What is People Analytics?
People Analytics is the use of data analysis techniques to first understand and then improve all aspects of human resources management, employee performance, and workforce efficiency.
It is the collection and analysis of employee data to understand and predict patterns and behaviours. By leveraging these insights, businesses can make informed decisions that enhance employee experience, drive performance, and ultimately, improve the bottom line.
One of the best definitions we’ve come across is by Dave Millner, a leading HR analytics consultant:
“People analytics is the systematic analysis of people problems in organisations,
using data-driven methods to improve decision-making and outcomes.”
People Analytics has developed rapidly recently and is now recognised as a vital tool for business leaders and HR professionals.
Why should organisations use People Analytics?
Organisations should use People Analytics to enhance decision-making, improve employee performance and productivity, optimize recruitment processes, and manage talent effectively. By leveraging data-driven insights, companies can identify high performers, understand drivers of employee satisfaction, and implement strategies to increase retention and reduce turnover. Additionally, it contributes to cost efficiency by optimizing workforce planning and resource allocation, and it aids in risk management by identifying potential issues related to employee behaviour and compliance.
Should People Analytics be HR’s responsibility?
The benefits of People Analytics
People Analytics is at the core of the effectiveness and credibility of the HR function. It delivers measurable results by:
Improving employee retention
Identifying and addressing factors that contribute to employee turnover. Organisations can implement strategies to retain top talent by understanding the reasons behind attrition as well as retention.
Understanding why people leave organisations
The cost of losing key talent can be calculated to as much as two years’ salary when you take into account every cost associated with getting an employee into post and up to full performance in the role. Losing valued employees is a business risk – it can lead to losing customers as well as impacting on a team’s performance. Gathering information about why people leave can help the organisation to take steps to mitigate this risk – fix the causes of disengagement and build the factors that encourage people to stay. In addition, it is possible to use predictive analytics to anticipate when someone may be at risk of leaving – a ‘flight risk’ – and take proactive measures to retain them
Understanding why people choose to stay with organisations
There are many factors involved in someone’s choices about where, how and even why they work. Understanding these factors enables organisations to do more of what works and mitigate the factors that cause dissatisfaction. These factors range from salary to welfare and are often most related to how they are treated day-to-day by their managers and colleagues.
Because of the range, number and complexity of factors, it’s wise to consider a mix of survey instruments, e.g. quick pulse surveys alongside larger more comprehensive surveys.
Enhancing employee engagement
Understanding what drives engagement and implementing targeted initiatives is key. Engaged employees are more productive, innovative, and committed to the organisation’s success.
Optimising recruitment
Using data to improve recruitment processes and attract top talent. People Analytics helps identify the most effective recruitment channels and practices.
Driving performance
Providing insights that help improve employee and organisational performance. Organisations can make informed decisions that enhance overall performance by linking people’s data with business outcomes.
People analytics are shaping the future of work
How do I get business leaders interested in People Analytics?
People Analytics is about solving ‘people problems’ and identifying ‘people opportunities’. It enables organisations to predict, anticipate, and proactively manage trends. This is similar to how marketing data is used to predict customer behaviour. For example, if customers begin to leave, the CEO will want to know why.
HR needs to create a similar appetite for talent. High-performing employees are valuable assets. Retaining and attracting the best talent is crucial, and People Analytics provides insights that inform how to make that happen. This powerful data can capture the attention of senior business leaders when positioned as risk management. Just like they don’t want to lose customers, they don’t want to lose talented employees. HR must explain the business impact in financial terms (e.g., the cost of attrition) and outline the steps required to manage this risk. Then, HR can present a similar return on investment analysis to that needed for every other function.
What is the difference between HR Analytics and People Analytics?
Understanding the differences between HR Analytics and People Analytics is crucial in today’s data-driven workplace. While these terms are often used interchangeably, they represent distinct approaches within the broader realm of workforce analytics.
HR analytics
HR analytics traditionally focuses on operational data and metrics related to HR functions. This includes analysing recruitment processes, turnover rates, employee performance, and compliance. The primary aim is to optimise HR operations and support decision-making regarding workforce management. For example, HR Analytics can help identify patterns in employee turnover, enabling the development of retention strategies.
People analytics
People analytics takes a more holistic view, encompassing a broader range of data beyond traditional HR metrics. It integrates information from various sources such as employee engagement surveys, social network analyses, and even external market data. The goal is to understand the entire employee experience and its impact on organisational performance. People Analytics is often leveraged to enhance employee satisfaction, drive productivity, and foster a positive workplace culture.
Both HR Analytics and People Analytics play vital roles in shaping the modern workplace. While HR Analytics provides critical insights into HR processes, People Analytics offers a comprehensive understanding of employee behaviour and its influence on organisational outcomes. As businesses strive to become more data-informed, distinguishing between these two approaches can help in developing targeted strategies that drive both efficiency and employee satisfaction.
What does a People Analytics dashboard look like?
Every dashboard is tailored to the organisation and function so each leader or manager can easily see the date they need. Here’s an example of what a dashboard might include:
- Employee Turnover Rate: Tracking the rate at which employees leave the company.
- Engagement Scores: Measuring how engaged employees are with their work.
- Performance Metrics: Assessing the performance levels of different teams or departments.
- Recruitment Data: Insights into the effectiveness of recruitment strategies.
- Turnover and retention figures: Get an up to the minute view of why people are moving on and see patterns and trends.
A simple dashboard design enhances usability. It allows HR professionals, managers, and executives to grasp key metrics at a glance, facilitating faster decision-making. Overly complex dashboards can obscure critical insights and hinder effective analysis.
Setting up a dashboard initially can look daunting – especially when an organisation is still building the data it needs. However, a real advantage of a dashboard is that it can start simple and evolve.
The importance of simple people analytics dashboards
People Analytics dashboards offer many benefits:
- Data-driven decision making
- Performance monitoring
- Talent management
- Operational efficiency
- Employee engagement and satisfaction
- Diversity and inclusion
- Compliance and risk management
- Strategic planning
- Customised reporting
- Enhanced collaboration
The benefits of People Analytics Dashboards
Why carry out research amongst employees?
Employee surveys and feedback exercises represent a goldmine of information for companies. They are a core element in People Analytics and offer a wealth of benefits:
- Boost engagement: Identify what motivates employees and drives them to succeed.
- Unearth issues: Reveal problems that might have yet to be apparent.
- Plan strategically: Use survey results to make better-informed decisions about future investments, policy changes, and HR strategies.
- Build trust: Show employees that their opinions matter.
- Employee engagement: Stay in tune with how employees feel and are engaged.
Employee Surveying vs People Analytics
Employee surveys are the starting point for People Analytics. They gather opinions and perceptions, crucial for understanding employee attitudes and behaviours. People Analytics takes this further by using the data to quantify the impact on business outcomes and drive decision-making.
Why should organisations research employees’ views frequently?
Researching employees’ views frequently throughout their journey with the organisation is crucial for maintaining a healthy and productive work environment. Gathering feedback at critical touchpoints allows for continuous improvement and ensures that the organisation can address issues promptly and effectively.
Here are some of the essential moments to gather employee feedback:
Before joining
Understanding applicants’ recruitment experiences, whether successful or not, can provide invaluable insights into your hiring process. Asking questions about the clarity of information provided, the timeliness of communication, and the overall experience helps identify areas for improvement. This data is particularly crucial in today’s competitive talent marketplace, where a positive recruitment experience can be a deciding factor for top candidates.
On joining
The onboarding process is critical to the success and retention of new employees. Evaluating this process can highlight areas where recruits may feel supported or need clarification. Early feedback can prevent issues that lead to early turnover and expedite the time it takes for new employees to become productive.
Stayer interviews
Understanding why employees choose to stay with your organisation is as important as knowing why they might leave. Stayer interviews can uncover what employees value most about their work environment and culture. This information can be used to reinforce positive aspects and address any emerging issues before they lead to attrition.
On leaving
Exit surveying or interviewing is an important activity to get right in any organisation. Career Insight is the perfect way to gather opinion and feedback from people who are moving on. We are very experienced in this field and can offer clear help in designing a set of questions, with branching follow up clarifiers, which really get to the truth of why people choose to leave and what factors you can control, to lower turnover.
Pulse surveys
Pulse surveys are short, frequent surveys designed to gauge employee sentiment on various issues. These surveys can be conducted regularly to monitor employee engagement, satisfaction, and the effectiveness of specific initiatives or changes. Pulse surveys provide real-time insights and allow quick adjustments to address concerns.
180° HR and Business alignment – Strategic Roadmap
An Enable-HR ‘Strategic Roadmap’ is a 180° feedback exercise between HR and the stakeholders or internal clients of that service. We ask these two groups how important various attributes and deliverables are and also how effective HR services are in these areas. The comparison of these viewpoints between the two groups, act a powerful discussion starter about the priorities to drive business strategy and goals using the power of your people.
How to create a culture of continuous feedback
How to build a continuous listening strategy
How do you do People Analytics effectively?
Implementing People Analytics effectively involves several key steps, each crucial to deriving actionable insights from data.
Here’s a structured approach to getting started:
Define objectives
Clearly outline what you want to achieve with People Analytics. Setting specific, measurable goals helps focus the analysis and ensures that the insights generated align with the organisation’s strategic priorities.
Collect data
Gather data from various sources, including HR systems, employee surveys, and other business metrics. Integrating data from multiple sources provides a comprehensive view and enables more robust analysis.
Analyse data
Use statistical techniques and software to analyse the data. This step involves identifying patterns, correlations, and trends that can provide insights into employee behaviour and organisational performance.
Generate insights
Translate data into actionable insights. The goal is to turn raw data into meaningful information to inform decision-making. This might involve creating visualisations, reports, and dashboards highlighting key findings.
Implement changes
Use insights to inform HR strategies and business decisions. Implementing changes based on data-driven insights ensures that initiatives are targeted and effective.
Monitor and adjust
Continuously monitor the impact of changes and adjust strategies as needed. Regularly reviewing the outcomes of People Analytics initiatives helps refine approaches and ensure ongoing improvement.
Exploring the different types of People Analytics
How do you ensure People Analytics delivers value?
To maximise the value of People Analytics, it is essential to follow best practices that ensure data-driven insights translate into meaningful action. Here’s how to ensure your People Analytics efforts deliver tangible benefits:
- Ensure People Analytics initiatives are aligned with overall business objectives. This alignment guarantees that the insights generated are relevant and contribute to the organisation’s strategic goals. Involve key stakeholders from the start to gain their support and buy-in. Engaging stakeholders ensures that the insights are acted upon and that there is a shared understanding of the value of People Analytics.
- Share findings and insights clearly and understandably. Effective communication ensures that the insights are accessible and actionable for decision-makers. Use insights to drive meaningful changes and improvements. The ultimate goal of People Analytics is to inform actions that lead to better outcomes for the organisation and its employees.
- Continuously measure the impact of People Analytics initiatives on business outcomes. Regular assessment helps understand the initiatives’ effectiveness and make necessary adjustments.
Supporting clients in People Analytics
Enable-HR International supports clients in various ways, ensuring they can harness the full potential of People Analytics. Here’s how we assist our clients:
- Consulting: Providing expert advice on People Analytics strategies and implementation. Our consultants help clients design and execute analytics initiatives that align with their unique needs and goals.
- Training: Offering training programmes to build internal capabilities in People Analytics. We equip HR professionals with the skills and knowledge to effectively leverage data.
- Technology: Implementing advanced People Analytics tools and platforms. We help clients select and integrate technologies to support their analytics efforts.
- Data Analysis: Conducting in-depth data analysis to generate actionable insights. Our data analysts work closely with clients to uncover patterns and trends that can inform strategic decisions.
A brief history of Employee Research
Companies have been trying to understand and optimise the performance of their employees for a very long time. The first time we see something resembling people analytics is in 1911, with Frederick Taylor’s book “The Principles of Scientific Management.” Taylor introduced the idea of using data and measurement to improve efficiency and productivity, a core concept in people analytics today. So, while the term “people analytics” might not have been used back in 1911, the ideas behind it have influenced business practices for over 100 years.
The early history and background of employee surveys, as we might recognise them, can be traced back to the 1920s and 1930s, mostly in larger-scale industrial enterprises. At that time, companies were becoming increasingly interested in measuring employee morale and engagement and understanding the factors influencing employee satisfaction and productivity. The focus in the early days was, not surprisingly, on productivity and time and task management. Early surveys were often conducted using paper questionnaires or verbal interviews. When feedback started to look for employees’ opinions, they mainly focused on topics such as the perception of working conditions, compensation, and job satisfaction.
Between 1944 and 1947, the increasing awareness of assessment methods around employee attitudes can be ascribed to study and observation undertaken during World War II, which tried to evaluate morale and reproduce high-morale situations. For example, the United States Army Research Branch conducted Soldier Surveys, gathering feedback from over half a million soldiers on areas ranging from meal quality to trust in leadership. In 1940, survey methods included written questionnaires, structured interviews, and informal interviews.
Employee surveys gained popularity in the business world during the 1950s and 1960s. During this time, businesses began to recognise the importance of understanding employee attitudes and opinions and their impact on productivity, morale, and overall business success.
One of the most significant breakthroughs during this period was the introduction of the “climate survey,” which focused on measuring the whole work environment and organisational culture. These surveys were created to assess leadership effectiveness, communication, team dynamics, and work satisfaction and identify areas for development. In addition to climate surveys, the 1950s and 1960s witnessed the advent of employee opinion surveys aimed at obtaining feedback on specific issues or policies. These surveys were often used to evaluate new initiatives or workplace changes and assess their impact on employee satisfaction and engagement.
During the 1970s and 1980s, employee surveys evolved and became more sophisticated. One key development during this period was the emergence of computer-based survey tools, which allowed companies to collect and analyse data more efficiently and effectively. This, in turn, led to the development of more advanced statistical techniques for analysing survey data and the ability to conduct surveys on a larger scale and with greater frequency.
In addition to technological advances, the 1970s and 1980s also saw a shift in the focus of employee surveys. While earlier surveys focused primarily on job satisfaction and organisational climate, surveys during this period began to emphasise employee engagement, empowerment, and work-life balance. This reflected a growing recognition of the importance of these factors in driving employee productivity and retention and the need for companies to create a positive and supportive work environment.
In the 1990s and 2000s, employee surveys became increasingly popular, and technology advanced extensively as computer power, availability, and software development progressed at a rapid pace. As businesses started to recognise the importance of understanding employee attitudes and opinions, tools to gather feedback became available for smaller organisations. They were easier to use, both for organisations and for the employees completing them.
Some key developments during this time include:
- The rise of 360-degree feedback surveys, which gather input from multiple sources to provide a well-rounded view of employee performance.
- Psychometric testing measures employee potential and fit within a company’s culture.
- The increased focus on measuring employee engagement and satisfaction, with surveys like the Gallup Q12 becoming widely adopted.
These tools and techniques laid the groundwork for the data-driven approach to human resources that we call “people analytics” today.
The history of People Analytics
The term “People Analytics” was first used in 2004 by Thomas Davenport in his book “Thinking for a Living: How to Get Better Performance and Results from Knowledge Workers.” In it, he described how organisations can analyse employee-related data to improve performance and efficiency.
Glossary of terms
- HR Analytics: Data analysis focused solely on HR department data.
- People Analytics: Broader data analysis that includes data from across the business.
- Employee Retention: An organisation’s ability to keep employees.
- Employee Engagement: The emotional commitment and level of involvement employees have towards their work, the organisation, and its goals.
- People Analytics Dashboard: An interactive visual tool that pulls together displays workforce data to provide insights into various metrics such as employee performance, engagement, diversity, and retention.
- Employee surveys: Surveys that gather employee opinions and perceptions to help understand attitudes and behaviours.
- Pulse Surveys: Short, frequent surveys to gauge employee sentiment.
- 360-Degree Feedback: Feedback gathered from multiple sources to provide a comprehensive view of employee performance.
- Psychometric Testing: Assessments used to measure employee potential and cultural fit.
- Continuous listening strategy: An approach to employee feedback and engagement measurement that emphasises ongoing, real-time, and frequent data collection and analysis.
Enable-HR International is committed to helping organisations harness the power of People Analytics to drive better HR decision-making and achieve their business goals. Please contact us for more information on how we can support your People Analytics initiatives.
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About George Naylor
George is an experienced practitioner in organisational research with more than 30 years of experience in question inventory design, data analysis, and survey report writing. He is a director at Enable-HR International and has co-developed a profiling system that helps HR professionals drive their professional and career development. George offers innovative ways of researching organisational issues and designing and executing ground-breaking research solutions for clients worldwide.
While technically proficient, George can put himself in employees’ shoes, ensuring that research encourages participation and buy-in from all concerned. His specialisms include employee engagement and retention, and his well-used questions would be “What is the business problem you are trying to solve?” and “What does the data tell us we didn’t know before?”
Along with our talented software engineer, George is responsible for the design and ongoing development of our people analytics secure platform – Career Insight.
A down-to-earth Yorkshireman, he has the knack of using straight language to get to the core of an issue.
