

What Are Leading Companies?

The simplest definition of a Leading Company are those companies that practice “best in class” people analytics. They invest in their stakeholders and prioritise the most important business topics as much as they invest in their own teams and function. They measure the impact of their work on their organisation and its workforce and focus on scaling the people analytics products they develop. And they actively enable HR business partners (HRBPs) to be more data-driven. In short, Leading Companies in People Analytics focus on impacting business value.

How do they achieve this?

The Insight222 People Analytics Trends 2022 research found that Leading Companies undertake three common practices to build their functions and serve their stakeholders.

Figure 1.1

They do this by:

  • Investing in stakeholders and teams

  • Measuring the financial impact of people analytics solutions

  • Scaling people analytics across the enterprise

Across the 184 companies surveyed in our research, we discovered substantial growth in team size from 1:4000 in 2020 to 1:2900 in 2021, which has held strong in 2022. This illustrates 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.

This shows that of the companies surveyed, 65% indicated that they increased their team size in the previous 12 months, compared to 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 as they strive to become or remain leading companies.

Seven Characteristics of Leading Companies 

When analysing Leading Companies' ability to invest, measure and scale, our research indicates seven common characteristics that enable them to deliver more business impact to their organisations with people analytics. Additionally, to be a true leader in the field, Leading Companies are active in the industry helping others become successful. They share their stories in articles, present at conferences, and agree to be case studies in vendor documents or books.

Figure 2. The seven characteristics of Leading Companies in People Analytics. The percentage indicates the number of positive responses from companies that answered questions related to the seven characteristics. Base: Leading Companies: n=8; non-Leading Companies: n=176.

1. The People Analytics Leader Actively Influences the C-suite Through Their Close Reporting Relationship With the CHRO

Our research indicates that people analytics is operating at the top of organisations regularly. In all Leading Companies, the People Analytics leader reports to either the CHRO or one level beneath that person. They also personally interact on a weekly, monthly or quarterly basis directly with C-suite executives. In these companies, working with senior stakeholders, such as the CEO, the CFO, other senior finance executives and General Managers of business lines, is an integral part of the activities of the people analytics leader. Working with these senior stakeholders will influence the speed and adoption of people analytics products and solutions into the workplace.

2. The People Analytics Function Undertakes Advanced Analytics on the Most Important Business Priorities

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 permanently changed employee expectations of work. Differentiators in attracting and retaining talent now include flexible working, employer commitments to well-being and employees’ experience of diversity, equity, inclusion and belonging (DEIB) in the workplace. The CEO and the CHRO subsequently need a much deeper understanding of their workforces than ever before - and in an evidence-based fashion. They turn to their people analytics leaders for the insights needed to manage these topics. In Leading Companies, the people analytics leader works directly with their CEO, helping them explain insights to employees and determine the most important course of action.

3. The People Analytics Leader Invests in Each of Three Key Skills: People Analytics Consultants, Data Scientists, and Behavioural Scientists

The ratio of the people analytics team to total employee headcount for Leading Companies in 2022 is 1:2300 compared with 1:2900 for all companies. Furthermore, Leading Companies invest progressively year on year. The ratio for Leading Companies has strengthened in 2022 from 1:2500 in 2021.

There has been clear investment in three skills across leading companies to maximise the business impact of their people analytics work:

People Analytics Consultants 

People Analytics Consultants partner with business and HR stakeholders to understand, prioritise and translate the business strategy and challenges into hypotheses that can be tackled by the people analytics team.

Data scientists 

Data scientists combine scientific and statistical methods, processes and algorithms to extract insights from vast amounts of data.

Behavioural scientists 

Behavioural scientists apply expertise in the study of human behaviour to the workplace in areas such as candidate assessment, surveying, inclusion and employee experience.

Leading Companies invest in each of these three skills 100% of the time. However, non-Leading Companies only have all of those three skills 20% of the time.

4. The People Analytics Function Measures and Deliver Financial Value From People Analytics Activities

People analytics teams in Leading Companies will evaluate a project before it is undertaken to avoid costly mistakes or projects with low return on investment. They will, in turn, monitor projects in progress to assess if they are driving the desired business value. All Leading Companies aim to deliver tangible financial outcomes with people analytics and 100% of them have calculated the financial value of at least one people analytics solution in the last 12 months.

5. The People Analytics Function Democratises Data to Managers and Executives Across the Enterprise

The People Analytics functions in all Leading Companies share data interactively with managers and executives across the enterprise. Leading Companies focus on building capability in product management and change management to a much greater extent than all companies. This shows their desire to make their solutions and predictions effective by making “analytical products” for employees, managers and executives as necessary, through embedding analytics into the people processes across the company. Leading Companies also invest in technology that supports the democratisation of data and the productisation of people analytics solutions.

6. The People Analytics Function Has a Strong Focus on Personalised People Analytics Products For Employees

An emerging trend in people analytics, particularly across Leading Companies, 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. All Leading Companies are focused on delivering personalised products to employees in the next 18-24 months. Leading Companies embrace the "fair exchange of value"; if employees are communicated to about "how" they will benefit from the use of their data, it is likely that they will agree to share it. They believe transparent communication is key. Our research highlights that in all Leading Companies, the people analytics team has a strong working knowledge of ethics related to the use of people data. People analytics executives at Leading Companies recognise that people analytics and ethics go hand in hand. 

7. The CHRO Makes It Clear That Data and Analytics Are an Essential Part of the HR Strategy, and HR Business Partners Are Developing Their Data Literacy

Overall, 100% of CHROs in Leading Companies have made it clear that data and analytics are an essential part of the HR strategy and leaders have listened. From this mindset, HR Business Partners are expected to use people data and analytics in their daily work. And business leaders and CEOs are open and receptive to the suggestions made from the analytics. With intention and action over a multi-year journey, Leading Companies have built a data-driven culture for people data and analytics. 

How to Become a Leading Company Using People Analytics

All Leading Companies have a data-driven culture for people data and analytics. They measure the financial impact of people analytics, demonstrating the clear value it brings to the organisation. Leading Companies have all had a people analytics team in place for over two years, with 63% having had the function in place for over ten years. As Leading Companies continue to evolve, they invest progressively in people analytics year-on-year.  

To follow in the path of what the best are doing in people analytics, the next step is to get informed. You can learn more about our findings in our recent research. By beginning the process of adding the same characteristics that leading companies use, you allow yourself new channels for business growth and opportunities that will increasingly enable your people analytics team to make a tangible impact on business value.


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