While finance and marketing teams have been using analytics for years, people analytics is a relatively new concept in HR and too many teams are missing out on this opportunity because they don’t know how to capitalize on the data they have available. Read these tips to make the most of your people data.
People analytics is a relatively new concept for many CHROs. Finance and marketing teams have been using analytics for years to monitor business performance, as well as track and predict customer buying patterns. Now, the benefits of big data can be applied to people challenges, from recruitment and development to performance management, engagement, compensation, workforce planning and retention. Doing this can transform the effectiveness of organizations. However, too many HR teams are missing out on this opportunity because they don't know how to capitalize on the data they have available.
People analytics simply involves using employee data and statistical analysis to create a greater understanding of the people in your organization. Talent analytics is one component of this. However, people analytics is a broader concept, as it encompasses all of your employees, not just those who have been identified as talent. Correlating your employee data against business outcomes provides actionable insights that can help you make more informed people decisions. Here are seven tips to help you use and benefit from people analytics:
Review your existing employee data
To create effective people analytics, you need usable data. You undoubtedly have data on your employees, such as demographics, length of service and prior employment history. You'll also have performance data, such as their line manager ratings, sales figures, customer service feedback and even details of their punctuality, absenteeism and their disciplinary record. You may have assessment data — such as personality or ability test results — from when they were recruited. You may even have survey data on their level of engagement. The first step is to clarify what employee data you can access.
Ask a question
While you could use employee data to identify whether there's a connection between the eye color of your employees and their performance, it's not very useful. Instead, concentrate on asking questions or creating a hypothesis around a challenge you'd like to explore. Your questions could be very specific such as: Why are we not recruiting many female technicians? Or your questions could be more general, such as: Why do we have early attrition in our organization? Are we attracting the right people? The more data you have, the more questions you will be able to answer.
Analyze and correlate the relevant data
Analyzing the data is where it gets interesting. For example, your performance data will reveal who the top performers are in different parts of your business. By analyzing the pre-hire assessment data from those employees, you may find some commonalities. For example, one of our clients found that their top salespeople were empathic, consultative and supportive. This surprised them, as they were expecting their top sales people to be confident extraverts. Knowing the key characteristics, competencies and motivations of your top performers can help you to create a success profile of what it takes to succeed in your organization. You can then recruit and develop people against this profile. This is an area where people analytics can pay real dividends if you have the skills in place to take advantage.
Check your assumptions
If you're going to make decisions on your data, or present it to the c-suite, you have to be confident about its quality. If you have missing data or if your sample size is small, you may still be able to partly answer your question or support your hypothesis. However, you'll need to highlight the imperfections of your analysis, as you won't have full information. Don't make changes in your business unless you can fully trust the results of your analysis.
Design an appropriate intervention
Assuming that you're confident in what your data is telling you, the next step is to create a solution to the issue you're addressing. For example, let's say you wanted to encourage more females to apply for technical roles in your organization. You've analyzed your existing recruitment channels to identify where your current female applicants are coming from. You've examined your application process to see a high percentage of females are dropping out at any stage. You've also looked at the characteristics of your existing female technicians. You've tried to understand what attracted them to your organization, what engages and motivates them to work with you and why they stay. You can then create a hypothesis of why you think you have too few female technicians. This may be related to how you're describing the job, how you're promoting it, where you advertise or how you're managing your selection process. You can then take some appropriate action to rectify the situation. Focus on one or two actions that you expect will have an impact, but involve low effort on your part.
Validate the changes
After implementing your intervention, track and monitor the situation to assess the business impact. Don't just implement the intervention and hope for the best. Collect evidence of what has changed, so you can correlate the change to your intervention. Otherwise, you won't be able to say for certain what actually caused that change. Tracking your progress and regularly monitoring the results will help you to draw accurate and justifiable conclusions. Your interventions may not wholly address the issue or problem, but you may be able to show that they've helped to tackle or minimize it.
Share your successes
Let's say you've created a successful intervention to attract people for certain roles, having identified what makes a good performer in your organization. If hiring mangers start to see a higher ratio of better candidates — or if you're recruiting people who are performing better in their first six months — then you'll know you've had an impact. It's important to share this success internally. If you can show the tangible benefits of people analytics, you can more easily gain additional investment, so you can gradually scale-up to address other challenges.
People analytics an important topic for HR because it can help you recruit, develop, engage and retain the right employees. Beware though, as it is easy to be misled by your data. You may reach reasonable conclusions that turn out to be flawed. If you don't have the capabilities to analyze and manage data in-house, then talk to experts to help you ask the right questions, draw appropriate conclusions and choose the right interventions.