For long, the Human Resource (HR) department has been perceived as an old-fashioned department and people presume its work to be based on mere gut feeling.
Moreover, the role of the HR department has not got the appreciation it should have received. After all, managing people is hardly an easy job.
Organizations tend to focus more on the people beyond the organization and work to influence them. However, the people working for an organization should be looked after with equal care and make them work the way that is beneficial to the organization. This is where the concept of People Analytics steps in.
The HR department of an organization makes use of People Analytics and does the task of managing people for their organization. Apart from looking after new hirings and extending offer letters, the HR department looks after the employees and helps them to work stress-free.
People Analytics is a concept that is generally associated with an organization’s HR department. It is often used interchangeably with the term HR analytics although the two terms are slightly different from each other.
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Firstly let us get an idea about what exactly People Analytics is.
What is People Analytics?
People analytics is technically defined as the deeply data-driven and goal-focused method of studying all people processes, functions, challenges, and opportunities at work to elevate these systems and achieve sustainable business success.
An organization succeeds by taking care of the interests of its stakeholders, be it external or internal. People analytics has come in handy to help organizations in managing people.
People analytics is a data-driven approach to managing people at work. Gone are the times when business leaders had to make decisions about their people based on the relationships they shared, experience, and risk avoidance.
The deep data analysis involved in people analytics allows business leaders to decide on a person’s performance and his/her efficiency. Essentially, gathering and assessing people's analytics leads to better decision making through the application of statistics and other data interpretation techniques.
How does People Analytics Work?
People analytics has evolved over the years. When it was first used in organizations in the mid-1900s, it was more of prescriptive analysis. Now, when we are living in a technology-driven world, people analytics is more of predictive analysis.
The predictive nature of people analytics allows organizations to be better prepared to face the dynamism of their operational environment and be proactive rather than reactive.
The use of technologies like sophisticated data science, machine learning, and interactive data visualization was not a part of people analytics a decade ago.
To live up to the expectations of being intuitive and predictive, people analytics has to go through a process that involves the steps explained below:
1. Dig Data that matters
The first step in People analytics is to determine the core question i.e. “What data is relevant to our business goal?”
Finding the answer to this question sets the tone for the analysis and sets the Key Performance Indicators (KPIs) accordingly.
This step is crucial to perform because you will not want to waste your time, resources, and energy to research in an area that is of no use to you, and digging for the data that does not add any strategic value.
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Figuring out the ultimate goal allows analyzers to start investigating the areas that need direct monitoring, such as operational tasks within the people management spectrum, and can contribute to tangible business success.
Being aware of the areas to focus on also helps to apply the right statistics, data mining, survey management, machine learning, and strategic workforce management tools.
2. The three Es- Explore, Experiment, Enrich
The three Es here helps us to Explore the market, Experiment with different tools, and Enrich the organization with the most effective analytics.
In today’s world, the markets have become more crowded and diversified as well. Thus, people analysts must be exigent with the tools they are using.
Nonetheless, there is a wide scope of experimenting with different options available such as data mining, data transformation, and data visualization techniques. These all are merged into a user-friendly self-service interface.
Platforms that facilitate us with a wide range of options require manual intervention to access important information, most of the time. Systematic experimentation, thus, is required to test all the aspects.
3. Have an Action Plan ready
Once the end goal is decided, relevant data has been chosen, and all the available options are analyzed (clear pros vs cons analysis), the third step in people analytics is getting an action plan ready.
Analysts apply big data and predictive analytics to talent management, leadership management, and organizational capabilities to fine-tune the action plan.
Moreover, having a plan of action enables a better understanding of the changes taking place within an organization. It also allows analysts to understand the direction in which the organization is heading and thus seeking stakeholder support accordingly.
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4. Avoid legal loopholes
While we collect data it is crucial to ensure legal compliance is maintained throughout the process. It is better to set up a legal team that validates all the data sourcing techniques and processes before they are applied to the analytics.
When the raw data has been assembled and treated, the outcomes gathered should also be affirmed before they can be applied or published. In our digital ecosystem, with data protection and privacy laws continuously developing, it is reasonable to stay up to date with the progressions and twofold keep an eye on legitimate consistency.
Steps involved in the process of People Analytics
Steps involved in the process of People Analytics
5. Create leaner systems
The next step in People analytics is creating a simpler and leaner system that all processes must adhere to. Irrespective of the complexity of the project being worked on, a simple system must be created.
The basic process of data analysis and interpretation allows for easy application, updating, and readability.
For example, an outline should be created that has basic steps starting with intake and design (data collection and design of the analysis), data cleaning (separating irrelevant data from raw data), data analysis (qualitative and quantitative analysis), and sharing insights (interpretation and presentation of data).
The benefits of having a simple and leaner system is that it helps avoid complications such as confusion about the flow of steps involved, time wastage, or repetition of processes that generally occur with unstandardized processes.
A simple outline never limits the whole process of people analytics but rather it gives the freedom to experiment and tweak, wherever necessary, in between the processes.
6. Build a fact-based, measurable HR business strategy
Building a fact-based and measurable HR business strategy is an important part of successful people analytics. A realistic HR strategy avoids functional silos and aims at a seamless aligning of talent to the business.
Having clear KPIs and ROI expectations from people analytics endeavors ensures that the impact of the strategy is measured often and with transparency. A winning strategy needs to be backed by data and an effective plan of action.
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7. Take Tech support
Technology has become an inseparable part of today’s world. With People analytics, a process that requires the treatment of the bulk of data with no room for error, technology has to be leveraged.
Making use of new-age HR tech tools makes real-time data easily accessible. The use of technology should be milked as it gives an opportunity to make your business stand apart and ahead of the competitors by being agile and having real-time intelligence.
How are People Analytics and HR Analytics different?
People and HR analytics are often used interchangeably. Both the terms talk about the statistical analysis of data. But are they the same?
Traditionally, People analytics and HR analytics have been reckoned to be the same but with elapsing time people came to know the difference between these two terms.
The term HR analytics is considered too narrow as it focuses only on the people working within the organization. HR analytics specifically deals with the metrics of the HR function, such as time to hire, training expense per employee, and time until promotion.
“I am using people analytics more and more. HR analytics has the connotation that it is about the HR department. This is partly true, but in many cases, you are looking at people characteristics that are not managed by HR but by the business.”
- Patrick Coolen, Manager HR analytics, ABN AMRO
People Analytics, on the other hand, is technically applicable to ‘people’ in general. It can include any group of individuals even from outside the organization. For instance, analytics about the consumers can be termed as people analytics.
Though the term HR analytics has been there for so long, people analytics has already started to take over it in recent years.
We can conclude the blog by stating what we have comprehended about People analytics that it is primarily a data-driven approach to manage people.