What the $#@! is People Analytics?

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Data is everywhere. It’s in your job, it’s in your internet history and it’s even in your phone. There’s so much data, it seems to only come in one size: Big Data. And how do businesses use their data? With analytics. You’ve heard of data analytics, predictive analytics and maybe even prescriptive and descriptive analytics, but what about people analytics?

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People analytics is a relatively new concept that’s still on the rise. It’s a practice that involves your HR department and their quest to improve employee hiring and retention. But enough of this vague description; let’s go a little more in-depth:

A New Type of Talent Management Strategy

People analytics is a talent management strategy that takes a more data-driven approach. Rather than basing hiring and retention decisions on hunches and assumptions, people analytics allows businesses to use concrete numbers to drive their decision-making processes.

It was first pioneered by Google, when the company realized just how important employee management is to innovation. John Sullivan described what exactly Google’s realization was: “A strategic focus on people management is necessary because innovations come from people, and you simply can’t maximize innovations unless you are capable of recruiting and retaining innovators. And even then, you must provide them with great managers and an environment that supports innovation.”

Essentially, Google upgraded people management from one of many important strategies, to its most important strategy. Although your marketing, supply chain and product development are all incredibly important, those strategies are still developed by people. And yet, unlike in those departments, human resource decisions are often made without the use of data-driven insights.

Goals of People Analytics

So we know that people analytics uses employee data to improve hiring and retention. But what does it do with that data in order to improve them? In general, today’s companies are using people analytics to:

Increase Employee Engagement

We’ve wrote about the problems with, and potential solutions for, employee engagement. People analytics is a newer strategy that aims to solve this dilemma. Combining employee surveys with various types of performance metrics, you can objectively analyze which employees are disengaged, and why. Additionally, you can use predictive modeling (like what Google is doing) to predict future engagement problems, as well as future opportunities.

Evaluate Managers

One crucial aspect of people management is evaluating the managers. They play an important role in continuing to motivate, engage and develop their teams. Again combining survey data with performance metrics, you can use people analytics to identify your best managers.

In addition, you can discover new insights related to how they manage a high-performing team. With this in mind, you can help your lower-performing managers adopt the strategies of the best ones, helping every team perform better.

Improve Corporate Culture

People are much happier going about their day-to-day work when they both enjoy and fit into the corporate culture. This is incredibly important to your long-term success, because your culture is not only difficult to change, but affects what type of employees you hire.

Part of developing that culture involves giving your employees a voice. If they feel like their responses in your various surveys can actually affect change, they’ll feel like they’re playing a part in the improvement of your company. At least, this was the case for Google’s employees.

The Future of People Analytics

As we mentioned earlier, people analytics is still a fairly new concept, and there are plenty of changes and advances ahead. As we look toward the future, here’s what to expect to see:

Specific Software is On the Way

Although there aren’t very many people analytics systems available yet, they’re on the way. As Josh Bersin of Bersin by Deloitte explains in the Wall Street Journal, “Almost every major ERP software company is investing in people analytics; at the same time, there are dozens of smaller companies focusing on text analytics, retention analytics, sentiment analysis, and even analysis of employees’ physical locations, heart rates, and exercise patterns. As the market matures, these smaller companies will either grow quickly or be bought.”

Improving Recruiting

Up to this point, people analytics has mostly been used to improve the work lives and performance of your in-house employees. However, there’s an incredible amount of potential to use it for recruitment, as well. For example, you can use people analytics to identify character traits and/or specific skills that are common in your most productive employees. You can then look for those traits and/or skills in the people you bring in to interview.

Of course, there needs to be an ongoing evaluation process, as your data will change as new employees come and go. But as long as you keep on top of it, you can make the best possible hiring decisions for every open position.

An Industry Standard

In the same Wall Street Journal article, Josh Bersin discusses just how early on we are in the adoption of people analytics. According to Bersin, the adoption of people analytics in HR departments didn’t improve much over the course of 2015. Despite that statistic, he’s not worried. Most trends experience exponential growth, so Bersin expects people analytics to become an HR standard within 10 years.

In other words: you better start gathering up that HR data. You’re probably going to need it sooner than you think.

How to Implement People Analytics

So now you have a better understanding of what people analytics is, does and will do. Now what? It’s high time to start implementing a people analytics strategy into your HR department. At the very least, you should start laying a foundation.

For starters, start managing your HR data the same way you do with all of your other data (if you haven’t been doing so already). Make sure you clean it up, so it’s as accurate as possible. You’ll also want to start thinking about what kinds of surveys you want to send out. Specifically, do you want to find out your employees’ level of engagement, or how they view their managers? Then you can develop some quantifiable performance metrics that can supplement the qualitative data you’ll receive from your surveys.

Finally, and possibly most importantly, get some “Geeks” in your HR department. These data scientists and analysts are the ones that can take your HR management from assumption-driven to data-driven. Make sure you give this task to your best employees, so you can start your people analytics program on the right foot. Just be careful of assuming which ones are your best; it might take a little data to find the best people for the job.

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