What Is People Analytics?
People analytics is a data-driven approach to assessing and managing your workforce. Inside that data lies incredible opportunities to both understand and transform your organization’s most valuable asset—its people.
With the right data, you can:
- Uncover insights about your employee’s challenges
- Identify workforce-related opportunities
- Make business decisions using facts
Understanding People Analytics Software
Even though people analytics is a relatively new trend, Deloitte found that the highest-performing organizations are already linking people data with their business goals. They use that data to both predict and improve their business outcomes. They’re also 400% better at making hiring, promotion and compensation decisions.
MIT and the University of Pennsylvania found that companies using statistical models and predictive analytics inside HR produced higher financial returns.
Instead of relying on intuition and experience, people analytics helps you turn to the evidence for answers—making you more effective when evaluating job candidates, promoting employees or training managers.
Who Can Benefit From Using People Analytics?
To manage your people, you need to first understand them. Which is why people analytics can have such a massive impact on any organization.
That said, there are three situations where people analytics can be the catalyst your business needs:
You will likely benefit from using people analytics if you…
Have many locations
A restaurant chain with locations nationwide might use people analytics to understand why certain locations perform better than others.
Are experiencing high growth
New CEO? Recent aquisition? Slew of new hires? Accelerated workforce changes often cause cultural changes, which is disruptive for even the healthiest workforces. People analytics helps you navigate transitions so you can maintain (or improve!) your company culture as you grow and expand.
Want to solve a tricky business problem
People analytics lets you dive deep into historical data and identify exactly why turnover is high or productivity is low. You can then make smarter decisions about which programs could help turn things around.
Overall, people analytics lets you answer almost any business question. For example:
- What makes employees want to join our company? What encourages them to stay long-term?
- Which candidates are most likely to be successful?
- How can we improve our leadership?
In the past, organizations have answered these questions only after endless debate. In the end, leaders usually base their decisions on “gut feel.” (Not exactly a recipe for sound decision-making.)
Today, people analytics infuses this process with data. No more guesswork, just smarter, more effective decisions with results that speak for themselves.
Using Talent Analytics To Your Advantage
A recent report from Bersin by Deloitte found companies that invest in people analytics outperform their peers in…
… quality of hire
… leadership capabilities
… employment brand
People analytics can improve every step of your hiring process. You can recruit and retain great people. Make better hiring and promotion decisions based on who has been most successful in the past. Evaluate performance and develop leadership with your organization. Design jobs and structure compensation strategies fairly.
Most organizations use people analytics as a recruiting resource.
Improve the quality of your hires
One company, who’d hired 80+ people in 12 months, could have saved $1.1 million by using a pre-hire assessment tool. That’s the power of hiring the right people from the beginning.
Eliminate bias during hiring
Interviewers favor candidates who are similar, likable and attractive (regardless of whether they can do the job). While we know we should hire based on experience, most of us still hire based on “gut feel.”
In a perfect world (aka a world where everyone uses people analytics), you should be able to point to a number and immediately answer questions like: Can she succeed in this role? Does he share the organization’s values? Does she have the qualities of a future manager?
When you survey high-performing employees and identify behavior and experience trends, you can immediately screen for the perfect qualities. Maybe you spent a decade thinking that high GPA meant high performance, but when you looked at the data, you found that “ability to thrive without direction” was a more accurate predictor of success. (Better late than never, right?)
Understand and predict retention
Forty percent of employees are currently at risk of leaving their job in 2017. No wonder retaining top talent is one of the most important issues for CEOs nationwide. In fact, retention and engagement challenges concern 86% of business leaders.
To learn why people leave and predict retention, review engagement and culture data by tenure. You’ll start seeing patterns and risk areas. If you haven’t already, collect employee data like age, experience, education, number of past jobs, performance reviews, hours worked, promotions, benefits, engagement…. When you compare that data against time with the company, you’ll get a good idea of which traits indicate long-term success.
Pro tip: Use exit interviews to discover historical trends. Then you can check current staff to determine if they’re at risk for turnover.
Recruiting isn’t the only area people analytics can come in handy. You can’t go wrong using data to inform all your business decisions—from performance management to compensation to workforce planning.
For example, most companies compensate based on performance, incentivizing employees with bonuses. But just because it’s standard doesn’t mean it’s right for your business. You may discover that your sales team would prefer a big pizza party or an investment in professional training.
With the right data, you can stop wasting time and money on ineffective programs and instead focus on what really works.
Real World Examples of How to Use People Analytics
We worked with Nando’s Peri-Peri to uncover which cultural characteristics impacted business metrics. For Nando’s, they were most concerned with metrics around operating profit, food safety, store cleanliness, and customer service.
After surveying their employees and comparing that data against their internal metrics, we found that “fun,” “responsibility,” and “respect” helped drive total sales and operating profits across Nando’s locations.
Two behaviours were most closely linked to these drivers: employees “giving their best” and managers holding employees accountable through performance discussions.
Turns out, the locations with the highest combination of scores also had the highest growth in operating profit over the same period. The restaurant with the greatest improvement on these two dimensions was in the same group of top four locations with highest operating profit growth.
This information then allowed Nando’s to allocate the right resources and train managers accordingly.
Leverage People Analytics In Your businessRequest a Discovery Session
How To Start
To make better HR decisions—which are really just better business decisions—start with the data.
(We know, easier said than done.)
A recent survey found that most HR departments stop before they ever get started. Inaccurate, inconsistent, or hard-to-access data meant lots of long afternoons doing manual manipulation. Only 8% of companies believe they have usable data for people analytics initiatives.
The good news is, you can start small. And you probably have better data than you think. You don’t need to waste years hunting down the perfect, cleanest numbers.
You have two options:
- Collect new data
- Harness data already at your disposal
Whichever path you choose, start with the simplest data: Employee performance, demographics, culture, and engagement. Focus on your most important business goal first—let’s say recruiting and retaining talent—then expand your focus from there.
How CultureIQ Can Help
At CultureIQ, we know culture is a business concern, not just an issue for HR. Having a strong company culture is key to continued growth, remaining competitive and attracting top talent.
To strengthen your culture and answer your most important business questions, we use a 3-step process:
- Survey: Use our pre-written, benchmarked survey or create your own with the help of our strategy team. Collect and measure the right information on an ongoing basis.
- Software: Quickly customize and deploy pulse and trend surveys. Immediately access easy-to-read reports, share them with stakeholders, leadership, location managers and employees.
- Strategy: Our in-house strategy team holds your hand along the way, helping you ask (and answer!) the right questions at the right time. All while identifying important trends along the way.
This process helps you turn ambiguity into clarity, guesswork into certainty and data into action.
What is your People Analytics Strategy?
Don't Just Take Our Word For It
“Most importantly, utilizing CultureIQ has shown our employees that their feedback is important to us.”
“CultureIQ has been great. I believe all companies can benefit from engaging with their culture in this way.”
“CultureIQ has been such a meaningful tool for MailChimp. The surveys have helped us improve our internal communication across the board, and employees appreciate the opportunity to share feedback throughout the year. And the customer service is amazing!”
“CultureIQ provides our companies with the ability to measure, assess, and take timely and appropriate actions in addressing the engagement of our rapidly growing and evolving global workforce.”
“CultureIQ has been a simple, user-friendly and easy to navigate tool that allows us insights into our employees around the globe.”
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