Using People Analytics To Drive Business Performance
Category • 7 Min Read
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.
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.
People analytics is directly or indirectly driving and influencing several critical aspects of organizations.
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.
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.
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.
Now that you’re convinced with leveraging people analytics, let’s understand how you can implement it in your organization.
There are several people analytics tools to choose from. While some are generic analytical tools, others are specifically tailored to HR functions.
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.
After spending over a decade in Corporate Communications, Chayanika started second innings of her career as a Communications Consultant, Content Marketer, and Freelance Writer. She writes on different topics including HR, lifestyle, travel, parenting, digital marketing and mental health. Chayanika is a part of the WritelySo team where she writes engaging content for the readers. When not writing, Chayanika is usually exploring new places with her husband and daughter.