The need for people analytics within an HR function has been a discussion that has been on the table for the past several years.
Extensive digital and cultural changes in the modern workplace have begun to reshape and redefine both the structure of organizations as well as the culture of the workplace and, in many cases, the work itself. Now more than ever, organizations are relying more heavily on data to find, hire, and manage talent.
HR, People Analytics, and the Modern Workplace
In his Bloomberg Business article, author and Humanyze CEO Ben Waber points out that even the slightest changes in behavior – and in workplace procedures and conditions – allow workers to be happier, healthier, and perform better. Waber writes, “People analytics transforms our understanding of socialization in the workplace, the impact of office layout, and even concepts as ‘soft’ as creativity.” Analytics, he says, have the potential to radically improve the way we work.
Indeed, an increasing number of organizations are putting an emphasis on implementing and developing “people analytics” within their business models.
The Deloitte University Press’s recent publication, Global Human Capital Trends 2016, discusses these changes and the increasing importance of people data among organizations, highlighting:
- 77% of all organizations believe people analytics is important
- 82% of HR respondents view analytics as very important or important
- 69% of business people view analytics as important
HR teams not only seem to be accepting but embracing the integration of HR data and people analytics into the internal processes of the business, and with good reason. In situations that require high-volume hiring for lower-skilled work, the use of data-driven hiring assessments to cull the applicant pool improves job tenure by 15 percent.
There’s no arguing automated systems and the data they produce can sort and clarify information that might otherwise overwhelm even the most efficient and effective HR and recruiting departments. The data provided by tools like hiring assessments in conjunction with cloud-based HR systems – which provide a more comprehensive overview of integrated HR data – can help HR staff and hiring managers make workforce-based decisions with a higher degree of accuracy than ever before.
HR Metrics and Analytics Use and Impact
In their HR industry research in Global Human Capital Trends 2016, authors Michael Stephan, Shinichiro Uzawa, Erica Volini, Brett Walsh, and Roberta Yoshida articulate that the vision for the future of HR is not one that involves HR departments being nudged out of relevancy by data and technology. On the contrary, “This year, HR teams are more focused on innovation, analytics, and the rapid adoption of cloud and mobile technologies to make the work experience better.”
Analytics in human capital management is being used in a number of different areas in businesses to drive positive momentum. From utilizing pre-hire assessments that expedite the hiring process to identifying potential leadership candidates, data play an increasingly vital role in driving desirable outcomes across the board.
The Deloitte study gives several examples of how people analytics specifically is driving organizations into the future by applying advanced analytics to HR management decisions. On a broad scale, people analytics is helping identify better-fitting candidates, predict peaks and troughs in workflows, and contribute to building stronger company cultures.
- Identifying the high performers: With the help of analytics, the profiles of top performers in an organization can be analyzed as a means to help identify candidates with similar strengths and core competencies, and who show the most promise of performing well and staying engaged and within companies for a longer period of time.
- Avoiding the low performers: Analytics has been used in certain cases to predict which candidates are at risk of becoming toxic employees, and has successfully aided in reducing the number of workers who meet these criteria in specific organizations.
- Determining factors that contribute to maximum employee productivity: One organization has begun to
experiment with using smart badges and has gathered data that suggest offices with more natural light and inter-company collaboration experience higher rates of productivity and lower rates of employee attrition and turnover.
- Strategizing for peaks and troughs in work schedules: Some automotive companies have begun to study patterns of attendence, observing when unplanned absences peak throughout the year. The data gathered from these patterns enable these companies to schedule more workers for shifts known to have high absence rates.
- Increasing employee engagement: A major credit card company has begun assessing patterns and relationships among people data to allow decision-makers to take greater responsibility for issues such as turnover, attrition, and retention of the highest-performing employees.
Though organizations are still in the early stages of adopting and implementing technology that allows them to leverage data in new ways among their workforces, it is clear these trends are gaining momentum. Some organizations have even begun to add roles like “leadership development specialist” and “chief experience officer” to improve customer experience both among external customers as well as internal employees.
For efficient and effective HR staff and business partners, HR metrics and analytics are becoming increasingly essential, and will soon be necessary in optimizing business outcomes. Indeed, these data present unprecedented insights and opportunities for managers and leadership across all business aspects.