What is People Analytics?
Maybe you get confused when you hear somebody mention People Analytics, or perhaps you already have an understanding of what this upcoming term means.
No matter which of the above categories you fit into, I will help you break it down in this blog post. You will get a full tour of the exciting world of People Analytics, and I will make sure you can consider whether you and your organization would be able to benefit from implementing People Analytics.
In short, People Analytics enables organizations to make important business and people-related decisions data-driven. Data is collected and applied to support decision-making (11 use cases below).
People Analytics is not be confused with HR analytics. HR Analytics is typically only concerned with classical HR metrics like absence, number of employees, seniority, avg. salary, org. charts and so forth. People Analytics has a more holistic view and widely collects data for each employee, like engagement, personality, and performance.
Neither should People Analytics be mistaken for workforce analytics, which is more concerned with resource allocation, headcount, and productivity-related metrics.
Beware that many use the terms interchangeably. There is no strong consensus on what (per definition) falls within HR analytics, Workforce Analytics, People Analytics, and employee experience platforms.
What are the benefits and common use cases?
People Analytics use quantitative data to support human decision-making - a powerful combination. But let's try to get a bit more specific with how you can benefit from People Analytics and how it can support your decision-making.
Here are 10 of the most sought-after benefits:
1. Detect stress.
People Analytics lets you detect stress in teams and departments. Some platforms can also show if a specific employee shows symptoms of stress. For example, if an employee shows signs of stress, Zoios will not tell you who that employee is. But, the system will advise the employee to let their manager or the HR department know.
2. Measure the effect of initiatives.
You might know the struggle of not knowing whether your last workshop or teambuilding initiative had the desired effect. People Analytics gives quantifiable data that tells you exactly that.
Let's say you want to improve the social driver in a team. So you arrange 2 team building events where getting to know each other is the main focus. Usually, it can be hard to tell if the events had the desired effect. But by using frequent measurements of your employees' drivers for well-being, like the social driver, you can quickly tell if the events had the expected effect (by comparing pre- and post-event scores).
3. Predict turnover
People Analytics can help you predict which departments have a high turnover risk. This information lets you initiate initiatives to boost retention, or you can start planning to look for new candidates.
4. Improve employee retention.
With People Analytics, you know when your employee's engagement drops and the risk for turnover therefore increases. This allows you to take the necessary action to boost engagement and hopefully avoid employees leaving.
5. Manager feedback.
A manager might, for example, not be aware that he is not offering the necessary support to his employees. With the right People Analytics system, it's easy to spot. This information helps the manager to know where she should improve. Furthermore, it can help HR business partners know how to support and coach the managers.
6. Ensure employee engagement.
By measuring and following the development in employee engagement, and the metrics that drive better engagement, you can create initiatives that ensure a happy and high-engagement workplace.
7. Drive the P&C and HR strategy.
Maybe you know the pain of being unsure about allocating your HR resources. Data can help show you where you need to invest. For example, if data shows high employee stress levels in a particular department. Then you may want to allocate more resources to that department.
8. Insights for D&I (diversity and inclusion).
Get insights into D&I and ensure that all company segments thrive equally. For example, awareness of how well ex-pats, parents, young people, etc. thrive. This can support you in creating a high diversity workplace by making the organization attractive for all segments.
9. Onboarding analysis.
A great onboarding experience is crucial for getting new employees up to speed, making them feel welcome, and retaining them for a more extended period. People Analytics helps you measure how well your onboarding program works so you can continually improve it.
10. Understand exit reasons.
When someone leaves your company, it's crucial to understand why.
People Analytics can help you collect the proper data and automate the process. The typical insight could, for example, be that 60% left because of a bad relationship with their manager, 54% said that compensation play a small role in their decision, or 35% left because they felt a lack of development.
KPIs for People analytics.
When implementing People Analytics, you can measure progress across several KPIs.
And as they say: You can't change what you can't measure.
So getting up to date with the most important People Analytics KPIs is a great first step in creating a better workplace.
Here are some examples of typical KPIs companies look to measure when implementing People Analytics:
- Employee well-being score.
- Employee turnover.
- Employee stress score.
- Unrequested applications.
- The average tenure at the company
- Engagement and job satisfaction
The above are just a few examples. You should consider your organization's specific goals with implementing People Analytics and what KPIs you want to focus on improving.
How does People Analytics work, and what data is collected and analyzed?
People Analytics combines many different data sources (e.g. survey data) and advanced data Analytics. There exist several different types of People Analytics solutions/platforms. Each of these platforms uses various data sources and data analyses.
So it's essential to find the right platform for you and your organization. I will give you a quick overview of some of the available possibilities later in the article.
But first, let's look at the 4 cornerstone data sources that People Analytics most often uses.
4 cornerstone data sources in people analytics.
- Employee master data. For example, name, job start date, position, team, salary, gender, age, etc.
- Employee engagement data. For example, well-being score, stress level, and scores across the drivers for engagement and well-being.
- Employee personality data (psychometrics). Examples of psychometric data could be talents and strength tests like Gallup's "Strength Finder" or personality tests like Predictive Index.
- Employee performance data. For example, how well employees perform on KPIs or how well they perform in a 360 review.
When these data sources are combined and analyzed correctly, they will indicate how you can create a happy workplace. A workplace where people thrive and perform at their best.
For example, imagine that you find that all departments that have an employee with a certain personality trait, like a tremendous coordinating talent, on average, perform 4% better.
Now try to visualize how you could use that knowledge to optimize performance across the organization.
Or let's say that you find that employees with 2 years of tenure in the organization tend to score low on well-being. You can use this information to consider what factors in the organization might cause this unfortunate tendency and try to change them.
Nice-to-have data sources.
Now that we have figured out the 4 cornerstone data sources let's look at some of the optional data sources for People Analytics. The possibilities are almost endless:
4 examples of optional data sources :
- Financial data. For example, how well the financial data is on a company or department level.
- Behavioral data. For example, data on the amount of remote work, how many meetings an employee attends, or how many emails they send.
- Salary/compensation data. For example, you can look at how compensation or lack of bonus affects performance and well-being.
- Recruiting data. For example, the number of applicants, time to hire, time to start, submission to acceptance rate, or applications per job.
What are some of the challenges involved in implementing People Analytics programs successfully?
It's not hard to implement People Analytics in your organization, but you must be aware of a few things.
Deciding what data is nice-to-have for you…
When you have decided that you need People Analytics, it's time to consider which data sources are relevant to your organization.
Suppose you want to know how employee engagement affects financial performance. In that case, you must include financial data in your people Analytics system.
But be aware of what is highly relevant to your organization. If a data source is not highly relevant, you should not include it. If you have too many data sources, you enhance your risk of drowning in irrelevant data that blur the bigger picture.
So, when deciding which platform or solution is right for your organization, it's essential to consider your organization's complexity, needs, and size.
Ease of use and adequate processes...
Turning the data into actionable insights is not always easy. Data can be complicated; consequently, it must be presented so you can use it without being a data nerd. Therefore, choosing a people Analytics platform you feel comfortable using is crucial. Our People Analytics platform includes a monthly consulting session with one of our professional people strategists. We do this to help our customers get the maximum output from our People Analytics tool. This allows them to create initiatives based on our experience and previous learnings that fit their needs.
Getting management to buy-in…
The executive level in your organization must support the idea to make it a success. Try to display both the financial and the human benefits.
Getting employees excited about it…
Getting buy-in from the executive level is crucial. But, it's just as important to clearly communicate to all levels in the organization that implementing People Analytics is about creating a happier workplace for everyone. Try to communicate that well-being is a shared project and that everybody takes responsibility when they take the time to, for example, answer a survey.
Ensuring 100% anonymous survey data...
You might not want to tell your boss that you're unhappy with your working conditions and that you could never imagine recommending the company to a friend. But as a leader or an HR professional, this information is crucial. We found it essential to ensure that all answers are 100% anonymous. You can't expect employees to give honest answers if they are not.
Designing processes that actually work…
What is the organizational goal of implementing people Analytics? How often should you look at the data? How do you connect the new People Analytics tools with the general strategy, and how can we incorporate it into our everyday workflow?
These are some of the questions you should figure out when implementing People Analytics.
Supporting managers to do their part…
The managers in the organization will need support and education on how to use the data from the Analytics. Ensure they get an introduction to the platform to get them started using the data they receive on their team.
3 enterprise examples of People Analytics in real life.
Google is an example of a company that has developed and incorporated a very complex and comprehensive people Analytics system. Back in the day, Google was not convinced that managers positively impacted business. Therefore, They started their people analytics project, "Project Oxygen," in 2009 as they wanted to question if managers mattered to team performance.
They started to collect different types of complex people data and combine it with performance and financial data to answer that question. As you can imagine, Google did not find that managers don't matter. They found that even a slight increase in the quality of the manager led to an increase in team performance, lower turnover, and overall greater satisfaction.
Microsoft also works distinctly with People Analytics. In 2019 they launched their "Manager Hub" internally. It's a platform that collects all sorts of data across the organization. It gives the managers recommendations on what to do and why to do it. For example, reminders on having 1:1 with employees or finding a buddy for the new hire starting next week.
It could also be asking the manager if they have taken the new manager class? And reminding them that the numbers show that they can expect to increase the well-being in their department by 10% by taking the course based on other managers' performance after taking it.
Nasa is an industry with a crucial need for rare data science skills. Therefore, their People Analytics is centralized around talent mapping. Using Noe4j technology, they can see advanced connections between people, skills, and projects.
This, for example, enables Nato to identify skills, connect employees to training programs, and create greater alignment in the organization.
What if you aren't the Google or Microsoft of the world?
Even though it could seem that this data collection and analysis is reserved for big companies, this is no longer the case.
The future of people Analytics appears to be for all kinds and sizes of companies. The employees of a company are more and more commonly recognized as the most critical asset of an organization. Therefore, it's likely that most industries will adopt an increased focus on employee well-being and sense a need for better people tools. Tools that can assist them in creating a happy and more effective workplace.
4 solutions depending on size and needs:
Solutions for small to medium-sized companies (typically up to 1.000).
- DIY with Google Forms, Spreadsheets, and PowerPoint. Suppose you want to build something yourself and only need the absolute most basic functions of People Analytics. A spreadsheet can be an acceptable solution. Keep in mind that this is time-consuming, and it's hard to analyze and visualize the data.
- Zoios People Analytics. Don't want to build it yourself? Zoios is a great prebuilt People Analytics platform that comes out of the box with the essential features small to medium companies are looking for. Zoios automatically collects, analyzes, and presents the data in an easily accessible way. Furthermore, you can effortlessly give your managers access to the insights without creating and sending pdf files.
Solutions for Large or enterprise companies (+1.000 employees):
- DIY with a SQL database, Tableau, or PowerBi. Large or enterprise companies might have very special or specific needs. Wherefore it makes sense for them to build their own people analytics system. Here advanced data platforms like PowerBi come in handy. Be aware that this is a long and highly complex process.
- Visier People Analytics. Visier can be an excellent platform for large companies if they don't want to build their own People Analytics. You can incorporate many different data sources into and analyze data and identify insights. They target companies like eBay and Ford.
People Analytics for all company sizes.
In recent years, we have seen a trend of new people Analytics platforms that create better workplaces by making people analytics accessible for all company sizes.
The field is rapidly developing, and we recognize that it can be challenging to stay updated. Nonetheless, I hope this blog post gave you an overview of People Analytics and how you can incorporate it into your organization.
If you want a further introduction to People Analytics, feel free to contact us. We would love to tell you more about Zoios People Analytics and how your organization can benefit from People Analytics.