It is not surprising to see the data from Deloitte 2023 Global Human Capital Trends survey reveal that most business leaders (83%) believe using people data is important to their organizations’ success. Many business leaders also believe that people data holds the key to building trust and confidence among employees. However, only 19% believe they are ready to do so as they do not know how to analyze or apply data. Organizations that did implement people analytics, to achieve specific objectives, have found resounding success.

83% of the business leaders believe that using people data is important to their organization’s success. Only 19% believe they are ready to do so.

- Deloitte 2023 Global Human Capital Trends survey

How industry leaders use people analytics

When the American multinational Johnson & Johnson was looking to improve both employee performance and retention, they applied people analytics wisely. Prior to using analytics, their recruiters were prioritizing candidates with a greater number of years of job experience in the industry. This decision was based on the assumption that these experienced candidates were more likely to stay longer with the company. Another notion supporting this decision was that the experienced or lateral hires would be quicker to make significant contributions to the top-line. By relying solely on the above assumptions, the company witnessed a 10-percent decrease in new hires who had recently graduated from college.

To go beyond these assumptions and take fact-based decisions, the HR and the people analytics team analyzed data on 47,000 employees. They tested the link between experience and turnover which revealed that employees hired right out of college remained with the organization “significantly longer” as compared to more experienced candidates. The people analytics also found out that there was no significant difference in the contributions made to the company between the two groups. As a result, Johnson & Johnson’s two-year leadership development program is now geared towards reducing the gap in hiring fresh graduates.

The above is an example of what organizations seek to achieve by using people analytics. With that in mind, increased number of CEOs and CHROs are being asked to report on pay equity, diversity, and skills gaps (among several other critical parameters) to drive organizational success. This also entails taking evidence-based decisions to prepare succession plans, learning and development plans, deciding changes to reporting structures, as well as rolling out rewards and benefits programs – the goal is to measure the overall well-being of employees.

Using people analytics to empower HR

  1. Plan future skills and hirings
    People analytics helps point out the skill-gaps that exist in the view of future or upcoming roles. Skill-gap analysis aids recruitment or talent acquisition teams in their lookout for the right-fit talent in the jobs marketplace. It is a steppingstone for building a pipeline of talent.

    These insights are immensely helpful for recruitment or talent acquisition teams to forecast time, resources, or avenues (like hiring external agencies) required to hire new talent. They can analyse the spend required on hiring avenues and determine overall cost of hiring for any vacancy. Once all these parameters on the future roles and requirements are analyzed, the HR team can then recommend the kind of hiring model that would suit best to the existing talent requirement. To ensure project profitability, the team can outsource a particular role; or look for contractual hires; or have more full-time employees.

  2. Measure idea signatures of employeesProject teams have a heterogenous mix of various traits that each team member brings on board. The traits most crucial can be identified and encouraged within the team by tracking it through people analytics. For instance, most idea generators apply their learnings from one project to another one. A solution created for a particular project becomes an inspiration for a product for another project. Such generators usually communicate their ideas actively and are not bound by their own immediate circle.

    A good people analytics platform can track such traits and uncover the patterns, hence highlighting the individuals exhibiting the trait. This can also be linked to the learning and development requirements to groom the future leaders of the business.

  3. Measure the impact of training and up-skilling programsPeople analytics can help measure the impact of training and upskilling of employees. Analytics, for instance, could help evaluate employees’ ability to apply the learning from upskilling programs to deliver a particular project on-time. This data, when analyzed with the utilization rates for delivery teams, conversions for sales teams, revenue increase etc., can highlight how employees utilize their acquired skills or the training to drive positive business outcomes.

    For example, when a sales training session is held with the sales team, performance-based people analytics can help HR measure each participant’s impact on the delivery of their key result areas (KRAs). This visibility will answer questions for HR teams, like – is there is an increase in the number of closures, increase in the sales pipeline, decrease in the length of sales cycle, etc. Analyzing employees’ performance insights can eventually show what any employee would require additionally for delivering expected outcomes. These insights can also help identify the right candidates for additional training to groom them for upcoming roles.

  4. Identify future leaders and groom themPeople analytics plays a key role in identifying the next line of leaders in the organization. Analytics can help identify who in the workforce has the aptitude, and propensity to learn or prepare for future leadership roles. It can show who in the workforce is receiving consistent positive feedback from fellow team members, managers, and clients. By having a mechanism to record feedback accumulated from diverse sources on key traits required, it would help form an un-biased analysis about who is taking a lead with proactive problem-solving in a project-setting. Once identified, these employees can be placed under separate training modules to be groomed for future leadership roles.
  5. Develop a skillset-based approach for hiringQuite akin to the example of the American multinational Johnson & Johnson shared above, analyzing skillset proficiency can help filter quality applicants. People analytics can highlight critical skills required for the success of a particular role. With this insight, the hiring can now focus on creating an assessment that highlight the proficiency in the skill through a scoring system. These scores, together with in-person sessions, can help HR and hiring managers take a data-driven approach, instead of a hunch-based speculation for hiring talent.

    It would also help the organization to set skill benchmarks and ensure a quality threshold is in place for future hirings and internal movements.

  6. Tackle challenges related to pay-gaps and incentive disparitiesWhile incentives and pay parity are usually performance and marketing driven, a lot of softer skills that are crucial to the success of the role get ignored in the process. People analytics can help factor in those pieces and create a comprehensive case of incentives and pay parity, based on data and insights. Parameters including level of the employee, past performance, team chemistry, institutional knowledge, tenure, leadership qualities can be used to identify the incentive plan.

    The ability to derive these insights holds the key to form any justification for change in compensation structure and plan incentives bonuses or rewards. These insights are required to show how any strategic change impacts employees in the long run as well as in the near term.

  7. Analyze employee engagement and job satisfactionWhile employees and managers work remotely, people analytics can help assess employee engagement at work. People data and analytics can identify cases of employees with falling engagement levels whereby they may require additional focus and help that can boost their productivity.

    It can also help identify employees who are likely to be at the risk of a burnout. Here, by using people analytics, talent management teams can compare past and present-day performance of the employee to measure the impact of any changes, related to tasks and routines.

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On an average, any medium to large corporate can end-up having five to seven different systems of record to manage or collect people-related data. There is valuable data stored in systems associated to payroll, learning, recruiting, performance, engagement, and wellbeing, among many others. However, it is not enough to just have people data; stakeholders must have the tools to derive insights with ease and act on the insights.

What project-based businesses need is the ability to integrate people data easily and in a manner that helps different stakeholders in the organization uncover crucial insights. Equipped with data, organizations can then improve the way they identify, attract, develop, and retain talent. HR teams need to make the data work for them.

The journey from raw disconnected data to a connected single version of truth can help businesses capitalize on their data and chart HR journey towards desired business outcomes.