The Top Three Areas Where People Analytics Adds Value
As the people analytics function continues to evolve, it is vital for teams to create tangible business impact in order to deliver more value and gain further investment and buy in from the business. Many organisations face a number of key challenges when trying to achieve this:
Eliciting business challenges from stakeholders. The business reason for undertaking a specific analytics exercise must be crystal clear and understood upfront to avoid undertaking the wrong analysis and also to give the project the best chance of success. A well-defined and clearly framed business question ensures that the analytics work is actually necessary.
Prioritising projects. To manage various business challenges and requests from multiple stakeholders, the people analytics team must focus on project prioritisation. This can be done by focusing on two aspects: business impact and complexity.
Scaling people analytics products across the enterprise. 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 really 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.” Instead of taking a white-glove approach, 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.
Whilst these challenges are by no means straightforward and easy to solve, tackling them will lead to people analytics creating more business impact. Our recent research shows that leading companies, who are addressing these challenges, are increasingly delivering value against business areas, more often than against HR areas.
These findings show that leading people analytics teams are adopting an outside-in view, prioritising the needs of the business first and foremost, as opposed to an inside-out view, conducting HR analytics for HR’s sake alone.
Let’s look at the top three areas where people analytics adds value in more detail:
Business & Strategy
Employee experience and wellbeing
Strategic workforce planning
Business & Strategy
In our research, we categorised the following elements under the number one value-driver of people analytics, ‘business and strategy’: sales effectiveness, business strategy execution, risk, compliance and crisis management and culture development.
Let’s look at a couple of these elements in more detail.
Organisational culture is defined as the underlying beliefs, assumptions, values and ways of interacting, that contribute to the unique social and psychological environment of an organisation. In essence company culture has everything to do with how employees, prospective employees, customers, and the public perceive your organisation and what makes it unique. Culture has a lot to do with the sales, profits, recruiting efforts and employee morale, and is therefore critical to business success. For example, it is reported that 48% of employees will leave a job due to poor organisational culture and climate.
People analytics projects can be deployed to understand and measure company culture in four key ways:
Engagement surveys
Culture surveys
Climate surveys
Pulse checks
Interested in learning more about prioritising your People Analytics projects? Take a look at our online People Analytics certifications on myHRfuture
2020 has had its fair share of crises. Government crisis management has been criticised as too slow, too complacent, too late, too chaotic and not transparent enough in the full glare of the media. People analytics can help organisations avoid the same criticism, by helping organisations to focus on a people-first response to Covid-19 and other crises. At Rabobank, for example, the people analytics team quickly set up a formal communication loop between the organisation and employees. Within 24 hours, the gathered feedback was converted into insights and advice for crisis teams to design new interventions.
Employee experience and wellbeing
Employee experience (EX) and people analytics were listed as the two most important trends for HR in 2020, according to LinkedIn Talent Trends research. These top two trends are areas of the business that can greatly support each other. Volker Jacobs, co-founder and CEO of TI People, an EX company, says ‘I’m looking at [people] analytics and employee experience as siblings. I’d say analytics is the firstborn.’ Measurement of experiences, through survey data and employee listening, is the big value that people analytics brings to the EX space. ‘As a younger brother or sister, EX can give back by helping analytics teams to actually close the feedback loop’ says Volker.
For example, at IBM the HR department was overhauled with AI and people analytics to drive a more personalised employee experience – from learning and upskilling to career mobility. Getting a handle on skills data across the organisation is no mean feat. At IBM, after a multi-year project, the team was able to bring this data together into one single platform to drive a seamless career development experience.
The importance of adopting an outside-in view, as opposed to an inside-out view is critical in the arena of employee experience and people analytics. Research from TI people showed that although the majority of professionals might assume that HR has ownership for employee experience, in actual fact the majority of critical touchpoints driving employee engagement are owned by line managers. People analytics teams, and HR more broadly, have to work closely with the business to scale impactful solutions that benefit every member of the workforce.
Strategic Workforce Planning
Strategic workforce planning (SWP) presents a huge opportunity for HR as a function to deliver real value and insight to the business – by providing them with a holistic view of their workforce including the skills present within the organisation and an understanding of how the talent strategy aligns to the business strategy.
According to our research into a new operating model for People Analytics, it would seem that strategic workforce planning and people analytics are becoming more aligned, with two thirds of people analytics teams stating they take responsibility for SWP. Taking a data-driven approach to people planning and organisation design is imperative, Rupert Morrison CEO of Concentra Analytics highlights in our course on Data-Driven Organisation Design and Workforce Planning that companies that invest in operational workforce planning are more likely to grow their bottom line at a factor of 2x greater than those that do not.
In order to succeed, however, SWP teams need to have joint ownership of the process with the business. RJ Milnor, former VP of Workforce Planning & Analytics at McKesson, spoke about how both SWP and people analytics together can deliver business value, but only when a close partnership has been established between HR and the business.
As the people analytics function continues to evolve, it is imperative that the team remain laser-focused on delivering business value. In our latest research, we present a new operating model for people analytics that helps teams do just that, by organising their team along a value chain that starts with client drivers and ends with business outcomes.
To learn more, download the full report here.
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ABOUT THE AUTHOR
Caroline Styr is the Research Director at Insight222. She is a thought-leader, researcher and writer on people analytics and the future of HR. Prior to joining Insight222, she worked at the Center for the Future of Work where she was an advisor and in-demand speaker on topics related to the future of work. She has also held roles in digital services and transformation consulting at Cognizant. Contact Caroline at caroline.styr@insight222.com