In the age of digitization, data collection and analysis have emerged as indispensable elements for organizational success. People analytics is a powerful tool that empowers you to steer your decision-making with data, anticipate workforce requirements, gauge the efficiency of existing HR strategies, policies, and much more.
Despite people analytics' advantages, many organizations have yet to implement it into their workflow. This hesitance largely stems from a scarcity of relevant data and a potential lack of expertise in effectively interpreting the data they possess.
While data collection, storage, and analysis tasks might appear daunting, with careful planning and a clear sense of purpose, you can profoundly reshape your approach to business planning and provide transformative opportunities for strategic advancement.
What Is People Analytics?
People analytics, also known as HR analytics or workforce analytics, uses data-driven insights to inform and optimize various aspects of human resources (HR) and talent management within an organization. It involves collecting, analyzing, and interpreting data related to your employees and their activities to make informed decisions that enhance workforce performance, engagement, and overall organizational success.
People analytics aims to help business owners and leaders better understand the patterns and trends within their workforce, leading to more effective strategic planning. By analyzing data related to employee demographics, skills, performance, engagement, turnover, and other relevant factors, organizations can gain insights that can help them address challenges, allocate resources efficiently, and identify opportunities for improvement.
How People Analytics Benefit Your Business
As a business owner and leader, you’re constantly making decisions that impact your team and the entire organization. While your instincts undoubtedly lead to crucial judgments, utilizing data can expedite your decision-making process and potentially reveal areas for growth. People analytics can:
- Minimize hiring mistakes: A poor recruitment decision can lead to costs equivalent to almost 33% of the employee's initial salary. People analytics can optimize your hiring process by pinpointing top-notch talent that aligns seamlessly with your company and the job role. By dissecting your historical hiring data, you can gain deeper insights into the combination of technical and interpersonal skills needed for a successful hire.
- Enhance performance management: By detecting patterns in employee performance, you can forecast potential issues and create tailored growth strategies for employees facing challenges. People analytics equip you with comprehension factors that lead to exceptional performance, so you know which resources are needed for your team to flourish.
- Boost employee engagement and retention: People analytics offers a window into employee contentment, gauging levels of employment, and spotting factors that lead to unmotivated staff members. This insight can be invaluable in recognizing areas that require attention, enabling you to take proactive measures to cultivate a motivated workforce.
- Learning and development: Utilizing data empowers you to pinpoint skill gaps within your workforce more accurately. Additionally, it allows for a concrete evaluation of the effectiveness of your current learning and development programs. This, in turn, enables you to make informed adjustments and cultivate a more skilled and adept team.
- Diversity equity and inclusion (DEI): Data can help you assess where your company stands regarding diversity, equity, and inclusion. It can help you find pay disparities, understand your current demographics, and identify improvement areas.
- Workforce planning: Analyzing your organization’s trends and patterns regarding employee turnover can help you predict your future talent needs. Data can help you get a head start on hiring so your business is never caught off guard or short-staffed.
How To Effectively Harness People Analytics
Harnessing people analytics requires more than just an eagerness to embrace data; it demands a systematic and strategic approach. As your organization starts its people analytics journey, you’ll need to consider several tasks to lay the groundwork for effective implementation and utilization of data-driven insights:
Establish a data-driven culture
The foundation of successful people analytics lies in cultivating a data-driven culture within the organization. This entails fostering an environment where data is valued and seen as essential for making informed choices. You and other leaders on your team must encourage employees to embrace data-driven decision-making and emphasize its role in achieving company goals.
Define data collection goals
While data is crucial, not all data is created equal. It's essential to define clear data collection objectives, which involve identifying the specific areas of the organization where insights are needed the most. Whether it's employee engagement, performance, turnover, or recruitment effectiveness, having a clear focus ensures that your data collection efforts are purposeful and yield actionable insights.
Build a data collection infrastructure
Having a data-gathering plan in place is crucial, which involves setting up the necessary systems and tools to collect relevant information. Implementing surveys, feedback mechanisms, performance-tracking software, and other data sources that align with your defined objectives are ways to build a strong data collection infrastructure. The data should be accurate, consistent, and regularly collected to track changes and trends over time.
Data storage and management
Additionally, you must establish robust data storage and management systems to ensure data security, compliance, and accessibility. Collected data must be in a centralized and secure repository, and proper protocols should be in place to manage and protect sensitive information.
Interpretation and analysis
Data by itself is meaningless if not properly interpreted. Once you have enough relevant data, the next step is to analyze and interpret it. This involves identifying patterns, trends, and correlations within the data to provide insights into the organization's challenges and opportunities. Advanced analytics tools, machine learning algorithms, and data visualization techniques can help uncover hidden insights.
Storytelling with data
The next step is transforming data analysis into a coherent narrative that resonates with stakeholders. Translating data into a compelling story helps leaders understand the implications and make informed decisions based on the insights provided by the data.
Data-driven decision-making
The ultimate goal of people analytics is to influence business decisions with data. The insights obtained should guide HR strategies, talent management, workforce planning, and overall business strategies. From employee engagement initiatives to leadership development programs, every aspect of the organization can benefit from informed decision-making rooted in data.
Iterative approach
People analytics is not a one-time endeavor; it's an ongoing process. Organizations should continuously collect, analyze, and refine their data collection strategies. Regularly revisiting data collection goals, adjusting metrics, and updating analysis methodologies ensures your insights remain relevant and actionable.
People analytics demands substantial effort to truly make a meaningful impact on your business. It's not a venture you can initiate and leave to operate independently. It’s a strategic initiative that should include key members of your staff and undergo continuous enhancement. Despite the initial investment, the advantages of leveraging people analytics outweigh the time spent on setup.
How GMS Can Help
Implementing proper data collection can be an overwhelming task. With your many pressing responsibilities, it can be an added burden you may not have time for. Partnering with a professional employer organization (PEO) like GMS can relieve some of this burden.
GMS Connect, our human resources information system (HRIS), is a software that collects and reports all employee data in a centralized hub. Our system encompasses payroll, benefits, HR, recruiting, performance management, and more - covering the entire HR spectrum from hire to retire in one platform.
The process of collecting and managing data doesn't have to be challenging. Our experts are ready to relieve your administrative workload so you can focus on the aspects of your business you enjoy most. Contact us today, and let us simplify your data collection and analysis process.