People analytics is one of the most promising aspects of employee management. With the advent of modern technologies that can capture every aspect of employee management, we have large databases in our hands that can be used to improve the HR management process. Utilizing data effectively translates to enhanced efficiency, increased employee engagement, improved job satisfaction, and more, as the data is gathered from the employees and their daily routines.
The importance of people analytics has risen in recent years due to the dynamic nature of the job market and the change in overall employee mindset. Hence, we have developed this guide to help you get started with people analytics by helping you understand its numerous aspects.
What is People Analytics?
People Analytics is the process of collating and classifying data generated by employees and the organization and interpreting it to collect actionable insights and utilize it to improve business growth and efficiency.
With the help of people analytics, companies can use the data generated by their employees themselves to understand them better. They can gather in-depth insights into employee behaviour, aspirations, job satisfaction, engagement, and other vital information. Once the HR team gets hold of this data, they can make crucial changes to their organization to ensure organizational growth by improving the positive factors and curbing the negative ones.
Components of People Analytics
People analytics is vital to the smooth functioning of modern organizations since data has become the currency of the digital world. It is essential to understand the major components of people analytics if you are planning to identify and implement various people management strategies to improve your organizational growth.
The main components of people analytics are:
1. Data
The most important component of any kind of analytics is the data and, in this case, we are referring to the data collected from the employees of the organization. For example, HRs can easily gather data such as the demographics of the employees, the attrition details, hiring and performance details, etc. By utilizing this data effectively, HR teams can identify patterns and transform their businesses through steady growth.
2. Analytics
Once the data is collected, HRs are required to analyse the data to gather in-depth insights into employee information and understand the organizational pulse. Hence, analytics is another major component of people analytics, which helps the HR teams to identify key information hidden in the data collected from their staff.
3. Insights
Finally, we have the insights component, which enables the HR department to utilize the data and the analytics effectively. With HRMS software being as accessible as it is currently, gathering insights has become extremely easy, since you can generate reports and graphs in a few clicks. They can even easily share this information with external stakeholders for maximum effectiveness.
5 Types of People Analytics
There are 5 major types of people analytics, which answer different queries that the HR department has, regarding their employees. Based on these types you can decide which type of people analytics is suitable for different kinds of situations, providing you with the right data.
The 5 common types of people analytics are:
➔ Predictive Analytics
Predictive Analytics deals with ‘what can happen’ within the organization. Hence, it is used to forecast future trends within the company and predict outcomes of organizational developments. With this data, the HR teams identify any issues that may pop up in the future and take corrective measures to avoid them.
➔ Diagnostic Analytics
Diagnostic Analytics deals with ‘why did it happen’ in an organization. It is used to understand why a certain event occurred and identify the factors leading to its happening. If the event is positive, the HR team can use diagnostic analytics to replicate the key factors and ensure that the event repeats itself.
➔ Descriptive Analytics
Descriptive Analytics deals with the question ‘what happened’ in the organization. It deals with understanding what already happened, helping the HR teams understand historical data, and enabling them to identify the exact steps which occurred during an event or in a scenario. It also helps them understand the key components of the event or scenario, which is beneficial in comprehending what went right and what went wrong during the event.
➔ Prescriptive Analytics
Prescriptive Analytics deals with ‘what can you do’ to accomplish your organizational goals or resolve issues within the organization. It helps the HR teams to understand the steps they should take to accomplish organizational goals or avoid issues. With prescriptive analytics, the HR department can identify different factors which will help in accomplishing the business goals successfully.
➔ Cognitive Analytics
Cognitive Analytics is about efficiency as it tackles the query ‘how can it be done better’. It helps in improving company processes by identifying the weak points and opportunities for increasing efficiency. The HR team can use cognitive analytics to break down processes into their most basic aspects and build it up from the ground keeping efficiency in mind.
Benefits of People Analytics
There are various benefits of utilizing people analytics effectively in your organization. These benefits range from simple incremental improvements in operational efficiency to rebuilding of employer brand. Hence, if you plan to implement people analytics within your organization, you should be aware of the various benefits provided by it.
Hence, we are sharing the various benefits of people analytics:
1. Make Data-driven Decisions
The most important benefit of people analytics is that it enables you to make data-driven decisions. By utilizing organizational data effectively, the HR teams can help the management make decisions based on it rather than instinct, resulting in better organization. Similarly, it can also help them avoid unconscious bias, enabling a better employer brand.
2. Develop Organizational Strategies with HR
People analytics also helps the HR in aligning the organizational strategies with people growth, resulting in engaged employees. It helps them understand what their employees are looking for in terms of career growth and job satisfaction. Using this data, they can devise talent development strategies, which align with the business goals, leading to increased engagement.
3. Optimize Organizational Performance
With employee data and people analytics, HRs can understand how well their organization is undertaking its tasks. It helps them gather in-depth insights into performance management factors such as individual workloads, workplace risks, collaboration efficiency, etc. Having this data helps them comprehend the opportunities for improving workforce performance, and develop plans that specifically target the weak points, resulting in increased organizational performance.
4. Save Time and Money
With increased efficiency, organizations can also save time and money. Having in-depth insights into the organizational operations enables the management to understand where they can save money. It also helps them understand for which operations they can spend more money while curbing money on other expenses which is not yielding as much results.
5. Avoid Skill Gaps
Skill gaps can have major issues with organizational efficiency and overall performance. However, with the help of people analytics, organizations can close these skills gaps as they understand their staff’s skills and the skill requirements of the business. Similarly, it also helps identify whether to recruit more employees or upskill the current ones to get the maximum performance out of their workforce.
6. Reduce Employee Attrition
People analytics also helps you understand the attrition levels and the factors leading to it within your organization. It can help the HR team in making necessary changes to retain their staff, resulting in increased organizational performance. Long-term staff can also collaborate with each other effectively, further improving the performance of the company.
7. Improve Hiring Rate
Similarly, a company that utilizes people analytics can also understand how to develop their overall employer brand. It enables them to cater to their employee needs and ensure prolonged retention. It also helps them find and recruit better talent since talented staff members would want to be a part of an organization where they feel valued, while also being provided numerous growth opportunities.
Getting Started with People Analytics
Now that we have defined people analytics and its various aspects, let us understand how to get started with people analytics. While we are sharing a robust list of concepts to help you get started, do keep in mind that this list is not comprehensive. We are sharing this list to simply act as a guide to enabling people analytics in your organization.
➔ Develop a Data-driven Mindset
The most basic step in getting started with people analytics is to develop a data-driven mindset. However, it is easier said than done as it requires one to keep an open mind for learning and understanding newer technologies, as well as appreciate the power of information and data.
➔ Develop People Analytics Skillset
The next major step is to develop a people analytics skillset by understanding the terminologies used and how they impact your business. You should gather external inputs if required, and understand the process of data gathering, generating reports, and deciphering meaningful inferences from it. Similarly, you should also help the company leaders analyze the data to develop strategies for a better workforce.
➔ Begin with Spreadsheets
Since data is the primary focus of people analytics, you should start with spreadsheets. While it may not be able to provide in-depth analytics functions related to the workforce, it can be an entry point into people analytics. Many spreadsheet programs like Microsoft Excel, OpenOffice Calc, etc. provide advanced options for cleaning data, sorting it, as well as generating reports from it.
➔ Experiment with Sample Data
Since you are new to the process, it is advisable to start with a sample data set. Sample data sets provide you with the freedom to experiment without impacting your actual workload, resulting in an overall better understanding of the people analytics process. It also helps you understand the time taken in analytics, which will help you optimize the process to your requirements.
➔ Understand Business Better
Another major step in people analytics is to understand the overall working of your business as it helps you understand the organizational goals, and the resources required to fulfil those goals within the pre-defined timeframe. The data and reports generated via people analytics should ultimately enable you to accomplish these tasks, hence, it is essential to understand the various factors associated with it.
Strategies for Effective People Analytics
Various factors influence the success of people analytics, including the strategies used to undertake it. Hence, it is essential to understand these strategies and utilize them effectively while developing people analytics.
Some of the best strategies for ensuring the effectiveness of people analytics are:
1. Review Data Sources
Since data is the backbone of analytics, you should ensure that the data being collated is accurate. Hence, it is essential to review the data sources and identify any gaps in the data collection process. Having foolproof data collection methods ensures that the authenticity of the data is maintained while it is collected, maintained, and extrapolated.
2. Utilize the Right Tools
Having the right toolset can not only improve the efficiency of your people analytics processes but also enhance its implications for the organization. Hence, it is essential to research and invest in the right tools which help you gather the required data easily, as well as help you identify patterns and generate reports.
3. Detect Problems in People Management
Similarly, it is essential to identify the major issues that you wish to solve with people analytics. Once the problems are identified, you should define the metrics that will help in setting a baseline and the improvement that you wish to observe in them. Additionally, you should also prioritize the problems to ensure a sustained effort in resolving them.
4. Identify and Overcome Challenges
Additionally, multiple challenges will arise while trying to develop and implement people analytics methods in your organization. For example, the HR team would have to undergo training for the usage of the data collation and report generation tools. These challenges should be resolved to help you gather the benefits of analyzing your workforce.
5. Transform Insights into Actions
Once you have collected the required data and generated reports for gathering insights, the next step is to develop and implement the recommended changes. You should help the management understand the benefits of implementing the changes and help them identify which metrics in the reports point towards the necessity of the changes.
6. Tie People Analytics with Business Goals
Another excellent people analytics strategy is to tie these analytics with business goals. By clubbing them together, you can understand which metrics directly affect the efficiency of your organization as well as which metrics affect business outcomes. It will also help you prioritize the changes required for maximized efficiency.
7. Develop Clear Communication
To ensure the success of people analytics, it is also essential to have a clear communication strategy. By developing simplified means of communicating with your management about the results of analytics, you can ensure their full cooperation in undertaking improvement plans. Hence, it is essential to have clear communication in place.
8. Make use of Data Ethically
Finally, it is extremely important to ensure that the process you deploy to collect and use workplace data is completely ethical and compliant with local and national laws. Since this data is generated by the employees working in the organization, they should be aware of its collection and usage. Hence, your organizational privacy policies should encompass the same.
Conclusion
People analytics is an essential component for ensuring the long-term success of any modern organization. Aided by technology, data collation and analysis have become extremely relevant for the modern workplace. Hence, HR teams should utilize the right tools and gather the data generated by their workforce, generate reports, infer meaningful insights, and implement the right changes to optimize the efficiency of their employees, while keeping them engaged and satisfied with their organization.
