People Analytics: Strategic Talent and HR Management for the Data Economy

December 19th, 2019

As the holiday season approaches, there’s a topic that probably appears on most HR pro’s business wish lists—reporting and insights that are more of a benefit than a hassle! According to reviewer feedback, reporting capabilities are frequently the lowest-rated features for the leading HR management software.

Fortunately, HR and talent management software developers are doing their best Santa impression with better support for the next evolution of HR reporting, people analytics, in their products. People analytics is the consolidation and use of data to solve people-problems and answer personnel-based questions for businesses. Some research says it can yield massive ROI for businesses when deployed well.

As I’m sure you’ve noticed, these are all fairly broad statements, because what people analytics looks like in practice can vary dramatically based on your business’s size and particular needs. However, there are some common themes across the field that can help you determine what benefits you can get from people analytics, as well as how much work it takes to implement.

The problems people analytics can solve

People analytics can benefit both your HR department as well as the broader company. For you HR professionals out there, people analytics provides a more robust method of demonstrating value added from HR in your company. I’m sure no one here is stranger to the stereotype of HR as a “soft” or “gut-driven” field. People analytics’ focus on quantitative results with a strong data narrative to support those results can counter those stereotypes in a quant-obsessed business world.

People analytics also make it easier and clearer for you to demonstrate the impact of HR processes on HR-related business goals. For instance, insights from HR analytics can demonstrate improved retention, employee satisfaction, and growth in diversity and inclusion over time, among a host of other HR priorities. Not only can people analytics speak the broader business language, but it can make do so to make you look good!

There are broader benefits for other areas in the business. People analytics can deliver actionable insights for every aspect of the employee lifecycle, from more effective recruiting to higher retention to greater employee satisfaction.

The skills you need

There are some valuable skill areas you should include in your HR team to get the most out of your people analytics. Here are the knowledge areas that many experts say you should prioritize:

  • Some HR background—having the background knowledge and/or experience in HR provides the base context on which a lot of people analytics is built. However, people analytics at its best should transcend traditional HR domains, so prior knowledge won’t be enough to carry you through the whole process.
  • Organizational/work psychology—data in a vacuum isn’t very helpful. Your role as the data user is to contextualize the data and couch it in what we know about employee performance, engagement, and motivation. Knowing the existing literature, as well as what new developments are occurring, is a key component in turning data into insights.
  • Business background—as a more strategic HR function, people analytics intersects closely with other business goals and processes. Prior business experience can make integrating your people analytics with broader business goals an easier and more effective process.
  • Data science—this is an incredibly broad field, and your interaction with it depends both on the complexity of the questions you’re asking and the user-friendliness of your HR or talent software. That said, having more statistics and programming knowledge will generally make your analytics life easier, whether it’s all Excel-based or relies on other specialized tools. Specific languages and techniques in the long-term may be less significant than understanding the foundational aspects of stats and programming logic. Even in people analytics, data science is a rapidly evolving field, so be ready to continue your education over time.

The exact recipe of skills you need can change by business and over time, but you’ll usually need some aspect of most areas. Even if some knowledge bases are not mission-critical for you, you would still benefit from having each of them represented in your team.

The software that can make life easier

As previously mentioned, HR management and talent management software developers have been building out their people analytics offerings, sometimes under names like “workforce planning” and “HR analytics.” However, people analytics is still a maturing field, so you’ll need to do some work to make sure that any given software has the analytics capabilities that you need.

The first topic you should explore is how well the product can integrate with other HR software. People analytics as a discipline is effective because HR data has become more centralized and accessible than ever before. However, if your setup doesn’t have that kind of accessibility, your insights are hamstrung from the start. Businesses point to a lack of access to data as their biggest obstacle to overcome in people analytics—even more frequently than skills gaps! If your business has more work to do on this front, reviews are a great place to see how well a software would integrate with other systems you use.

Second, ensure that the product actually has full analytics functionalities beyond HR reports that are rebranded into “HR analytics.” There isn’t great uniformity on how various words are used or defined yet, so they can all become buzzwordy if you don’t have an idea of what specific people questions you want to answer via analytics. Start by understanding these questions, then drive the rest of the analytics process, and the software capabilities you need, on that understanding.

Keeping up with the curve

People analytics is still an evolving trend, but they’re quickly becoming a standard strategic function for businesses. According to some experts, “if businesses aren’t using HR analytics platforms, you’re behind the curve. HR isn’t a soft-skills profession, it’s way more analytical.” To find out how other people have used people analytics in talent management products, check out their reviews on TrustRadius! If you’re new to the talent management field, you can explore our primer on the area and the software that enables it.