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What does people analytics really mean?

And how has it driven the emergence of the HR role? 

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People Analytics, also known as HR analytics or workforce analytics, ranks as one of the most critical priorities by organizations today as the role of HR continues to elevate to coincide with the increasing value and ROI associated with optimally managing an organization’s human capital to drive successful business outcomes. Traditionally, HR took more of a backseat role amongst the C suite and lacked delivery of key measurable insights (as CFO/Finance most commonly provides) but this all changed in the past decade as HR Analytics grew in adoption.

What is people or HR analytics?

It is the use of employee data and business information (typically operations data) that is associated with a specific business problem or goal that is both measurable and actionable. By collecting relevant data about your workforce in the context of a particular problem set, measurable insights are gained that can also be improved with associated goals. A straightforward example would be looking at the time to hire and retention for recruiting purposes. Based on collecting data associated with hiring and retention, an organization can measure the associated cost with hiring and which hiring sources appear to drive the best business value or ROI in terms of the successful retention of new employees.

What does people analytics really mean?

How to work with HR analytics

Collecting meaningful KPIs

The HR data analytics construct begins by properly defining the business area or problem and then identifying the key measurable factors associated with that area of focus. In our previous example, focusing on recruiting, key performance indicators (KPIs) included the time to hire and retention rates. One could also add performance rating to the mix to identify which hiring sources attributed to the highest percentage of new hire top performers.

The HR analytics space has matured and become an established discipline — one can find many published works or pursue certificate programs to specialize in this area. Diversity, compensation, career and development planning, performance management, talent flow, workforce planning, and retention rates are key areas that led companies to adopt people analytics as a vital part of running a high performing company.

The importance of data quality in people analytics

A significant impediment in being successful with people analytics is problem data – many organizations experience data quality issues, lack consistent definitions, or have poor data integrity (i.e., multiple sources of similar data that do not synced up). A good deal of workforce initiatives has failed when organizations found that management had little faith in the underlying data which resulted in low adoption of any business initiatives based on these measurements.

Research by Bersin1 has published a maturing model around people Analytics in which companies are grouped in one of four levels in terms of their level of adoption and practice. These levels are:

 

Level 1

Operational Reporting
(traditional HR admin reporting)

Level 2

Advanced Reporting
(HR produces reports to help support strategic decision-making)

Level 3

Advanced Analytics
(HR addresses business problems and drives informed data insights)

 

Level 4

Predictive Analytics
(HR can drive predictive models to optimize their human capital)

 

Most companies are still in the Level 1 and 2 stage with one of the biggest challenges again being the quality of data available and the supporting tools and resources that are on hand. It’s the “garbage in/garbage out” principle that is a constant challenge for HR to ensure the data is accurate. But high quality people data is essential to help drive confidence in the associated measurements obtained when conducting people analytics.

 

1 | Source: https://joshbersin.com/2016/07/people-analytics-market-growth-ten-things-you-need-to-know/ 

Getting started with people analytics

If you are looking to get started with people analytics, here are some of the most essential HR metrics that are commonly used today:

Cost per Hire

Understanding the cost to recruit talent by position can be very helpful. Add to this analysis around the source of hire and performance ratings to help pinpoint the most effective means to hire high performing employees.

Turnover Rate

Measuring turnover at all levels of your organization helps you understand where employee retention is or is not working. Again, you will want to segment by department, by role, and by performance rating to help gain a broader understanding, which may also lead to predicting employee flight risk.

Absence Rate

Tracking absence is a fundamental metric in measuring how productive your workforce is. Fortunately, companies have established tools in place to capture good data quality for this measurement.

Job Satisfaction

Or Employee Engagement. This measurement is related directly to performance and flight risk. The adage goes “An engaged workforce is a motivated and productive workforce” which leads to positive company culture and higher retention rates. Performance data is typically available for this measurement, but you can also leverage employee surveys to help drive additional data points.

Performance

It’s vital to conduct extensive and ongoing performance reviews, including continuous feedback. 360-degree feedback also helps avoid one-sided reviews. Establishing who your high-performers are is critical as it pertains to many areas such as succession planning, quality of hire, etc. It’s always a good thing to know who your high performers are.

There are hundreds of HR key performance indicators that can theoretically be measured, so it is essential as an organization to decide which metrics are required and can help drive the most significant impact to achieve successful business outcomes for your organization specifically.

How can we stay on top of HR Analytics and make sense of all this data?

Besides having qualified and engaged HR professionals versed in HR analytics, it’s crucial to have supporting tools that let your organization effectively measure and communicate out the analytics and  help drive informed decision making. The most common visualizations come in the following forms:

Dashboards

Big Data

KPIs in org charts

At Ingentis, our org.manager solution delivers dashboards and org charts so that you can effectively and automatically track key HR metrics that are always up-to-date and based on your system of record. Furthermore, with the built-in security and permissions capabilities you can rest assured your HR data analytics and reports are distributed securely. We invite you to speak to us about People Analytics and what Ingentis org.manager can do for your organization.

Join our free software webinars to learn more about people analytics with Ingentis org.manager

See how visualizing HR data in org charts, dashboards and diagrams created with Ingentis org.manager can provide you with great insights. 

 

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