People Analytics Strategy: 9 Tips for Smooth Implementation
Having a people analytics strategy enables your HR and/or people analytics teams to approach workforce issues in a proactive way and manage resources effectively. Let’s look at how to build a people analytics strategy with real business impact!
What is people analytics?
People analytics is the practice of using people, talent, and organizational data to gain insights and make more informed decisions about your people strategy that will advance your business.
Collecting and assessing this type of data has previously been referred to as HR analytics, talent analytics, or workforce analytics. However, people analytics is a term that represents a broadened shift in focus.
Instead of just capturing and measuring data from within HR functions, people analytics has a wider scope. It encompasses additional sources, such as finance, marketing, and customer data. Furthermore, it adopts a more comprehensive characterization of who makes up the workforce and what they have to offer.
Organizations are moving toward a fuller people experience and an appreciation for not just full-time employees but all staff categories. Instead of viewing workers as just a number or a tool for getting work done, they are respected as crucial influencers in achieving company goals.
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People analytics goes beyond data about tasks and processes. It must also factor in input gathered directly from everyone about how they feel about their work and why they go about it the way they do.
Why you need a people analytics strategy
Leveraging people analytics can drive business value and make a positive impact on organizations. A purposeful people analytics strategy helps you achieve the following:
- Nurturing employee retention by shedding light on why employees leave.
- Enhancing employee and broader people experience from learning how people best perform and feel like they belong.
- Improving performance to increase productivity by identifying and addressing problems with the workload, communication, and diversity, equity, inclusion and belonging (DEIB).
- Exploring the productivity of your dispersed workforce.
- Achieving cost savings with enhanced workforce planning.
- Identifying and closing skills gaps to generate a solid talent pipeline.
Other benefits of HR and people analytics include creating a safe workplace, enabling internal mobility, and closing skills gaps. In general, a comprehensive people analytics strategy helps your organization achieve its business objectives.
How to start building a people analytics strategy
To effectively implement people analytics, you need an action plan. Here are nine tips for creating and executing a people analytics strategy at your organization:
1. Define the problems you want to solve
Begin by figuring out where you want to end up. Determine specifically what you want to achieve with people analytics and set goals. You can do this by identifying some challenges or opportunities your organization has. Then, pinpoint how data could inspire potential solutions, and which data points you could use. Start small; you don’t have to resolve all the issues and make all the changes at once.
Here are some examples of matters that people analytics can help you with:
- Sourcing data for strategic workforce planning.
- Gauging the time frame for new hire productivity.
- Evaluating strategies for reducing absenteeism and improving employee retention.
- Refining your performance management practices or compensation strategy.
- Discovering which organizational groups have the most or least diversity.
- Uncovering skills gaps.
- Assessing the level of employee engagement after new initiatives.
- Finding the correlation between performance and training and/or pay.
For instance, a disability and mental health charity organization Barnwood Trust wanted to conduct an equal pay review and take a personalized approach to reminding their staff to take leave. People analytics enabled them to adjust pay of some employees. They also implemented a function in their HRIS that indicates when someone last took time off.
2. Link your people analytics to the business goals and outcomes
If you want your people analytics strategy to succeed, you have to make sure that it contributes to the organization’s business goals. It must produce the type of value that leadership can get behind and be in line with the business strategy.
Bring in leadership for input on areas they want to see improvement in. Explain how people analytics can provide the information needed to support methods for creating a better outcome. Once you have their backing, you’ll be able to get support and resources for carrying out your strategy.
For example, if you can link people analytics to the ability to drive better employee performance, there is a clear benefit to the process. Data analysis can display the areas where employees are or are not hitting the target. You can use this information to hone in on where more coaching is needed to help employees work more efficiently and at a higher level.
Or, let’s say you want to analyze employee engagement and show how it impacts organizational performance. Studies have found that there’s a clear link between employee engagement and business outcomes. A 1% uplift in employee engagement leads to a 0.6% growth in sales and a 0.41% increase in customer satisfaction. In this case, you should consider what a boost in employee engagement at your organization would translate to in terms of business results.
3. Review sources of data and look for gaps
Reliable, high-quality data is what it takes to make sound business decisions. You need to identify suitable types and accurate sources of data and how you will gather them consistently. Then you can detect patterns and retrieve actionable facts and figures.
You’re probably already collecting a lot of data through the different software in your HR tech stack. It’s important that you understand what data you do and don’t have, so you can fill in the gaps.
When you have access to the full range of information available, you’ll be able to better solve the problems you’ve identified. This is where you may also need to pull in other data sources from within the organization beyond the HR department.
Getting the right data for people analytics can be challenging. Here are some hazards to watch out for:
- Not focusing on trackable data – You need to aim for what truly matters and can be tracked. When starting out, leave the discussion about what should be tracked for later.
- Failing to track the most important material – You must have well-defined goals and requirements for precisely what information is needed.
- Tracking too much information – Features that track unessential or redundant information complicate the data with minimal to no benefit.
4. Overcome the obstacles to the effective use of people analytics
Building a people analytics strategy has its hurdles, and some organizations struggle to get past the initial stages. Common challenges you may encounter can range among the following:
- Focusing on the wrong issues – As we’ve mentioned, your people analytics strategy has to center on matters that are connected to business goals. This creates a sense of urgency, so you can devote your time and resources to a relevant challenge where solutions will have a meaningful impact.
- Difficulty communicating the value of the data – You need to explain people analytics in a way that business leaders without statistical or technical expertise can understand. Otherwise, you can’t hold leadership’s interest enough to grasp its worth.
- Data limitation and quality issues – If you’re on a limited budget, you may be required to work with the company’s current technology, which may not have optimal capabilities. You’ll have to be realistic about which data you’ll have access to and how much time it may take to extract it from multiple, unintegrated systems.
Overcoming such challenges requires understanding exactly which ones you’re facing, so you can formulate a plan for tackling them. For example, your leadership might not be able to immediately see the value people analytics adds. In that case, prepare a communication plan where you translate your insights into monetary terms. It could look something like, “Turnover costs us (dollar amount) every quarter, and that’s why we need to do something about it.”
5. Build your toolbox
Having the right tools at your disposal is crucial for an effective people analytics strategy. Without the support of operational technology, you won’t have reliable, useful findings to put into practice.
You can begin by evaluating what sources you already have available, such as your HRIS, employee survey data, or applicant tracking system, and how you can use them. Then you can look into new people analytics solutions. For instance, a solid enterprise resource planning (ERP) platform, data visualization tools, or dedicated people analytics platforms like Visier, Charthop, Orgnostic, etc.
Try out multiple products through free trials and find a consultant or vendor who is willing to work with you to find the right fit. Ultimately, you want a user-friendly, scalable solution that meets multiple needs and can integrate with the rest of your tools. Be sure to get input from IT and other stakeholders involved in using or monitoring the system.
However, when you’re only starting out with people analytics, at your organization, you might just use Excel to perform basic analyses. For starters, check out these useful Human Resources formulas and functions for Excel.
6. Turn insights into actions
There is no point in gathering data if you don’t put it to use. Once you have collected and analyzed the data, share your findings with all stakeholders and take action on the conclusions you’ve drawn. Be sure that your report is logical and direct. If everyone can clearly understand the outcomes, they will be more open to adopting them.
Explaining the data in the context of your business goals will illustrate the difference it can make. For example, you can show what it would mean if you decreased turnover by 5% and suggest actions your organization can take to lower the turnover. You could focus on a specific department where turnover is very high and create strategies to retain those people.
7. Create a communication strategy
As we’ve already mentioned, it is essential to communicate the results of your analyses in a comprehensible way to get leadership buy-in and create a sense of urgency for putting the solution into place. You’ll also need to convey certain insights to people throughout your organization. A solid communication strategy is an integral part of your people analytics strategy.
Explaining your findings in a simple-to-grasp way can be challenging, so you may want to seek out some expertise. Someone from either inside or outside your organization with the right skill set to convert complex ideas into clear narratives or visuals could make a big difference in successfully connecting the results to business outcomes. Asking your marketing or communications team might help here.
To make the data more accessible and applicable, you can also create easily readable dashboards for stakeholders to use and experiment with on their own. If they can deploy the data for various scenarios and make their own connections, they will be able to visualize how the data translates into financial impact. That way, it will be easier to get them on board to support your people initiatives.
8. Monitor compliance
A people analytics initiative results in collecting large amounts of data. Some of this is very sensitive, like employee personal information, salary data, etc. Furthermore, employees can be uncomfortable about not being aware of the extent of data being collected about them.
To avoid creating a negative work culture surrounding employee data collection, you must reassure your workforce. Employees need to know that they can trust the organization with their information and are not seen as just a set of data but valued as individuals.
Be sure to demonstrate that your people analytics is all about empowering everyone to be more efficient and not about invading their privacy by surveilling their every move. That’s a common people analytics misconception you need to work to dispel.
Whether your industry is highly regulated or not, you must ensure the organization is staying compliant with all privacy and data collection regulations. An internal vetting process with regular audits to ensure people data is gathered and applied ethically is a necessity.
For instance, you can form a compliance committee with members from multiple departments, such as HR, legal, IT, etc., to establish and monitor your governance policies.
9. Prepare your people analytics function for scaling
If your people analytics strategy works, there’s a good chance that your leadership will want to invest more into expanding the function. That being so, you’re likely to be involved in facilitating how people analytics will progress within the organization.
For example, you might need to decide where the people analytics function will be located within the organization. Will the HR team take ownership, will it be part of IT or another department or even a separate team? In any case, you may need to hire new staff or train current staff to have the necessary people analytics capabilities.
Furthermore, you might need to implement a new people analytics platform that will help you gain more meaningful insights into your organization.
All in all, keep in mind that your people analytics strategy might need to evolve as you scale.
Taking it from here
Data’s role in workforce-related decision-making is going to continue to expand in the near future. HR leaders must be a driving force behind it. Putting a people analytics strategy in place is not an easy feat, especially if you’re just starting out with the function, but don’t hesitate to make it happen.
As you go forward with people analytics, it’s key to have a good understanding of what you’re trying to achieve, how it relates to your organization’s business goals, and what obstacles are in the way. Those starting points will get you underway in creating a value-adding people analytics strategy that will bring about better business decisions and outcomes.