How To Build A People Analytics Practice In The Enterprise
By Dan Harrison, PhD - February 27, 2019
People analytics has become a buzz phrase over the past few years, often used interchangeably with HR analytics, but there are some subtle differences between the two terms. While HR analytics are oriented toward workplace metrics, people analytics can be broader in scope, encompassing data trends external to the business.
What is people analytics?
In the broadest of simple terms, people analytics is about knowing people, which includes how they are affected by things both inside and outside the organization. In the context of HR, people analytics serves as the bridge between organizational strategy and talent. It allows leaders to understand the business opportunities afforded by their workforce, and links the organization’s goals to what people are doing in the business on a day-to-day basis.
Comprehensive people analytics practice relies on data from a number of streams. These can be grouped into two categories:
- Passive data: Information that can be collected passively, such as who called, emailed, or met with whom and how often.
- Active data: Information that is gathered through asking, through surveys, focus groups, or interviews.
People analytics relies on analysis and comparison of both types of data to enable predictive capabilities. This is another element that differentiates HR analytics from people analytics. While the former is descriptive of the current status quo in the organization with regard to performance, management, and other metrics, the latter uses that information in combination with additional data to make predictions about future trends, thus enabling leaders to get ahead of the curve.
Good people analytics practice is built on an understanding of business problems, strategies, goals, and vision. To see how Perceptyx surveys are customized to collect the data you need to answer your company’s most pressing questions, sign up for a demo today.
Why People Analytics Matter
With the rapid pace of change in business, having predictive insights to put your company ahead of the curve is a big competitive advantage. Knowing your organization’s strengths, opportunities, and barriers to strategic goals can help you quickly identify areas for action.
This is extremely important in the war for talent in a tight labor market. If you don’t have a people analytics plan that allows you to know your key talent, attrition poses a huge risk to your business’ ability to execute strategy.
Predictive analytics provides critical information to managers and stakeholders for increasing retention. In addition to delivering insights about challenges and opportunities, it allows a forward-looking approach to resolve potential problems before they can occur. For change management, predictive analytics allows teams to be quickly assembled, identifies the right people to bring on board, and, through Organizational Network Analysis, identifies key knowledge brokers and influencers in the organization who should be kept on board during mergers or downsizing.
How To Build A People Analytics Practice
Some have the misconception that building a people analytics practice starts with hiring data scientists. This is the wrong approach; a practice of value to the organization needs to begin with stakeholder alignment and clarity about principles and vision of what the business needs to be successful. Using a team approach, leaders, HR representatives, project managers, and data scientists can align the vision around helping the business solve its problems. By identifying challenges such as needed changes, new product line introductions, competition, and where the business needs to be in the future to remain relevant, data analysts can evolve an approach that is tailored to achieve that vision.
Through testing and building out new concepts and procedures, working with leaders to devise solutions, and then testing those solutions with stakeholders to make sure it is helping the business solve problems, data analysts provide the information needed to prescribe and measure the effectiveness of solutions to the problems identified by the team.
Effectiveness depends on knowing the consumers of the data as well. Managers may not have an understanding of AI or machine learning, and regression analysis is a foreign language to most people outside of data analytics. It’s important to consider how data is communicated back to those who will use it, and speak to them in language they understand.
People Analytics Relies On Multiple Data Sources
In addition to survey data, people analytics relies on passive data, such as communications metadata. This metadata illustrates who is emailing, calling, or meeting with whom and how often, and can be used in Organizational Network Analysis (ONA). ONA spells out connections within the organization and shows how people interact—useful for understanding how work actually gets done. This type of data is especially useful when embarking on big organizational change, since it identifies key knowledge brokers and influencers. (A number of emerging passive listening technologies raise privacy concerns or risk overkill. These issues should be carefully considered before adoption of the more invasive social monitoring applications.) In addition to tracking metadata on email and phone calls for ONA, passive data can include information collected from:
- Social networks
- HR operational data
- Messaging apps
- Business outcome data (sales, revenue, product performance, and customer experience)
- Learning management systems
- Performance management systems
- Department of Labor (BLS data)
- Other external sources of benchmark data
The challenge is to bring all this data together into a single pool with the data collected from active streams—annual surveys, onboarding and exit surveys, and pulse and engagement surveys. Without consolidating all of these data streams it’s hard to do much with people analytics; correlations and trends are difficult or impossible to see when the data is disconnected. When all the data can be assessed at the same time, it becomes much easier to understand the ROI of people analytics in relation to the business.
5 Recommendations For Building A People Analytics Practice
Collecting the right data provides a solid foundation for your people analytics practice. Perceptyx surveys are customized to collect the data you need to solve your company’s most critical problems. Sign up for a demo today.
How Do Surveys Support A People Analytics Practice?
Though emerging technologies for passive data collection are receiving a lot of attention at the moment, people analytics is not like a pendulum, where the active and passive data streams swap places in importance according to the latest trends or theories. Passive data is informative, but ultimately, limiting. It does not offer understanding of employee perceptions and experience. As such, surveys are still one of the primary sources of data for building a people analytics practice. Emerging trends will continue to be explored but will never replace the richness and insight of survey data.
A well-defined survey which asks employees about their experience is incredibly powerful for understanding the risks and opportunities for creating an environment to foster high performance. (Tweet this!) Ethical questions are not at issue with surveys, because people have the opportunity to choose to participate and the expectation of confidentiality is clearly communicated. By participating, the employee is granting permission to use the data he or she has provided.
As such, the survey is at the center of a comprehensive people analytics practice. It is much more far-reaching in terms of the topics that can be explored, including inclusion, teamwork, communication, leadership, and other elements of the experience. By virtue of design, the survey opens up the practice to an entire range of topic areas important for connecting business strategy to people and their experience in the organization on a day-to-day basis.
Just as the entire people analytics practice is based in clarity about the business’ principles and vision, survey strategy also needs to meet the business where it is to address its challenges and needs. This represents another advantage over passive data, which can be collected but not prompted. Knowing at the outset that the survey is the centerpiece to people analytics practice prompts thoughtfulness about the areas that need to be explored, so the right questions can be asked of the right people at the right time.
Finally, don’t forget that the survey can be uniquely leveraged to communicate messages to employees, which can’t be done with passive data collection. It can serve as one side of the organization’s internal communication.
How Can People Analytics Data Be Used To Make An Impact In The Business?
The most important thing that can be done to ensure a useful people analytics practice is to start with an understanding of what the business needs and what data consumers inside the business need to guide decisions.
At Perceptyx, our approach is to start with an understanding of your company and your most critical needs, and build a strategy to address them. Through survey design customized to address your biggest concerns and insightful data analytics, we can help you build a people analytics practice tailored to your unique concerns.
We communicate our analysis clearly through dashboards, visuals, graphs, and charts, and by spelling out the ramifications related to taking action or not, so all stakeholders can use the data for positive impact. Ongoing conversations with employees, teams, or workgroups to strategize interventions to issues revealed by the data also yields positive impacts.
In addition to the goal of problem-solving, the streams of data we collect can be used to:
- Inform learning and development strategy
- Provide proactive recommendations and nudges
- Send emails flagging predicted issues for intervention
- Flag the need to revise intervention strategy
- Identify training needs
- Improve the overall employee experience
Organization and strategic alignment are crucial to building a people analytics practice. The plan and the data collected need to lead to action. Instead of focusing on data, ask “How do we build something that will get the insights we need? What information do we have already, and how can we organize it and blend it to gain additional insights?” Ultimately, it comes back to the questions the organization most needs to answer and collective thought about the problems the business needs to solve. By focusing on those needs, Perceptyx ensures that your people analytics practice takes the right steps to get the insights it needs, and communicates them in the right way to spur action and conversation within the organization. At Perceptyx, we know that people analytics is not just about analyzing data; it’s about strategic design and planning for desired outcomes.