In The Future of Work, we explore how companies are transforming to stay competitive as global collaboration becomes vital.
As companies digitally transform and become data-driven, each department and team needs to find its own ways to embrace data and insights to make smarter decisions. Human resources departments in particular have seen a rapid increase in the number of tools available in recent years. HR professionals are awash in hiring and employee data of all kinds. However, making sense of it remains a challenge.
According to a 2020 LinkedIn report, only about 29% of HR professionals report being able to successfully use insights about their people. Given that the average enterprise company now has 15-19 HR systems feeding it information and 85% of leaders say that people analytics are very important to the future of HR, this clearly has to change!
If you’re an HR professional, getting actionable insights out of your HR data is vital to you and your company’s success. The right BI platform can pull together all your disparate data, give you the clarity you need, and deliver the right insights to the right people at the right place and time in their workflows. To understand all this, let’s dig into the BI continuum, understand who benefits from people analytics, and learn some best practices for success on your people analytics journey.
The HR analytics continuum
Again: Today, HR teams are inundated with HR data from a variety of sources. However, every company is at its own spot on the HR analytics continuum, also called the “data maturity curve,” regardless of how many apps are feeding it data.
As you can see from the image, HR analytics usage runs from the operational end through strategic insights to transformational intelligence. As we discuss these stages, think about where you are and what the right analytics and BI platform could do to take you to the next level.
Many organizations already have operational analytics in place for a variety of applications. These could be ad hoc reports that are run in a single application (e.g., your recruiting system) and describe what happened at a certain point in time, or a BI platform that brings multiple dimensions of data from a variety of systems to find correlations, help understand the root cause of an issue, and allow for further exploration. This can be useful in describing your past recruiting and retention efforts or measuring their efficacy, but it stops just short of helping you plan your future actions.
Predictive analytics are the next step in your HR analytics journey. Your BI platform will pull data from your disparate sources and apps to help you get a better idea of what moves to make next. It’s still on you to make that plan and execute it.
HR analytics will always require a human touch. However, in order to truly digitally evolve, every company needs to start infusing data and analytics throughout the organization to streamline processes and decision-making. That’s where prescriptive analytics and assisted intelligence truly start changing how HR professionals do their jobs.
Properly powered with data, the right HR analytics platform can help you go beyond vague ideas about the future to recommending concrete actions, based on data patterns from knowledge graphs. Seamlessly integrating analytics and insights into workflows can include notifications or trigger certain actions in systems based on trends and patterns within the data. HR professionals will still need to use their soft skills and emotional intelligence to work effectively, but an intelligent analytics system can inform and enhance human judgment, helping to reduce the cognitive load and lag time for making important decisions, and contributing to more accurate predictions of outcomes.
Who benefits from people analytics?
Beyond HR professionals, who will spend the most time interacting with insights from your HR analytics platform, other leaders in the organization will want to consume and benefit from people analytics since employees are an organization’s biggest asset and critical to its growth.
As you can see, the front-line HR people will use HR analytics for workforce planning, recruitment, and related activities. However, managers can benefit from their own versions of HR insights to help build, develop, and retain top talent on their own teams.
Managers are concerned with experience, skills, engagement, and retention, among other aspects of employee life. These last two warrant a special mention, as engagement is a key aspect of retaining top talent. It’s imperative that managers effectively use data to understand if their reports are staying engaged or if there are culture/management changes needed to keep the team happy and healthy.
Executives have similar needs around data. They, too, are intensely concerned with finding and retaining top talent to keep the company strong. However, execs often need a big-picture view of the state of HR within the organization. Understanding employee attrition, the costs associated with the overall workforce, and how that compares with revenues is all vital for upper leadership.
How to do people analytics right
Predicting human behavior is hard! This is good news to HR professionals, who can sleep easy at night knowing there’ll always be a need for “humans” in “human resources” departments, but it does little to shake the nagging suspicion that they could be doing more with all their HR data.
Like any BI process, the three main steps to successfully implementing people analytics at your company are planning, execution, and delivery. Let’s run through each step and target the most important elements.
Planning people analytics
Before you start building your people analytics program, you need to understand your company’s specific needs and what problems you are trying to solve. Start by picking a few key performance indicators (KPIs) related to your business objectives and other industry benchmarks that you want to evaluate and use to make decisions. Validate these with your stakeholders to get their buy-in.
Start small! Trying to encompass every element of HR analytics at once is a recipe for headaches and heartaches from the HR team to the data team (and up and down the chain of command). Each facet of the HR journey (recruiting, retention, development, etc.) has its own unique KPIs. Focus on the part of the process you can affect with your existing data and systems. You should focus on building out your long-term people analytics strategy, but when starting out, take aim at a target that you know you can hit and is important for the business right now. Also, make sure to define what success looks like at the outset.
Execution: Standing up your people analytics
For this phase, start by designing your analytics needs, creating analytics mockups, and getting feedback. Then you’ll likely need help from your data team, building a data model that acts as your single source of truth and covers all your information needs to drive your analytics.
Business users will need self-service dashboards that are user-friendly and capture all the KPIs they need to make smarter decisions in their daily tasks (a platform that infuses insights throughout the work process is ideal for this). At this stage it’s important to prepare for additional questions, so make sure your data model allows for this.
Don’t underestimate the value of user testing (or try to short-sell how much time it takes to do it correctly). Make sure you and your colleagues test-drive the dashboards and other means of interacting with data (widgets, apps, etc.) that you’ll be using. Remember: Analytics need to be effortless, almost invisible, for users of all technical skill levels to get the most out of them.
Delivery: Empowering teams with people analytics
Finally! Your data model is set up and user-facing analytics are ready to go. Now you just need to get people to actually use them. No one likes change, even when getting people to use insights from your HR analytics will help them do their jobs better. Focus on the communication plan so people understand “what’s in it for them” and create incentives to encourage adoption.
Modern BI platforms are built to conveniently inject the right insights at the right time and place to smooth the decision-making process for the user, making it part of the user’s day-to-day activities. This can significantly improve adoption and help bridge the gap between insights and decisions for nontechnical users and reduce the time spent clicking in and out of different systems before one can actually complete a task.
That all having been said, whatever you can do to promote the use of people analytics within your team will go toward building a data-driven culture and help everyone understand the value that insights and analytics bring to HR and the company.
Building stronger companies with data
Every company is becoming a data company. This doesn’t just mean you’ll need to find ways to monetize your data and become data-driven in your core competencies. It also means you need to do more with data in every aspect of your functioning: HR, operations, sales, marketing, and more, to drive better business outcomes. HR platforms create tons of data, making them fertile ground for enterprising HR experts who want to do their jobs better and strengthen their companies in the process.
Every dollar spent on HR pays dividends down the road: recruiting better colleagues, keeping them happier, and helping them grow in ways that benefit all involved. The right HR analytics platform can help you do just that.
To learn more on how to overcome some of the technical and business challenges you may come across on your people analytics journey, watch our on-demand webinar: Getting Started with People Analytics.
Sharron Malaver is head of enterprise marketing at Sisense. With over 20 years of experience in B2B enterprise software, Sharron is passionate about helping organizations understand how they can solve their most pressing challenges and deliver better business outcomes with cutting-edge products.