With the changing employee demographics, the rise of team-based organizational models, the globalization of the workforce, and the increasing influence of technology, companies are turning to people analytics to better understand employee data and its impact on business performance.
The value of evidence-based insights
Businesses are realizing the value of evidence-based insights as it relates to predicting and improving performance across the organization, from recruiting—the No. 1 area of focus—to compensation, workforce planning, and retention. And with people costs often approaching close to 60% of corporate variable costs, it makes sense to manage such a large cost centre analytically vs subjectively.
Some organizations are already successfully putting people analytics to work for them. A testament to the power of fact-based decision-making, Google has implemented a fully data-driven HR function and is reaping astounding performance benefits: Google’s workforce productivity has surged, with each employee, on average, generating nearly $1M in revenue and $200K in profit each year.
Roadblocks to analytics implementation
So why isn’t everyone riding the analytics train to Google-level business performance? Despite the proven value of evidence-based decision-making, and 71% of companies considering analytics a high priority (31% rate it as ‘very important’), numerous challenges are hampering companies’ efforts.
Respondents to a PwC survey reported the biggest barrier to effective people analytics was the presence of “multiple unintegrated sources” of people and organizational data. And with siloed departmental structures and disparate data sources, time-consuming and error-prone manual processes are required to massage the data into meaningful analysis.
Data governance is also a huge issue, with only 6% of 2015 PwC Saratoga benchmarking participants reported being “very satisfied” with the quality of their people data. Nearly one-third (29%) cited poor data quality as a top barrier to successful analytics. Data governance—the availability, usability, integrity, and security of enterprise data—also brings to light the challenge of ensuring the privacy and confidentiality of employee data.
Embrace the possibilities of people analytics
Armed with meaningful people analytics from the complete employee lifecycle, organizations can gain visibility into a broad range of employee behaviours and trends, influencing decisions around process and organizational structure. Businesses can consider the application of people analytics for:
- exploring the relationship between productivity, sick leave, overtime, and safety incidents.
- comparing the characteristics between high performers versus underachievers.
- measuring the effectiveness of learning and development programs.
- examining the differences between performance of permanent employees versus contractors.
- investigating the relationship between the employee experience, engagement, and retention.5
- addressing specific business problems, such as sales productivity, fraud, and customer satisfaction.
- understanding the behaviour of teams and how people work together effectively through organizational network analysis (ONA).6
Are you using people analytics in your organization? At Rise, we recognize the value of meaningful people analytics and offer powerful, secure, and integrated reporting—no data crunching required. Learn more at risepeople.com.
Get more insight into how HR professionals are redesigning the employee experience to support the changing needs of their people in our latest ebook: The future of people management in the digital age, part 2.
