Most of us are used to seeing or experiencing data analysis in marketing, sales or other customer facing departments. Now, it’s hitting closer to home by coming to workplaces and the employees within them.

People analytics is gaining more attention, with 69% of organisations now building a people analytics database. Increased focus on measuring and addressing diversity, gender pay gaps, skills shortages, retention and productivity have contributed to the rise of people analytics.

Many business leaders are now realising that people analytics is the missing piece of their analytics puzzle and a way to gain a competitive edge in the market.

Ready-made data

In many ways, it’s almost easier to get started with people analytics compared to marketing or sales analysis, because the data is already there.

Organisations collect a lot of data about their employees in the course of a working week, such as information about pay, performance, recruitment, learning and talent mobility. Some of the more mature companies in this area have near real-time data on employee engagement, recognition, communication between teams, wellbeing and sentiment.

Much of the work around people analytics, therefore, will involve consolidating and sifting through that data.

Recruitment is the top use of people analytics at the moment, closely followed by performance measurement, compensation and employee retention. This provides us with an idea of the many benefits that can be reaped by analysing the workforce.

Five reasons why you need people analytics

1. Identifying gaps and opportunities

Knowledge is power, so having a lens on your workforce can enable you to identify any gaps in it - such as a lack of skills or people in a team.

It will also reveal how well your organisation is functioning, which has a knock-on effect on training and recruitment.

People analytics can also reveal untapped opportunities in the workforce, such as a hidden talent that an employee has learnt outside of work.

2. People analytics improves productivity

Employee data can provide insights on high-performing teams and their characteristics, allowing you to replicate those factors across the rest of the workforce.

The data can tell you when people are performing well and when they aren’t, meaning you can step in when needed to prevent productivity losses with extra support or resources.

By implementing a people analytics function in its HR department, Google vastly increased workplace productivity. It’s generated almost $1 million more per year because of the analysis programme.

3. Analysing your recruits

People analytics is particularly popular in recruitment because it can have a drastic impact on the effectiveness of your hires: how well they fit in and get up-to-speed.

There are a lot of cultural factors that cannot always be determined in the interview process, but which can make a lot of difference when someone joins a team. People analytics can help sift through recruits to ensure that they are not only qualified for a role, but will be comfortable working for your company.

This kind of analysis can help you pinpoint any critical new hires that you have to make based on your immediate business goals or skills gaps. Plus, analysis of successful employees will highlight any attributes that you should be looking for in the recruitment process.

If, for example, you have a goal to increase revenue by 20%, then you might need to hire some more business development managers. Looking at the attributes of your top performers currently in that team may show that they are particularly good at independent thinking. Armed with this knowledge, you can then look for candidates who show this strength.

Of course, this means your recruitment process will be less susceptible to unconscious bias, such as favouring people from a certain academic route or industry.

4. Attracting the best talent

Getting people through the door can benefit from some analysis as well. There are now tools available that can predict if someone is looking for a new job, before they even advertise themselves as available. This gives you a headstart over competitors, especially for in-demand or very senior talent which is few and far between.

Then it can provide insights on why people join your company. Your office location, the ability to travel or your annual learning budget might have tipped the scale in your favour with a new hire. By knowing this, you can promote these perks to other recruits and attract the best talent as a result.

5. Knowing why people leave

On the other hand, people analytics can also uncover the unspoken reasons why people leave. Certain teams, role or departments might be flagged as having high turnover or disengagement, spurring you to take action in those areas to prevent more employees leaving.

Someone who is identified as being high risk, for example, could be given more support if they are feeling overwhelmed with work. Alternatively, they might be feeling some pressures outside of work and flexible working may be a solution.

Many benefits can be uncovered - if you start today

People analytics can positively impact many different parts of your HR and recruitment. Because there is a huge range of applications, it can be tempting to do every single one from the outset. However, you may be spreading your resources too thin. Ranking each project and prioritising the ones that offer the quickest returns can prove more beneficial.

There is a lot of groundwork to be done when starting a people analytics function from scratch. Many organisations have enough data to begin with, but will need to clean and store it correctly to make it useable. A dedicated analyst in the HR team may be needed. Or the project could be outsourced to a central data department or third party.

Your employees are your biggest advantage. More organisations are realising this and experimenting with people analytics as a result. Ultimately it’s about creating a better and more attractive work environment for your people. Isn’t that worth the investment?


Photo by Ryoji Iwata on Unsplash.