The Growing Importance Of People Analytics In HR

A few things we can predict for the future of people analytics

People analytics is the data-driven analysis of people within an organization. Think of it like psychology mixed with Google Analytics. It provides a massive overview of the impact that employees make, and the conditions that need to be set in order for them to maximize their effort and potential.

HR professionals use people analytics to make employee-based decisions. They make note of data like employee processes, procedures, how they function, what they find challenging, and of course, what they excel at. All of this data is compiled so that the best people-based decisions can be made within the organization, all of which should be aimed at growth and development for the individual and the organization.

All of this being said, a lot of people find it hard to understand why this process is detrimental to the success of a company. To some extent, I think everyone can understand the need to keep this sort of information on people, but how does it play out in the long run? Why do you need to implement people analytics and strive to improve your process in doing so? Let’s talk about it.

We’ve already determined that people analytics is the data collected by HR professionals so that they can make more informed people decisions. For some people, that makes sense. For others, it’s still a little vague.

What are “People decisions”, and what are the benefits of using people analytics to make them? Glad you asked. In actuality, there are five main benefits to discuss, all of which contribute to the ever-growing importance of people analytics.

1. The use of people analytics helps organizations translate raw data into action. In turn, this helps employ evidence-based practices that can help enhance the organization’s overall strategy.

2. According to Mckinsey & Company, organizations can increase recruiting efficiency by up to 80% and decrease attrition rates by 50% by analyzing hiring data and aiming to improve recruitment processes based on their findings.

3. By implementing people analytics, you can build a better and much more efficient internal communication strategy. Understanding how people function and how they prefer to communicate is a core value of people analytics. It just so happens that those are also core values of internal communication. By building one, you have a foundation to build the other.

4. People analytics have actually helped organizations save money. An example of this is using that data to predict turnover and to optimize workforce planning. IBM used an AI armed with this data to help predict when colleagues were about to quit. Because they did their homework and properly executed people analytics, the program was 95% accurate.

5. Last, but most certainly not least, people analytics help close skills gaps. This data gives HR insight into the current skills, the potential future skills that they can develop, and by default, the bridge to get from A to B in any given employee. This way, HR and managers can build a fast track to help that employee, as well as others, develop within the company based on what the company needs.

People analytics have led companies and individuals to do great things, but it’s only just getting started. As time goes on, and this practice is refined over and over again, new processes will surface, allowing HR, and therefore organizations, to be a lot more accurate with their analysis.

Based on the information above, there are a few things that we can predict for the future of people analytics.
 

Using people analytics, talent analytics will allow HR teams to identify future leaders, and help nurture them to their fullest potential.

If you weren’t convinced of the growing importance of people analytics in HR before, I hope this sheds some insight into why you need to implement it. As time goes on and processes become more refined, people analytics will be an unavoidable part of people-based decision-making.

My advice would be to find a solution that can help you sort this out now. If you’re fortunate enough to have an in-house HR analyst, you will have a myriad of options at your disposal. That being said, make sure the solution fits the needs of your company.