The Top Five Areas Where People Analytics Adds Value
With the growing awareness of people analytics and how it delivers actionable value to their organisations, business leaders are turning their attention to implementing it into the most profitable departments of their company. Understandably, there is a desire to gain the most return on investment from team members within the business. To accomplish this, it is essential to know where people analytics contributes the highest value and focus energy in that direction.
What Are the Common Challenges for People Analytics?
There is a lot of excitement around people analytics within HR processes and what it can do for businesses. But just knowing about people analytics is only the start. Before beginning any process, it is essential to be aware of the barriers that can stand in the way of making any real progress.
Eliciting Business Challenges From Stakeholders
For the best chance of success, the business reason for undertaking any specific analytics project should be communicated clearly to all stakeholders. Thus, there is an understanding of “why” the exercise is being explored and allows management to investigate throughly. This prevents the wrong analysis from being done or inaccurate information from being sought out. Drafting well-defined and clearly framed business questions can ensure that the analytics work is actually necessary and that your business is capitalising on human resource management.
Prioritising Projects
There is the danger that a project that is taken on can provide no business value or be the pet project of a C-suite. To manage various business challenges, a company may be facing and the onslaught of requests from multiple stakeholders, the people analytics team needs to focus on project prioritisation. By looking into the business impact and complexity aspect of the project, they can determine and focus on only those exercises with the most significant benefits, ensuring a higher chance of success.
Scaling People Analytics Products Across the Enterprise to Impact Business Value
You could be just spinning your wheels in the sand without the means to make notable changes from people analytics that help the company. As Dawn Klinghoffer, head of People Analytics at Microsoft, says:
“In its simplest form, people analytics requires good data, solid analyses, and effective processes. But to make a difference to employees and the business, people analytics must be scaled. Like most things, the value of analytics is limited unless people - employees, managers, and executives - actually use it.”
So, instead of taking a white-glove approach and only addressing the concerns of a handful of often very senior executives, people analytics should start to scale products to meet the needs of many more stakeholders across the business.
The Five Areas Where People Analytics Adds the Most Value
As revealed in our 2022 People Analytics Trends report, businesses and HR face a complex labour market today that has shifted over the last few years. Before the pandemic and social unrest, companies contended with worry over employee benefits and employee handbooks. Labour and skills shortages, tight competition, and mental well-being have since become more pressing issues in the post-pandemic workplace.
With people analytics, many of these problems can be attended to and generate significant progress, all focusing on five key areas.
Diversity and Inclusion
Companies with a higher racial and ethnic diversity are 35% more likely to see higher financial returns than their counterparts with less variety in their industry. That’s why people analytics has become a critical partner to the C-suite, the CHRO, business, and DEIB leaders. They can provide the data and real insights needed to effect change, inspiring action in DEIB.
Leading Companies have invested in hiring behavioural scientists as part of their people analytics teams to measure culture and organisational behavioural. These individuals use scientific approaches to understand employee sentiment and test suitable interventions the organisation can make to improve their diversity and inclusion in psychological safety, belonging, and fairness.
Employee Experience/Employee Listening
With the Great Resignation, employers’ eyes were opened to the needs of employees. It was no longer a “do what I say and like it” environment. Employees had options, and they now wanted to work for a place that:
Provides career growth opportunities
Shows recognition
Develops a healthy work/life balance
Shares in their values and beliefs
Overall, employees wanted a tangible organisational culture to produce a positive experience in the workplace. So, to offer this, business leaders rely on insights from employee listening data to give them a better “feel” of the organisation. They wanted and needed to make key decisions more frequently on many topics that pure demographic data would not provide.
A recent study by Insight222 found that in the 69% of organisations where people analytics is responsible for employee listening, the company has a clearly defined employee listening strategy. In comparison, where people analytics is not responsible for employee listening, only 43% have a clearly defined employee listening strategy. This is interesting when coupled with the 2021 People Analytics Trends report showing that 45% of companies surveyed found that Employee Listening is the area where people analytics adds the most value, up from 15% in 2020.
Retention
As a record number of workers are leaving or changing jobs, with nearly 4.2 million as reported by the US Bureau of Labour Statistics and even more globally, employee retention has jumped to the top of the list in priorities and value to employers. CEOs look to people analytics leaders to answer questions about the labour market or what key competitors are doing with their talent.
Recruitment costs are rising. Having strategies in place that help keep the workforce happy and returning day by day saves on the price tag of replacement. With no sign of the labour market changing anytime soon, people analytics can also offer model scenarios on the retention of key people, identify risk factors with predictive models and evaluate the efficacy of interventions.
Workforce Planning
When done well, workforce planning delivers real value and millions of dollars to the enterprise by predicting where skills and workforce costs will be in the future. Workforce planning also allows the business to plan ahead and manage existing costs.
Workforce planning is an analytical exercise that requires joint ownership between HR and other business and functional experts. Of the 184 organisations that responded to our survey, 53% have people analytics leaders with primary responsibility for workforce planning.
Talent Acquisition
Given the critical focus on skills and retention, talent acquisition is another key area where people analytics has an instrumental influence. People analytics teams can support their organisations by improving the “hiring funnel”. They can advise on ways to streamline the process from application to interviewing techniques and give insight into policies that could discourage talent from applying for roles such as job postings and job requirements needed.
They can do all this by using data, analytics, and behavioural science to evaluate fairness in assessment and selection and balance that with hiring at the right pace to absorb people in the right locations.
How Do Leading Companies Doing Invest in Their People Analytics?
100% of leading companies who responded to our 2022 People Analytics Trends research stated they have a data-driven culture for people data and analytics. They do this by measuring the financial impact of people, which demonstrates the clear value it brings to organisations. Leading companies have had a people analytics team in place for over two years, with 63% having had the function in business for over ten years. Even though these teams are mature, leading companies continue investing in people analytics year-on-year.
Additionally, 100% of Leading Companies now have the people analytics consultant role in their team. The position is key to allowing people analytics teams to focus on the most critical business topics and provide the most significant value to the organisation. As the business topics for people analytics become more complex, ongoing investment in skills and governance is also required to meet this demand.
BUILD A STRATEGIC ROADMAP FOR BUSINESS VALUE WITH INSIGHT222 CONSULTING
Insight222® Consulting use their deep People Analytics expertise to provide HR Leaders with support they need to build and execute their strategic roadmap to drive business value. They work with some of the most mature People Analytics functions as well as those companies just starting their journey with people data, to develop a strategic roadmap for your people analytics function with a clear case for change based on business value. Expertise leads everything they do and whilst they create time, space and structure that’s expected from excellent consultants, they will always bring leading practice to the discussion. To discuss your consulting needs in more depth contact Insight222® today