Human Resource programs no longer need to be based on “soft” reasoning but should be as analytical and data-driven as any other management discipline – Chris Argyris.
Initially and for many years HR was regarded as an errand to ‘hire and fire’ resources, but over the period of time, with the advancements in technology big enterprises are talking about the possibility to apply big data; which would aid them in taking effectual decisions regarding the welfare of their employees and the organisation. For this organizations have started to show interest in analytics and have started to invest in it.
The role of HR consultant has changed. HR is no longer a ‘soft task’ or a ‘people’s person’. The pace at which technological developments are progressing has directed HR professionals to be more business-centric and tech-savvy. Amongst other technological augmentations like Artificial Reality, Virtual Reality, Automation, Gamification, Cloud-based HR systems has had a major impact on HR professionals and has taken the HR world by typhoon transfiguring the way HR operates. With the pervasive adoption of cloud HR systems, more organizations are financing profoundly in programs to use data for all aspects ranging right from manpower planning to people decisions, and operational enhancement.
‘People analytics’ a disciple that had begun as a diminutive technical troop has now been dominating every aspect of the HR discipline. Business ventures are upgrading their technical analytics groups to constitute digitally powered enterprise analytics solutions. These new solutions, whether developed internally or embedded in new digital solutions, are facilitating establishments to perform actual-time analytics at the speck of need in the business process. This acknowledges for an in-depth understanding of the issues and actionable insights for the business. As well stated by Joash Narainsamy, Organisational Wellness Specialist at ICAS Southern Africa “Workplace analytics can give insight into Absence Management, Presenteeism (present but unproductive), Talent Acquisition and Retention, Fatigue and Accident Management, and tell you exactly where your business is bleeding and what to do about.”
Let’s take a look at what is people analytics?
What is People Analytics?
‘People Analytics’ is the process of scrutinizing the available people-related data to measure the efficiency of the HR programs and identify patterns so as to make profound business decisions. In simple words we can say that it is a process that refers to the technique of analytics that uses technology, statistics and proficiency to enormous sets of talent data which helps the management to make effective business decisions for the organisation as well as for their employees thereby having the opportunity to get better return on their investment in the business as well as in the people whom they employ.
The dawn in analytics has helped HR nurture from being people’s person and transactional to systematic, proactive and ahead-of-the-curve. What was earlier basic reporting has now shifted to Business Intelligence tools. A lot of software providers such as Oracle, SAP etc. have proffered the HR analytical tools with their HIRS solutions. This has helped the term People analytics to gain fame.
People Analytics is known as HR Analytics, Talent Analytics or Workforce Analytics. It mostly uses people-related data such as payroll, recruitments and comprises of both business functional data as well as people –related data.
According to Deloitte’s Global Human Capital Trends 2017:
- About 71 percent of companies regard people analytics as a topmost priority in their organizations while 31 percent companies rate it as very important.
- Analytics is applied to a vast array of business operations and the challenges they face where recruitment is considered to be the first and foremost area followed by other areas such as workforce planning, measuring the employee’s performance, compensation benefits and retention.
- Organisational network analysis (ONA) and “interaction analytics” are widely used to study employee behavior in order to detect new prospects for business improvement.
- Willingness remains a grave problem: After discussing this problem for years only 8 per cent organizations stated that they have usable data; while 9 percent believe they have a good understanding of which talent dimensions drive performance in their organizations; and only 15 percent have broadly deployed HR and talent scorecards for line managers.
Different Types of Analytics:
In today’s world enterprises are showing an urge to build an analytics team as the industry has the access to data storage. Business enterprise is now investing more in analytics in order to get the diagnostic ideas about their organization’s wellbeing from the perspective of their employees. In this context, a talent value model can be created by using analytics which can help to address questions like “why do employees desire to stay with the organization? Analytics helps enterprises to identify what their employees like or dislike thereby aid in preparing an analytical model that will augment retention rates, help in planning personalized performance incentives, or decide the right time to proclaim promotions.
According to Gartner’s Business Analytics Maturity Model, four defined types of analytics are broadly used. They are
- Descriptive Analytic
- Diagnostic Analytics
- Predictive Analytics
- Prescriptive Analytics
Just as beams or foundation walls are considered to be the base of a building similarly Descriptive Analytics is considered as the base footing of the business intelligence. It is a primary stage of data processing that forms a synopsis of historical data to supply helpful information and probably prepare the data for further analysis. It mainly focuses on the question ‘what happened’ on issues related to employee turnover, number of openings, time to hire, new hire report etc.
When we do a case study we form a detailed outline of what happened. Just as after we investigate what happened; we then tend to dig deep in order to know why did it happen? Similarly, Diagnostic Analysis focuses on the question why did it happen? It digs right into the depths of the data in order to understand the causes of a particular behavior or event.
For instance: In employee turnover, the diagnostic analysis would help to classify whether the separation was a voluntary one or an involuntary one.
It is characterized by techniques such as data mining, correlation, data discovery etc. It enables you to select potential employees for a position. It unveils meaningful perceptions about talent pools by comparing succession metrics and performance reviews across selected employees.
It is a twig of the advanced analytics and is used to identify and project information about unknown future possibilities and trending events. It comprises of a number of statistical techniques ranging from predictive modeling, machine learning, data mining and artificial intelligence that analyses current data and historical facts to make projections about the future. The outlines found in past and transactional data can be utilized to detect the future risks and opportunities
For instance: While hiring; it helps to identify candidates with a tendency to join or who can be efficacious at the organizations, thus helping the talent acquisition team to fill the position swiftly.
It is a zone of business analytics and it focuses on proposing possible measures to direct towards a solution or a viable outcome. It is associated with both descriptive and predictive analytics. As descriptive analytics seeks to provide insight into what happened predictive analytics aids to predict what might happen. Prescriptive analytics uses artificial intelligence and machine learning to understand the impact of future and aims to provide the best strategies based on those situations, thereby aiding enterprises to mitigate forthcoming risks or suggest best possible options to enterprises to take advantage of the future opportunity.
Prescriptive analytics is used in industries such as travel, oil, and gas, transportation etc.
The best Analytics as a tool
Amongst the above mentioned four analytics, Predictive Analytics can be considered as an astounding tool for business enterprises. The reason for this is that it has the capability to give meaningful perceptions into areas such as talent management, employee benefits, and promotions or helps in predicting information about the unknown future happenings.
For instance: Calculation regarding the efficacy of the training courses can be done with the help of analytics. It can show the effectiveness of performed CSR initiatives by an organization and rank them based on their contribution to corporate culture and employee participation as well as it can determine which employees are likely to achieve their targets.
Several leading business ventures have already given thumbs up to analytics. For example Employee performance data is used by Google to compute suitable interference time to facilitate both high-performing and low-performing employees succeed.
Best Buy is a leader in HR predictive analytics. It can precisely forecast the impact of employee engagement on the performance of its stores. The results obtained through analytics projects that a 0.1% increase in employee engagement leads to a rise of over $100,000 in the annual income of its store.
Areas Where People Analytics Are Used:
The development of people analytics is worldwide and not limited to a particular country. It has its usage within the HR domain and the business framework. The areas of its usage are likely to develop in a diverse way in the nearby coming years. People analytics can be leveraged in several of ways to enhance the functioning of a company. To name a few areas where people analytics are/can be used within the enterprise are talent acquisition i.e. picking up the right applicant in order to minimize bias in hiring, increasing employee engagement, workforce readiness, measuring work culture, employee experience and not to forget employee retention. For instance: Google the tech giant is considered one of the best company to work for. With the use of people analytics, they hire the best applicants and retain them with the highest engagement rate.
However, HR areas such as recruitment, employee retention/turnover, and employee performance are the core areas where analytics can be used and the organization can reap its benefits.
The skills of application stalking procedure have changed the recruitment procedure. The judgment could be bias after interviewing the applicant irrespective how accurately the information pertaining to the applicant is presented. As stated by Sujee Saparamadu Orange HRM CEO in an interview with Better Buys, “When you do small talk before the interview, this leads to subconscious hiring on a confirmation bias. That’s where personality insight comes into the picture.”
In order to curb bias when working through a recruitment process, people analytics can be used as a helpful tool to do the relevant assessments of the applicants. Clarity in terms of data about the candidate’s traits can serve for other comprehensions such as whether the candidate’s behavior and personality traits would be appropriate with the organization’s culture.
Employee Performance is an area where predetermined notions and prejudices are difficult to jiggle. People analytics provides HR the ability to recognize probable fissures amongst employees within a particular department/team, and what training and guidelines are required to compress and seal those fissures.
An in-depth digging into the information will give organizations a gist of who will be a high and low performer amongst the freshly hired applicants. This will help managers empathize; how to effectively get involved and encourage employees in order to enhance the overall progress of the organization.
The use of people analytics helps to identify the ratio of employee retention. By collecting several data and penetrating deep into the available information, an enterprise can observe employee’s behavior and ascertain the behaviors of employees who are about to leave/are leaving the company against employees who are loyal to the company.
Just as business determines what drives consumers buying decisions similarly such type of understanding lets HR get a fair idea as to what is the reason that makes an employee leave an organization and vice-versa. Rather than banking on gut feeling it is far much better to bank on insights that are proof based. This will help HR to make effective decisions to enhance employee retention.
Modern Tools offer Profound Understandings to Drive Performance
Stakeholders like CEO’s and board of directors are interested in knowing their return on investment for the money that they have invested in people and the business. Since HR teams are unable to deliver insightful and actionable information; thus analytics is moving from a focal point from HR to business itself.
- Prominent and well-known ERP vendors such as SAP, Oracle etc. constitute a set of people analytics control panels that are accessible to the CEO, in order to assist senior leaders to understand hiring metrics, employee cost, and attrition.
- In healthcare industry which has large chains of outlets labor cost and retention are considered to be the most intimidating challenges. Use of people analytics will help COOs of healthcare organizations to see their employees as a valuable asset that can be evaluated and improved to benefit individuals and company as a whole. It focuses on how to enhance talent focused programs and also increases employee satisfaction.
- People analytics can be used to boost the sales performance of a company. It helps the sales team to create a complete sales model which uses the data to find the cause and effects that will enable the sales team to project and diagnose a problem. This will help them to decide appropriate training program that needs to be provided to their sales teams thereby enhancing their sales productivity. It prevents them from hiring inappropriate candidates.
- The retail industry has now started to use business and people analytics to spot employee and consumer traffic patterns. Use of such analytics helps operation head of retail industries to identify new geographic areas where their salespeople should be placed in order to bring about awareness of their brand and augment total consumer purchase.
HR technology vendors use predictive analytic tools in order to provide analysis on data regarding recruitment, performance, employee mobility, and other factors. With analytics and artificial intelligence coming together companies have got the opportunity to get detailed informative view; regarding the management and operational problems thereby providing an aid to companies to improve their operational performance.
- ERP vendors have made it possible to provide data-driven tools that can aid in projecting patterns of fraud, displays actual correlations between training and engagement, conduct organizational network analysis, and even evaluate employee patterns for time management steered by calendar data and email.
- Recruiting the right talent through video interview has become possible with the help of artificial intelligence software; that can evaluate and provide analysis of the candidate’s personality and honesty.
- Payroll tools are now available that can analyze labor on an hourly basis and can instantly identify overtime and other forms of payroll that helps to enhance practices in personnel management.
- Software vendors such as Oracle, SAP etc. have been successful to implement Retention models that have made it easy for management to understand the attrition rate and the reasons for it and how they could cut down on the attrition rate as well. Companies are now taking keen interest at the human performance data, the travel data etc. in order to enhance its employee’s wellness, give a boost to their energy level as thereby increasing the functioning of the business
The latest solutions are more of business-driven that is they are not only HR focused but also focus on other segments such as finance, operations etc. of business. In fact, these new solutions are forcing the HR department to move from the traditional data to a modernized people-driven data for an extensive scope of problems related to business.
The shift in HR’s Role:
People analytics has emerged and developed from a technical specialist group to a serious business function. Analytic of huge data has become more of a business function rather than limiting it only to HR.
Some of the enterprises prefer to place this function in HR only while there are a few other enterprises that have this function across all other segments of business apart from HR only. The best example is the Ford Company which has extended the people analytics function to work across all segments of the business, including Operations, Finance, and HR.
The analytics has shifted from pull to push. Analytic teams do not focus on building models and doing the project but they also develop dashboards and control panels that help managers and employees to see pertinent data in actual time. Just as social media which was once seen as a platform to stay connected with different people across the globe as well as make new friends has now emerged as a platform for businesses to gain recognition amongst vast population; the same is with people analytics. Business enterprises are implementing analytics and are taking it to the core of their business so as to utilize it to plan effective business strategy. However, success in analytics will require dedication, constant investment and a prolonged time.
Is the scope of people analytics limited to HR?
The answer to this question is NO. With the modern world being surrounded by a digitalized environment, detonating automation and millions of statistical and analytical demographics, organizations are now on a quest for ways to innovate and train their workforce for the future of work. Moreover, people analytics comprises of people-driven data and business data. This gives innovative insights which further provide assistance to the management to take effectual decision thereby; aiding the organization to grow in a healthy and progressive way. So, people analytics should be a collective accountability with other business leaders.
7 steps to creating successful people analytics program
- Seek aid from business trailblazer: The function (People analytics) should be capable enough to provide global support and not just mere technical analysis. It should be fit enough to identify right problems that pop in during the business processes. For this one should seek help and support from stakeholders, IT resources, senior executives and not to forget business trailblazers.
- Establish a powerful analytics team: Success of People Analytics relies on and comprises teams across all segments of business such as finance, HR etc. and data traversing the functions. It is important to build and establish a strong, closely knit multi-functional expertise team that is proficient with the data calculations, data visualization, institutional knowledge and advisory skills so that the team develops as the enterprise’s Analytics Team.
- Gather reliable data-driven HR: Accurate data is the foundation of all analytic practices. The accuracy of the analyses depends upon how good data is fed into the software. One has to invest in money, time and execution of actionable insights that are drawn from analytics in order to get the best out of people analytics. What step needs to be taken is something that is very essential to decide upon once the organizations discover the causes of the problem through the evaluation process obtained from the statistical data. Appropriate steps should be taken to make sure that data quality is a part of every analytics conversation. Avoid using irrelevant data as it leads to an interpretation of wrong conclusions and creates data turbulence.
- Enhance Analytics fluency: In order to choose a right to follow up the action, it is very important that one is intelligent enough to understand and interpret complicated data. For this it is necessary that enterprises implements and provides training on data governance programs that would provide training in terms of implementation of standard tools, standardization of reports and dashboards etc. and prepare a cluster of important managers and knowledgeable HR’s stakeholders.
- Develop a roadmap for investment in analytics programs: Develop an analytics investment roadmap for a wide rainbow of analytics. Investments should be endeavored at constituting a new business operation for the organization and not merely a technical team within HR.
- Emphasize on actions and not merely findings: To add value to people analytics program the analytics team should be capable enough to understand the root cause of the problem from the provided information and thereby provide the best and appropriate solution to the problem.
- Create Data plan: People analytics banks on the bisection of data from business operations, HR and outer sources. So, it is necessary to establish a data plan in order to align/amalgamate the organized and unorganized data from both in-house as well as outer sources.
Benefits of people analytics:
- Strengthen Decision Making: People analytics gives you the opportunity of collecting information from vast sources of data that help in making effective decisions. When it comes to making decisions traditional HR was subjective. With the introduction of people analytics subjective decision making has come to an end. People analytics gives you statistical data which helps to you understand where the problem is and make effective decisions to curtail the problem.
- Enhances Retention: Losing an existing employee can be pricier for an organization rather than hiring a new applicant. People analytics helps you to enhance employee retention. As mentioned above predictive modeling is useful and plays an important role in the future. Predictive analytics helps the management to know which employees are about to leave/are leaving the organization. With this information on hand, they can take proactive steps to retain the employee and encourage them to stay on with the organization.
- Drives accountability: Data presentation is a vital part of people analytics calculation. Accepting people analytics means accepting a world of easy, pertinent data visualization. Such statistical data is easily interpretable and can be understood in the context of strategic business goals. This clarity boosts accountability, as employees take control of the data.
Accountable employees perform better and are considered to be more of business assets. Finding ways to drive accountability has been the biggest challenge and people analytics has let accountable employees to meet that challenge
- Increases Employee Satisfaction: Employee engagement has been a major issue in HR. Contented employees are more productive, well-organized and more faithful to the organization they work with. People analytics can have a good impact on employee satisfaction. With the use of People Analytics management can get an idea about how employees feel about working in their current organization.
- Hire Better people: One of the biggest benefits of people analytics is the ability to hire better and suitable candidates for a given position. People analytics helps you to develop a predictive evaluation for performance on the basis of the current top performers of the organizations. Organisations can use this knowledge while evaluating applicants to make sure they hire those applicants that are most likely to perform within their business.
- Saves time: From sourcing to hiring and training to nurturing the talent is a time-consuming activity and all the time and efforts go in vain in wrong placements. With the use of people analytics, employers get an idea about which people and programs are worth their time and which are not. As a result, people analytics gives you additional time to spend on the things that direct business-driven results.
6 Trends In People Analytics:
David Green, Global Director, People Analytics Solutions at IBM. He has identified 6 main trends in people analytics and their impact on the future of work at HR tech world. They are
Making People analytics fragment of the corporate DNA:
An organization that is looking forward to developing something sustainable then People analytics requires being scaled across all other business segments apart from HR in order to make it a fragment of the organizational DNA. This will let organizations reap the benefits in long.
Some common necessities to create supportable organizational competence include the need to:
- Kindle, train, furnish and then offer on-going support to HR stakeholders and the widespread HR community.
- Affiliate with leading analytics specialists and stakeholders within the business establishments. Identify sharp and shrewd analysts’ players and have your focus on challenges faced in business operations rather than limiting the focus to the challenges faced by HR only.
- Have a clear mindset about the business as in stakeholders should be clear as to when to begin the project and which team would be leading the project.
- Have an open discussion with the managers with respect to the calculations of the effects and consequences of the project that are undertaken through the people analytics function.
- Regularly enhance and sharpen the abilities of the people analytics squad specifically focusing on aspects of data analysis techniques, storytelling and business recommendations and advises.
- Organisations must keep themselves upgraded with the latest updates in terms of the advancements in technology, in-house and outside data sources, confidentiality regulation and analytical equipment.
Accepting novel and evolving data sources
Stakeholders and consultants have to be continuously upgraded and be prepared to accept the advancements in technology, internal and external data sources and the tools required for the evaluation process. The new and evolving data sources fall into two groups. Firstly, the prevailing data sources that have yet not been conventionally used in people analytics such as social media and other such collaboration platforms. Enterprises are now also commencing to evaluate the data stored in emails (Email metadata) so as to gain an understanding in terms of output, teamwork, and affiliations. For example, Microsoft a multinational tech company is using analytics on data stored in emails to aid their employees and teams to become more productive simultaneously putting employee trust at the core of their business.
Advancement in technology has been so wide with innovations as now even wearable tech gadgets and radars are available and widely used to encourage people analytics. For example, Randy Knaflic (VP HR and HR Analytics at Jawbone a technology company headquartered in San Francisco) spoke about an analytics project conducted at the organization (Jawbone) that analyzed employee sleep patterns in a short preliminary new product launch event. The analytics projected in its analysis that the sleep patterns were agitated. This analysis facilitated the management of Jawbone to carry out an initiative where employees have furnished the privilege of an add-on holiday right away subsequent to the product launch event.
Innovative ways to evaluate and synchronize data
The data sources obtained through people analytics advances and multiply; similarly, does it happen with the technology and the devices available to evaluate it. Major data utilized by people analysts has been structured and organized but much of the data has been unstructured and unorganized especially those that are supplied through novel / evolving sources. These mainly include text, hypothetical images, audios, and videos. Fortunately, with the rapid advancement in technology, even unstructured data can be effortlessly evaluated providing a surplus of insights. This calls stakeholder for the need to stay upgraded and enhance their proficiencies.
They should be capable enough to get the most out of new technology to empower quicker and better data incorporation, analysis and visualization. Similarly, people analysts should progressively be able to balance data by handing over the data in appropriate teams in the business so that the business can function smoothly and the managers are able to provide guidance towards employee development thereby enhancing employees to move a step ahead in the career and performance.
Empowering the consumerization of HR
Companies that have invested in people analytics are in an appropriate situation to develop personalized services to improve the experience of employees. People Analytics teams at big organizations like Cisco, IBM etc. have managed to build interactive machine learning tools that customize areas such as career advancements, employee mobility and learning as well as on-boarding for employees. Engagement is another aspect, where people analytics function is making an effort to foster employee listening ability. This will help the organization to understand the sentiments of their employees as well as work on it. This brings in a dual opportunity for improvement, like I. It improves business performance and II. It enhances employees’ welfare.
Sculpting the modern enterprise:
People analytics has changed HR’s approach from merely having a traditional approach of focusing on the individual towards the modern approach of focusing on teams. The admixture of people analytics and organizational network analysis has been a perfect blend as they reveal an understanding of how teams perform while working together in a corporate culture. Focusing on improving team performance will not only move things faster but will also reap better benefits rather than focusing on the improvement of individual performance. People analytics not only plays a vital role in sculpting the modern enterprise but also aids in the constitution of the employees required to assist it – like abilities vs. employments and individuals vs. mechanisms.
Morals, faith, and confidentiality:
Concerns about data ethics and privacy have been the top challenge for people analytics leaders. Data morals and confidentiality is not only challenging subject but is also a complex one. What seems ‘spine-chilling’ to some may seem ‘casual’ for others. Legally, companies operate in multiple domains so there are higher chances for them to encounter miscellaneous laws, procedures, and approaches to data privacy and security.
Many people analytics work closely with their legal consultants before commencing on a project. People analytics is about people and the management cannot let anything go haywire. Employee transparency and trust has to be taken into consideration and put at the core of the business. Customising duties for employees will help organizations to take better authority of their careers, progress their welfare and deliver a better employee engagement experience.
Concluding reflections – the path to widespread adoption
A lot of the organizations have to still constitute decent and reliable people analytics functions. Those enterprises who have are fuelling ahead and these organisations have not restricted the functioning of people analytics only to the HR domain; but have extend people analytics function to work across all segments of business including finance, HR and business operations so as to reap the benefit of the function’s powerful impact on the business performance. Besides facilitating better business outcomes people analytics aids the management to understand how to deal with its employees and enhance their productivity and their overall performance.
People analytics is set to be a nucleus element of the future of HR and those enterprises that put employee belief and confidentiality at the midpoint of their endeavors will eventually be the ones that reap most value. It’s geared up to be an electrifying road head.