Building Your People Analytics Team: 6 Tips for Success
Having a people analytics team within your organization enables you to make data-informed HR and business decisions, helping your company perform better. How can you build a solid people analytics team or task force? Let’s find out.
What does a people analytics team do?
Using data to make decisions is paramount in today’s world of business. Companies have always relied on sales, marketing, and similar data, but people analytics has recently become just as influential in achieving goals and staying competitive.
Human behavior and employee data reflect how people impact operations, and the insights can be translated into best practices for a more productive work environment.
People analytics can be grouped into three main types of data:
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- Program data – Attendance, participation in programs, and project outcomes
- People data – Demographics, engagement, and skills
- Performance data – Ratings and other data captured through performance management programs
There are four methods for mining data to answer certain questions:
- Descriptive – What is happening now, and what has happened?
- Exploratory – What insights are in the data?
- Predictive – What may occur in the future?
- Prescriptive – What is the best course of action to solve this problem?
Designating a team to focus on people analytics allows an organization to hone in on what these particular statistics have to offer. The team can gather, consolidate, and sort through the data and use it to better understand employees’ needs and make evidence-based business decisions.
The main responsibilities of a people analytics team include:
- Collecting, organizing, and storing people data.
- Analyzing the data to gain insights.
- Translating the findings into actionable insights.
- Connecting the insights to the business strategy.
- Effectively communicating the insights.
This can be a fully-fledged team, but you can also pull together a selection of your existing employees that will have people analytics as part of their responsibilities. The latter option is especially relevant for smaller businesses. In that case, think about it as a people analytics task force within your HR department.
How to build your people analytics team
Whether you’re building a full people analytics team or starting with a task force, there are certain things you need to consider. Here are six steps to assist you:
1. Clarify your people analytics goals
In any endeavor, it’s always wise to start with the end in mind. Therefore, you need to establish precisely what you want out of your people analytics team and be able to measure its effectiveness.
Think about the real question you are trying to answer. Then, based on your goals, you can shape what your team is going to look like, what skills you need, and how to shape your people analytics strategy.
Here are some examples of what your goals might be:
- Understand the employee life cycle better.
- Create algorithms that are going to help you predict certain things, like employee turnover.
- Evaluate your workforce diversity and workplace inclusion.
- Capture which teams are underperforming to design interventions and close performance gaps.
- Identify causes of absenteeism and discover employee wellness solutions to fill the gaps.
- Source data on company strengths and weaknesses that encourage employees to leave or stay.
2. Decide what skills you need on your team
The skills you’ll be looking for will depend on the type of team you’ll have and what you’re aiming to accomplish, for example, what types of analyses you want to do.
Enterprise organizations with dedicated people analytics teams can seek very specified and in-depth capabilities. If you want to do advanced analyses, it might make sense to hire someone with more refined analytical skills like SQL, R, and Python and help them develop to look at data through an HR lens.
There are various ways to structure a people analytics team, but these are the core roles and their general responsibilities:
- Data analyst – A generalist who engages with stakeholders to understand their challenges and then uses data to answer questions and formulate approaches for solutions.
- Data scientist/wrangler – A computer science and statistics specialist who constructs machine learning data models and interprets the results to discover insights, make predictions, and answer business questions.
- Data engineer – A software expert who builds and enhances systems that can convert raw data into a format that data analysts and scientists can interpret. They also oversee proper data collection and storage and ensure user accessibility.
Smaller companies that are incorporating people analytics into the HR team may need to invest in upskilling a current employee. If you already have someone on your HR team who enjoys working with data, you might want to find out if they want to become proficient in the analytical part. For instance, they could develop their skills and knowledge through a people analytics certificate program.
Some examples of desired people analyst and HR analyst skills include:
- Applicable data analysis experience
- HRIS know-how
- MS Excel expertise
- Data visualization capabilities (R, Tableau, or PowerBI)
- Statistical modeling and descriptive statistics knowledge
- Understanding of SQL tools
3. Foster business acumen in your team members
People analytics professionals who have more than just technical expertise maximize their value-adding potential. Seeing data not only in the framework of HR practices but also within a business context broadens their perspective.
Professionals with business acumen are more aware of how data and HR efforts relate to and impact your company’s operations and decision-making processes. This allows them to better collect and interpret data for effective solutions.
Your team can improve their business acumen by focusing on the following four areas:
- Financial literacy – Familiarity with accounting concepts and business metrics
- Internal environment – Understanding the organization’s objectives, work environment, and products and services
- External environment – Knowledge of economic conditions, competition, and industry outlook
- Political awareness – Grasp of organizational structure, relationships, and areas of influence
4. Empower your team with the right tools
People analytics tools are the backbone of your team’s success because they streamline the work. They consolidate the tracking and analysis, so there’s no juggling multiple spreadsheets.
You can keep your tech stack simple, to begin with. Lay the foundation with an HRIS and an ATS that collect the data you need about your candidates and employees. Ideally, you’ll have tangible results shortly after implementation, so the team will be able to hit the ground running.
In time, you might also want to invest in a dedicated people analytics platform as your team gains more analytical responsibility. When possible, they should have opportunities to experiment with new technologies and attend tech conferences to expand their capabilities and learn about the latest innovations.
You’ll need to do some research to discover which tools will work best for your organization. SelectSoftwareReviews put together an overview of top people analytics tools to get you started.
5. Consider where your people analytics team should be located within the organization
If your people analytics function will be more of a task force than a formal team, it will be housed within your HR department and be people-centered, focusing primarily on HR objectives.
When people analytics resides outside of HR, it has a broader scope. Overall business strategies, not necessarily HR’s targets, influence how workforce data is collected and applied.
Building a full team means you’ll need to decide where it falls in your company’s structure. Here are three types of approaches to the people analytics function within an organization:
- Federated/decentralized – Individual teams are dispersed throughout the organization and serve specific business areas.
- Centralized – A core team that serves the entire organization.
- Hybrid – A core team serves the entire organization, but there are specialized teams for certain business areas.
There is no single definitive way to position people analytics that works for every company. Factors such as size and resources will determine your options.
Regardless of where the function is placed, HR must be able to work closely and collaborate with the people analytics team. The key is to direct the efforts toward business goals, balanced by an HR perspective.
6. Set your team up for success
Giving your people analytics team a good foundation they can build on will put them on the path to becoming a credible function that gets results.
First, help the team and others in the organization understand the value of people analytics. Many individuals take their privacy seriously and will be cautious about how data concerning them is collected and used. Build their trust by being very clear about the reason why you collect the data.
Everyone involved should know that it will be used to uncover what needs improvement and find ways to create a better workplace. If everybody understands the purpose and benefits that will come, they’ll be more eager to get behind what the team is doing.
Next, you’ll want to generate some results fairly quickly for a noticeable win for your team. Start with a small project with data you already have. For example, you can evaluate whether people in similar roles are getting comparable pay across departments.
Additionally, the team should feel supported by a data-based decision-making environment. This type of culture involves moving away from making decisions based on opinions and toward using data insights. It also means encouraging innovation and risk-taking with tolerance for mistakes made during the process.
Nailing it down
Building a people analytics team or a task force is a significant opportunity to foster your company’s competitive advantage. People analytics teams can uncover crucial workforce data to inform decisions and demonstrate HR’s important role in the organization’s prosperity.
When forming your people analytics team or task force, it’s essential that you know what your people analytics goals are. That way, you can make sure that your team members have the right skills and tools to create an impact.