Leveraging data to understand, anticipate, and act on workforce trends is the future of a successful Human Resource (HR) strategy. It is an indispensable tool, providing actionable intelligence that not only shapes HR strategy but also impacts the broader organisational decision-making process.

As Dawn Klinghoffer, Global Head of People Analytics at Microsoft and a Board Advisor at Insight 222, shares with David Green, in their recent conversation on the Digital HR Leaders podcast

"What I've seen in the last couple of years is that the reliance on people analytics has never been stronger. I think that that really started during the pandemic because obviously everything was about employees, but it hasn't really dissipated."

Insight222's 2023 People Analytics Trends research' Investing to Deliver Value: A New Model for People Analytics' illuminates this shift, noting a significant 43% increase in the size of people analytics functions between 2020-2023. This comes as no surprise, as the same report reveals that 70% of companies surveyed have harnessed the power of analytics to enhance workforce experiences.

These findings allude back to Insight222's 2022 research, 'Impacting Business Value: Leading Companies in People Analytics,' which found that people analytics add the most value to the following five areas:

DEIB (Diversity, Equity, Inclusion, and Belonging)
Employee Listening
Retention
Workforce Planning
Talent Acquisition

So, let's look at how you can use analytics to enhance decision-making within these critical areas of HR.

DEIB (Diversity, Equity, Inclusion, and Belonging): Going Beyond Numbers

Diversity, equity, inclusion, and belonging (DEIB) have long been focal points in talent management conversations. But in a world increasingly attuned to social justice and equity, HR analytics is becoming the barometer by which organisations measure and improve their commitment to DEIB.

The application of advanced HR analytics ventures past traditional diversity metrics, allowing organisations to dissect and understand various layers of inclusion and belonging within their workplace. This deeper dive is crucial not only for identifying representation but also for gauging the emotional and cultural fabric of the organisation.

In the words of Ivori Johnson, Director of Diversity, Equity, Inclusion and Belonging at Charthop: "In order to see the true gaps and disparities across different diversity dimensions, but also just across the organisation, from different department levels, we have to be able to use the data to really help build a foundation of what's actually happening. Then we can add in the qualitative data and any anecdotal data to just really understand what the true picture is."

Organisational network analysis is a shining example of this. By visualising the social interactions and connections between employees, it tells a story about who is conversing with whom, who is central to information flow, and which voices might be marginalised. This information is crucial in identifying and bridging gaps in the internal networks, clarifying where efforts to foster inclusivity and belonging are most needed. Moreover, incorporating these analytics into performance evaluations ensures objectivity and fairness, mitigating unconscious biases that may influence decision-making.

When analytics are employed in tandem to assess performance and understand employees' workplace experiences, organisations create a comprehensive approach to cultivating a workplace where diversity is celebrated, inclusivity is embedded in culture, and a heartfelt sense of belonging is the norm for all employees.

Employee Listening: Hearing Beyond What's Said

Traditional survey methods are giving way to advanced analytics. Employee engagement surveys, while useful, often capture only a snapshot of employee sentiment. This can often result in the missed nuances of job satisfaction, employee engagement and company culture.

The future's HR leaders, however, are increasingly leveraging advanced analytics techniques, such as text and voice sentiment analysis, to listen more deeply and authentically to their employees' experiences.

Sarah Johnson, Vice President of Enterprise Surveys and Workforce Analytics at Perceptyx, highlights the importance of using text analysis in survey data:

"To just read the comments is not going to give you a tenth of the insight you could pull out of it...But it's really more interesting what is in the comment. What is the employee identifying as the way forward? So we are starting to look at programming around unstructured comment analysis using NLP to search all of these patterns within the text data and start to form the themes organically from the comments that people read."

By employing these innovative approaches, organisations can analyse qualitative data from various communication channels - meeting transcripts, performance reviews, and even email and intranet conversations.

Of course, you need to think about the ethical implications of gathering this data. However, these rich, unstructured data sources are mined to reveal the subtext and context that traditional methods might overlook. And when integrated with other business data, sentiment analysis can uncover previously hidden issues that profoundly impact the workplace.

Organisations can, for instance, discern patterns correlating negative sentiment with specific working conditions or pinpoint how certain management practices influence overall engagement. This holistic view enables leaders to enact tailored, targeted interventions designed to address the root causes of discontent rather than just the symptoms. As a result, businesses that utilise advanced employee listening techniques are better informed and more capable of fostering a positive, productive, and engaged workforce.

Retention: Keeping Your Top Talent Through Predictive Insights

In a fiercely competitive talent market, retaining high-performing employees is not just beneficial, it's critical to an organisation's success. As such, HR professionals are increasingly turning to predictive analytics to identify flight risks and intervene before it's too late.

Acting as a crystal ball, predictive analytics gives foresight into which employees may be considering an exit. These are based on sophisticated algorithms that analyse patterns based on many factors, including: job satisfaction scores, absenteeism rates, frequency of role changes, and market compensation trends.

Predictive analytics empowers HR professionals to not just react to turnover but to anticipate it and engage meaningfully with at-risk employees. It shifts the paradigm from a one-size-fits-all approach to a strategy of personalised employee engagement, where interventions are not mere fixes but strategic moves to build loyalty and enhance job satisfaction among key talent.

Workforce Planning: Projections Based on Prescient Data

"We've all experienced, this disruption, this change, what we're seeing in terms of the workforce changing, the workplace changing, the work changing... We've seen the changes in where and how people work, this hybrid, flexible working, they're not necessarily in the office 9.00am to 5.00pm, Monday to Friday. The new employment models and the flexible staffing, the gig economy, which I talked about, which not all of these are necessarily challenges and remain in those challenges, they also open up opportunities... they certainly have an impact in terms of how we workforce plan, what our workforce plan should look like, how we incorporate these concepts into our thinking, our planning, and ultimately our action taken at the end of it. ", shares Alex Browne, Head of People Analytics Innovation and Data Science at Nestlé.

As the workforce continues to evolve and adapt to changing workplace dynamics, the ability to adapt and pivot according to market demands is foundational to any thriving enterprise.

By harnessing predictive data, organisations can forecast talent needs, identify skill gaps, and foster workforce agility - ensuring the right people are in the right roles at the right times. Matched with the analysis of internal talent and external labour markets, companies precisely understand current competencies and areas that require investment.

It is here that a data-driven approach enables HR leaders to prioritise upskilling, reskilling, and talent acquisition strategies that align with future business objectives and evolving industry landscapes. This can be especially helpful as we move towards the skills-based approach to strategic workforce planning.

We highly recommend you listen to this episode of the Digital HR Leaders podcast for more practical insights into how you can model Johnson & Johnson's approach towards a skills-based workforce.

Talent Acquisition: The New Science of Identifying and Attracting the Right Talent

If we think back to traditional talent acquisition methods, it was often a process of trial and error. Companies would post job openings, receive applications, interview candidates, and then decide based on gut instinct or limited data points.

However, today's technology has opened up a new world of possibilities for HR professionals. It has transformed it into a science of precision. By examining vast data sets, HR professionals can distil the shared attributes of successful employees, which in turn sharpens job descriptions and selection criteria.

This analysis can encompass performance metrics, competency evaluations, and even behavioural assessments, all linking back to tangible organisational outcomes. With empirical evidence of what makes an employee excel in a specific role, businesses can craft job postings that resonate with any applicant and the ideal candidate. The one best-suited to thrive in that position and contribute significantly to the company's objectives.

Analytics in talent acquisition allows for faster, more accurate hiring decisions and ensures that organisations attract the right talent for their unique needs. In essence, it helps reduce the risk of a bad hire, saving time and resources in the long run.

For a more in-depth exploration of how analytics and talent intelligence can enhance decision-making in talent acquisition, listen to the following podcast episode: How Analytics, Data and Technology are Shaping the Future of Recruitment

Decisions That Transform the Employee Experience

As we conclude this deep dive into HR analytics, one thing is clear - this is not a mere fad but a fundamental shift in HR's operations. Organisations that deploy analytics will make smarter, faster, and more innovative decisions that will ultimately enhance the workforce experience and create more impactful business outcomes.

By tapping into the power of data, HR professionals and leaders can move from reactive to proactive, from generic to personalised, and from subjective to objective. The insights gained through analytics give HR leaders the strategic empowerment to drive real change within their organisations.

It's time for HR to fully embrace the power of analytics and unlock its potential to inform, engage, and empower the workforce. For those still on the fence, the question is not if we should adopt HR analytics but how soon we can start. The future of work is happening now, and the time for data-driven HR decisions is now.

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