Analytics and data science have been disrupting how businesses are done. They have created a profound impact on how HR leaders make their strategic decisions instead of relying on instinct and intuitions. People analytics, also known as talent analytics, help HR leaders leverage the power of data, thus reducing bias and improving business performance. If you’re yet to leverage people analytics for your business and unsure where to get started, this quick guide will come in handy.
Defining People Analytics
People analytics is a practice where you collect relevant data about your people and the organization and translate them into actionable insights to improve your business performance. While some may assume that people analytics is only meant to improve the HR function, but when done right, it can help improve the overall business function. You will be fascinated to know that today, over 70 percent of organizations are leveraging people analytics to improve their business performance.
Application Of People Analytics: Data Analytics Trends
People analytics is directly or indirectly driving and influencing several critical aspects of organizations.
Improving Business Performance
The every-day use of analytics in HR might be less than other functions like sales, operations, IT, marketing, etc. – but studies have suggested that analytics, when embraced by the HR department, could propel the business forward. McKinsey’s report indicates that people analytics can increase recruitment by 80 percent, rise in business productivity by 25 percent while decreasing the attrition rate by 50 percent.
Setting Hiring Goals
Irrespective of the business you’re in, the critical challenge that recruiters face is meeting the hiring goals handed over by the leadership team. Setting a realistic hiring goal has to be based on data, and people analytics come in extremely handy in this case. For example, if your hiring manager wants you to hire a web developer from a tier-one school with a salary budget of INR 30,000 per month, you can use analytics to decide if this hiring goal is realistic. Based on the real-time data, you can then arrive at a mutual hiring goal that is realistic and doable.
According to AmericanProgress.org, the cost to replace an employee is 200 percent of the annual salary. Employee retention is one of the biggest challenges that HR leaders face today. A data-driven approach can help mitigate this problem. For example, HR leaders can use people analytics to predict the category of employees who tend to stay long at a job or which management style can frustrate employees more.
Recruiting The Best Candidates
HR analytics can be used effectively to identify the best candidates. For example, during a recruitment screening process for a Java developer, it can be used to analyze the candidate’s competence within the program.
Leveraging people analytics, you can improve your employee engagement. Google is the perfect case study of using data analytics for employee engagement. Using employee surveys and predictive analysis, Google discovered that great managers have certain qualities like coaching skills, result-oriented, do not micromanage, possess vital technical skills to guide the team, have a clear vision, etc. It is easier to push for behavioral change when backed by reliable data.
Implementing People Analytics
Now that you’re convinced with leveraging people analytics, let’s understand how you can implement it in your organization.
- Data Based Decision Making: Encourage data-based decision making in your organization. To begin with, start identifying the pain points in your organization. Be realistic in setting the goals and analyze how data can solve the problem.
- Gather Data: Once you have identified the pain points, decide what data you want to collect. Use data analytics tools to gather data in a standardized way. We will discuss more devices in the later section.
- Time To Take Action: Finally, the essential part is to analyze the data and then take actionable insights.
Finding The Best People Analytics Tool
There are several people analytics tools to choose from. While some are generic analytical tools, others are specifically tailored to HR functions.
- Flexibility: Choose a tool that is flexible and can be easily integrated with your existing HR tools.
- Easy-to-navigate: Your people analytics tool should have an easy-to-use interface so that employees can use it without too much training.
- Predictive HR Dashboard: Look for HR tools that have a predictive HR dashboard so that you can analyze the data and predict the next course of action. For example, suppose you see that your employees are updating profiles or getting more active on professional recruitment sites or networking sites with a lack of motivation at work. What would be your next predictive course of action? A predictive HR dashboard comes in handy when your organization is ready to up the game of employee retention.
- A holistic dashboard: Your people analytics tool should have a holistic view of the analytical solutions. For example, a data-driven people analytics tool should have an overview of the turnover, risk of attrition, matching employee expertise with business requirements, employee survey feedback and reports, employee diversity ration, and other important parameters that are important for your business.
Identifying and leveraging the right tool is just the first step towards using people analytics. Ultimately, you need to derive actionable insights with the right set of the workforce to drive your business forward.