People analytics is something that many business leaders know they should do, but never get around to actually doing it. There are several challenges that every business encounters when implementing people analytics which can cause projects to drop down the to-do list and never see the light of day.
A PwC survey on the future of work recently found that 60% of organisations see using people analytics as important. But only 27% have begun using it.
Laying the foundations for your people analytics initiative is crucial for its longterm success. This groundwork is made much easier when you’re forewarned about potential hurdles.
The quality of data and data management
One of the biggest challenges facing any analytics function is ensuring data is in the right format and can be trusted. If data isn’t accurate then its results may be skewed as well, meaning you cannot act on it with complete confidence.
The problem seems especially troublesome in HR. 84% of HR departments in large organisations state that they face major data management challenges. HR has a bit of a rep for having ‘dirty’ and unreliable data.
This is because companies often store people data in different ways, on a disparate range of systems (including at best, a spreadsheet and worst, paper) and in many formats. Clearly this will cause issues for anyone looking to consolidate and use that data. Plus, the best insights come from combining and analysing a variety of data sources.
In short, your people analytics programme will fail - quickly - if you cannot get your data ducks in a row. That involves auditing all available people data, including the information locked away in other departments.
Data needs to be put in one place which is easily accessible to the people who need it. It also has to be cleaned and formatted. To ensure it’s trustworthiness, there needs to be a paper trail of how it has been collected, ingested into a system and any changes made to the data.
This is a large task that shouldn’t be underestimated in importance. It’s worth taking your time with this to get it correct, because it underpins the rest of your analytics.
Needing a large investment
For some, getting the budget signed off for people analytics can prove a challenge because of a belief that you need to spend big, right from the outset.
Founder and managing director of Lever Analytics Peter O’Hanlon explains: “People have been burned by big expensive IT projects and there is an incorrect assumption in some quarters that you need to spend big to get started.”
Yet, often it’s the smaller, less resource-intensive projects that provide the quickest returns. So instead of waiting to get a big budget signed off, or to collect reams of extra data, start with what you’ve got. Prioritise projects that will make an immediate impact, as they will help gain senior buy-in for bigger ticket items.
Running pilot schemes can also be a relatively inexpensive way of proving the value of people analytics in your organisation. That said, you may still need some initial investment in data storage and hiring the right skills.
Make sure that any project you trial will link back to your business’ goals and objectives. Otherwise there won’t be a tangible impact on your organisation’s bottom-line to illustrate the value of using your people data.
A lack of skills in HR
The employees in your HR department may not be the most data-savvy. Giving them a database full of information won’t be useful. You need someone who can take the data and make it meaningful to your HR team.
That could be a dedicated hire who sits within your HR team and only works on people analytics, or someone who works with other data as well and serves many departments. It could also be a third party. What you decide on largely depends on the size of your organisation, your budget, how much people data is available and how many projects you have planned.
It can also help to initially partner with another analytics team within your organisation who can work on a pilot project. If you don’t have one, then external contractors are your next best bet.
The perception of people analytics
The reputation of people analytics can be varied. On one hand, business leaders might be keen to better leverage their workforces. They might have heard of the many productivity and competitive benefits that people analytics can bring.
However, others may be skeptical of its usefulness, or worse still, distrustful of people analytics altogether. Employees may see themselves as being reduced to numbers. Successful people analytics schemes must change these negative perceptions.
Sometimes, data analysis can show some surprising results, challenging decades old notions and beliefs. This can be hard to stomach for some, with their first instinct to question the validity of such results. Making sure that your data quality is good and that there is a clear audit trail will challenge any worries about the data’s trustworthiness and therefore the accuracy of results.
Running a pilot or ‘quick win’ projects can reduce fears that people analytics will dehumanise employees. It can create benefits in their work day that make them happier, increasingly engaged and more satisfied in their roles. This will also prove its value and use to any critics.
Barriers that are worth jumping
Every organisation is going to come across a challenge or two when using people analytics. That shouldn’t put you off. The many benefits to using people-based data will offset any initial difficulties.
Using your workforce in the optimum way will soon be a major competitive tactic. The only way to achieve this is through people analytics. The most forward-thinking companies understand the power of their people.
Many problems can be anticipated and prepared for in advance. After all, prevention is the best cure. Usually they hinge around data quality and infrastructure or company culture. Addressing both at the start will allow you to focus on the nitty-gritty, important work around people analytics.
Photo by Tom Parsons on Unsplash.