The Role of People Analytics in Supporting People Strategy
As we say here at Insight222, people analytics is not about HR; it is about the business. It is about using data about our human capital to make better decisions that drive business outcomes.
If we look at the trends governing businesses today, we see that some key factors are shaping the future of work: digital transformation and adoption of generative AI, the movement towards skills-based organisations, and a stronger focus on empowering societal change.
These are all trends that revolve around the human element of the workplace. However, to achieve success in these areas, we must fundamentally shift how we manage our people and make decisions about them. This requires a robust people strategy.
But what is a people strategy without evidence-based insights to support it? It would be like a ship without a compass, wandering aimlessly without direction.
Figure 1. People analytics team ratio, 2020–23 (Source: Insight222 Building the People Analytics Ecosystem: Operating Model v2.0)
Over the years, we have found that HR is increasingly recognising the value of people analytics in supporting the people strategy. This is evident in the increasing number of HR leaders investing in data and analytics capabilities, as well as the rise of dedicated people analytics roles within organisations.
But beyond just supporting the people strategy, people analytics plays a critical role in shaping it.
Why People Analytics and People Strategy are Inextricably Linked
People strategy and people analytics are like two sides of the same coin. The people strategy is an organisation's deliberate plan and approach to manage, develop, and engage its workforce. It outlines how the organisation will leverage its people to achieve business objectives.
On the other hand, people analytics involves using data and analytical methods to gain insights into human capital. It helps us understand patterns, trends, and relationships in our workforce that inform decision-making about talent.
Together, these two concepts become a powerful tool for HR leaders as they navigate the complexities of managing their organisation's most valuable asset – their people.
Take, for instance, the case of Chetwood Financial Limited. During the acquisition of another company, Louise Millar, People Director, and Olivia Edwards, Colleague Engagement Lead, sought to implement a people strategy that would align the company's values with the accelerated growth of the organisation. Using people analytics, they leveraged their people insights to inform the decisions around their people strategy, ultimately changing the company values and people initiatives to support them. But as Louise highlighted during her discussion with David Green on the Digital HR Leaders Podcast, "it's the data afterwards that says whether that's been right or wrong, or actually it's taking you in a different direction."
Figure 2. External partnerships will enhance the performance of people analytics and complete the ecosystem (Source: Insight222 Building the People Analytics Ecosystem: Operating Model v2.0)
This is the core role of people analytics in supporting the people strategy. It is what, as we found in our recent Insight222 research, is the bedrock of the People Analytics Ecosystem. The people strategy acts as a thread running through all people analytics activities, ensuring that every insight generated and every action taken is aligned with the strategic goals of the organisation. And it is this alignment that is essential for the effective operation of HR and, ultimately, for the success of the business.
Yes, the people analytics ecosystem should always have an outside-in approach to ensure the business strategy remains at its centre. However, it is also crucial to note that the people strategy should remain the compass for all the activities within the people analytics ecosystem.
The Symbiotic Relationship Between CHRO and People Analytics Leaders
For the unification of the people strategy and people analytics to be effective, there must be a strong partnership between the Chief Human Resources Officer (CHRO) and the People Analytics Leader. Both need to work together to ensure that people data and insights are part of the overall HR decision-making process. The CHRO sets the direction for the people strategy, while the People Analytics Leader brings data and insights to inform that strategy.
Part of our yearly research, here at Insight222, is to observe the characteristics, traits and capabilities of leading companies in people analytics. What we have found from both our 2022 and 2023 People Analytics trends reports is that organisations where these two roles collaborate closely and frequently, often meeting weekly, achieve the greatest business impact. This is particularly notable in what we have identified as "A" Teams - those people analytics teams that invest the most and deliver the greatest impact from their investments in people analytics.
Figure 3. The percentage of people analytics teams with primary responsibility for employee listening, by tenure of the team (Source: Insight222 Building the People Analytics Ecosystem: Operating Model v2.0)
Similarly, this close partnership is also critical in ensuring that the people analytics function is not seen as a separate entity within HR, but rather an integrated part of the overall HR strategy.
Steps to Align People Analytics with People Strategy
So, as a people analytics leader, what steps can you take to ensure that your function is closely aligned with the people strategy? From our years of research, here are a few suggestions:
Communicate frequently and openly with the CHRO to understand their vision for the organisation and how people analytics can support it.
Adopt a consultative approach and work closely with HR and business partners to embed people analytics into the decision-making process.
Use data storytelling to effectively communicate insights and recommendations to stakeholders, including senior leaders.
Take ownership of the HR data literacy upskilling initiatives to ensure that all HR professionals are equipped to understand and use people data.
Productise people analytics insights and deliver them in a user-friendly manner to ensure they are actionable and easily accessible.
Continuously evaluate the impact of people analytics on the overall people strategy and make necessary adjustments as needed.
Essentially, in order to support the people strategy, there needs to be a shift in the people analytics operating model. Of course, this depends on the organisation's maturity in people analytics, but it is critical to move away from a reactive approach to one that is more strategic and aligned with the overall business objectives.
Optimide Your People Analytics with Insight222’s CMS & Advisory
Here at Insight222 we can support you in identifying the right operating model for your organisation by leveraging our tailored program advisory services and personalised Content Management System (CMS). Our advisory program is carefully designed to guide organisations through the complexities of evolving their people analytics practices to align with overarching business objectives.
By fostering a close collaboration with your HR leadership, we help you design and implement a people analytics operating model that is strategic, proactive, and impactful. Our CMS also provides ongoing, dedicated learning support to ensure that your people analytics function not only sustains but continuously improves its contributions to operational success.
So, as you continue to navigate the ever-changing landscape of people analytics, remember that alignment with the people strategy is key to long-term success. And a strong partnership between CHRO and People Analytics Leaders is essential in achieving this alignment. By understanding this symbiotic relationship and implementing key steps, you can ensure that your organisation's most valuable asset – its people – are at the heart of all strategic decisions.
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