March 15, 2016 - What do you think is important for an organization's success? Well, you may say that its product or service(s) should be best-in-class; it should have a well-defined vision and an equally effective mission to realize it; an enviable clientele and more-than-satisfactory top line and bottom line are all required. That's all? Can you ignore the importance of its workforce? Probably, you will not take the risk to say a blunt ‘yes’.
As you know,workforce matters a lot in any organization and therefore, people-related decisions always take the lion's share of its HR-related activities. Earlier, most of these decisions were made based on individual experience, ideas, and intuitions. Quite naturally, most of them were beset with errors, while many were prone to failure. But these things are now past, thanks to the growing popularity of people analytics.
Today, talent acquisition and talent management decisions must be data-driven and evidence centric - people analytics makes these decisions possible. So, talent professionals now can put an end to all intuitions, instincts, and assumptions in HR practices.
Organizations across geographies and industries are gradually embracing this latest HR concept. Deloitte University Press’s ‘Global Human Capital Trends 2015’ has revealed that 3 out of 4 companies accepted the importance of people analytics.
In a recent pulse survey, a whopping 86% of PwC Saratoga participants have revealed that building or advancing their people analytics process is a key priority for the coming 1-3 years. Further, 46% of these organizations already possess a people analytics function. So, quite understandably, people analytics is taking center stage in the modern HR realm.
If you are already using people analytics, then you must know how it works. However, if you aren't, the following are some insights into the crucial stages.
Michael Housman, Chief Analytics Officer of Cornerstone OnDemand, has defined four stages of people analytics.
Ad hoc question answering: At this stage, Excel spreadsheets or various data sources are pulled together to find answers to some targeted questions. Since this analysis is mostly standalone, it cannot be used for other questions. For example, “How effective is my referral program?” “From where do I get most successful talent?” and so on.
Retrospective data analysis: At this stage, all data are pulled into a centralized location and the retrospective analysis is conducted by using some basic statistical methods, including line graphs and correlations. Many organizations prefer using human resource dashboards or business intelligence platforms to conduct this process.
Predictive analytics: Like the stage two, at this stage, all data are pulled together into a single, centralized location. However, at this stage, high-end techniques, such as multivariate regression, are used to leverage the predictive modeling.
Experimental design: The final stage is all about experiments and A/B testing to extract various drivers within the talent pool, analyze the most effective interventions, and then use them in real life.
The following are the top three HR areas where analytics is now being used.
Recruitment: People analytics facilitates the recruitment process in more ways than one. For example, you can use it as a “checks and balances” system to remove any bias from the recruitment process. Further, with access to clear data related to a person's characteristics, you can get many other insights, including the applicant's personality and whether or not it matches your organizational culture.
Employee Performance: Similarly, people analytics can be used to evaluate employees' performance. You can determine capability gaps in the employees of the same department and the training required to plug in these gaps. Further, you can use data to motivate and engage the workforce and enhance your company's entire bottom line.
Employee Retention: Want to devise a better employee retention strategy? People analytics will always come as your savior. By collecting and sorting data and information, you can easily study your workforce behavior, find out the characteristics of loyal employees and those planning to leave, and figure out the reasons that make people leave or stay. Further, you can make more thoughtful decisions, devise policies, and improve employee retention using the evidence-based data and information.
Nowadays, an impressive number of companies are leveraging the power of people analytics. For example, Google is using analytics to know more about the impact of each interview and the source of recruitment. Similarly, BP is making use of analytics to assess its training. On the other hand, companies like Facebook, AOL, and Pfizer are analyzing the factors pertaining to talent retention.
Despite these welcoming changes happening in the HR space, most of the companies are yet to use people analytics in their day-to-day work. Lack of skills in people analytics is one of the prime reasons. Although analytics programs can provide a higher ROI, most of HR leaders face difficulty coming up with a proper plan. According to Deloitte, more than 80 percent of HR professionals are less proficient in using analytics.
While HR teams in most of the companies are yet to get the hang of people analytics, many certification and training companies are entering the picture to plug in the gap - their programs have been devised in view of the present market need. Pursuing such a program will help any HR/talent professional build his/her career in people analytics.
So, are you ready to reap the benefits of people analytics? Time has come to give it a serious thought.