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What Is People Analytics, And Why Does It Matter?

What Is People Analytics – And Why Should Your Company Invest In It?

What is people analytics?

At every organization, senior leaders need data to make effective decisions. People analytics provides the necessary structure and processes to collect and analyze data to provide solutions for organizational challenges.

Put simply, people analytics means collecting and using data to understand trends in employee behaviors and the implications for the organization. The reason any organizations engage with people analytics is to uncover insights, and people analytics allows human resources (HR) professionals to make recommendations not based on hunches or guesses, but based on facts and data. People analytics is at its best when it solves real organizational problems.

People analytics goes beyond the “what” to focus on the “why.”

    • Why does my organization have high levels of attrition?
    • Why have we seen a drop-off in employee engagement?
    • Why can’t we recruit experienced talent?

A people analytics strategy can provide objective insights for answering these critical questions.

To adopt a people analytics practice, you’ll need to survey effectively – and make sure you’re asking the right questions. Learn more in our free guide, The People Analytics Playbook.

Creating a People Analytics Process

Business leaders prefer using data to make decisions for a reason: At scale, trusting your gut reaction isn’t especially effective. Many HR professionals have limited experience with data analysis – and forming an approach for people analytics can seem like a daunting task.

Here’s the good news: While HR functions could hire PhDs in data science and buy analytics software, it’s not necessary. A staff of people data analysts or radically changing the way that you work isn’t required to begin adopting a people analytics strategy. Below, we’ll discuss a basic process for getting started.

1. Define the problem you’re trying to solve.

As discussed earlier, the purpose of people analytics is to provide guidance for decisions. What problems are your organization trying to solve, and what data points might be useful for finding solutions?

Right now, the glaring issue for many companies is the Great Resignation – the trend of higher levels of attrition in the wake of the COVID-19 pandemic. If the organization’s goal is to limit attrition, particularly for critical talent, you’ll need to know not only why some employees are leaving, but also why others are staying.

Think strategically about what the organization needs to know. Don’t implement new surveys or take other actions until you’ve clarified your goals. Remember, people data analysis isn’t about collecting as much data as possible; it’s about asking the right questions, using the data to find the answers, and being prepared to take action.

2. Start small, and use data that you’re already tracking.

Your team may be perfectly positioned to adopt a people analytics strategy – after all, you’re already collecting and using data. Human resource information systems (HRIS) track an enormous amount of information about employee trends. If you’re not using that data, you’re missing an opportunity.

For example, your HRIS tracks attrition along with detailed info about each employee who leaves your organization. Review that data to determine whether it contains data points that could help you address your questions:

  • Was the employee a regrettable hire?
  • How much did the company invest in training?
  • How long did the person work for the company?
  • Are you already calculating turnover and retention rates?

By understanding the data that’s already available, you can create a more effective strategy for listening to your employees. For example, if you’re encountering high rates of attrition among highly engaged employees, you might determine that you need to refine your exit survey strategy to find out why they’re leaving – or you might engage pulse surveys to evaluate the company’s employee value proposition to understand why some employees have chosen to stay.

3. Combine data sources to find trends.

To further utilize data from your HRIS and other channels, you’ll need to align the data points. Your survey data might show that your employees have concerns about hybrid work-from-home policies or a lack of opportunities within your organization – but if you can’t map those responses to trends in attrition or engagement, you might not be able to address the challenge effectively.

The greatest value of people analytics is to provide insights that solve real organizational problems. When you’re able to collect all your data points in one place, linking onboarding and exit survey data with census or pulse survey data, you can begin to connect the dots analytically to show why issues occur and when.

Perceptyx can help your organization adopt an effective people analytics strategy.

If you’re not making decisions based on data, you’re guessing – you’re looking at broader industry trends and thinking “that probably applies to us.” By taking a more structured approach, you can ask better questions and find more effective solutions.

When you’re ready to build a people analytics strategy, Perceptyx can help. Our people analytics platform maps HRIS data to other data channels to establish how employees’ needs relate to business outcomes. We can help your organization build an active listening strategy with targeted surveys, allowing HR professionals to address the issues that senior leaders need to solve. Learn more by scheduling a demo or read about how Hitachi used the Perceptyx platform to transform its approach to HR.

Bersin and Associates (2012). Big data in human resources—Making it happen.
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Bersin, Deloitte Consulting LLP (2017). High-Impact leadership [PDF file].
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