What Is People Analytics? An Essential Guide

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Not too long ago, the mention of the phrase “people analytics” would be met with lots of head-scratching and blank stares in the workplace. Fast forward a few years later, and people analytics is at the center of Human Resources. Decision-making about people in an organization is now more than ever analytical and data-based, just like any other management discipline. 

People analytics has also advanced in recent times, moving from reports of HR systems, headcount, vacation leave, and sick leave data to more advanced capabilities such as managing talent and workforce planning. For high-performing organizations, having and utilizing well-functioning people analytics is crucial to winning the war for talent. 

Here’s your essential guide to people analytics with definitions, people analytics examples, tools, and more.

Contents
What is people analytics?
Benefits of people analytics
People analytics examples
How can HR start building People Analytics capabilities?
The future of people analytics
People analytics certification
FAQ

What is people analytics?

People analytics is the practice of collecting and applying organizational, people, and talent data to improve critical business outcomes. It enables HR departments to develop data-driven insights to make decisions on talent, workforce processes and turn them into actionable insights to improve performance of an organization. 

The terms people analytics and HR analytics are often used interchangeably. However, there is a difference. HR analytics implies the data is exclusive to Human Resources. On the other hand, people analytics goes beyond HR and includes finance, customer, marketing, and other data sources. Furthermore, HR analytics is often overused and service providers often only focus on HR solutions instead of holistic people analytics solutions. 

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Below are common sources for data sources for people analytics:

HR Data Sources

As indicated in the above diagram, not all sources of people analytics come from traditional HR sources such as demographic, recruitment, and performance management data. You also need to scour your CRM data, financial data, sales data and link them to your HRIS and other HR data. People analytics does not operate in a silo but rather an integrated part of a larger data capability.

Benefits of people analytics

One of the trends highlighted in Deloitte’s Human Capital Trend Survey is the continued spotlight on people analytics, particularly with the effects of the pandemic and new trends in people data. Furthermore, the survey found that only 56 percent of respondents say organizations have made moderate or significant progress in people analytics in the past ten years. The opportunity for organizations to win the war for talent by having advanced people analytics capabilities is thus tremendous. 

People analytics not only gives organizations a competitive advantage but has multiple benefits, including: 

  • Making data-driven decisions and practicing evidence-based HR – By analyzing hiring data and improving the recruitment process based on that, for example, organizations can increase recruiting efficiency by 80% and decrease attrition rates up to 50%.
  • Shaping organizational strategy through HR interventions – People analytics enables organizations to translate data into action and employ evidence-based practices that help improve the overall organizational strategy.
  • Improved performanceDashboards and trends that highlight specific problems, including collaboration, workload, diversity and inclusion, workplace risk assessments, all contribute to optimizing performance. In some instances, the use of people analytics has nearly doubled employee output and thus performance. 
  • Realizing cost savings – Organizations can achieve this, for example, through reducing turnover and optimized workforce planning. By using artificial intelligence and people analytics, IBM was able to predict with 95% accuracy which workers are about to quit their jobs. It enabled them to address these concerns and work on other areas, such as future hires for at-risk roles. 
  • Closing skills gaps – People analytics allows organizations to understand workers’ current skills, the future skills needed according to business need and thus bridge the talent gap. In this way, you can build a pipeline of talent and create development programs based on the future needs of the business. 

People analytics examples

Many organizations are successfully applying people analytics in optimizing their daily work. Here are a couple of real-life people analytics examples:

Uber

Uber successfully enabled people managers with people analytics, which resulted in greater employee engagement and improved business outcomes. The company achieved this in three steps. Firstly, Uber ensured that the right people had access to the necessary data and dashboards. They empowered managers to have access to their people analytics solutions, and not only the HR. Secondly, the HR team took a user-oriented solution by asking leaders what they needed and then designed their people analytics solutions around that.

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Finally, Uber optimized their employee dashboards to provide clear insights into a specific question. Therefore, all unnecessary visuals and dashboards were removed, making it simple for anyone to interpret and decide. Before, managers at Uber would have a two-week turnaround time for a talent decision because they had to go via HR. However, with real-time data available, they were able to make timely decisions and improve their effectiveness.

NASA

In an organization such as NASA, where specific data science skills are needed, finding talent that fits is not always the easiest. For an industry such as data science, which is not new but is constantly evolving, it can be tricky to navigate.

Through talent mapping using Neo4j technology, NASA is building knowledge grapes to show the relationships between people, skills, and projects. The people analytics project aims to connect employees to training, and identify skills, knowledge, and technology and translate it to make sense.

These various ‘dots’ are connected, and that’s where the knowledge graphs play a role. This allows employees to understand their career path and how to change their careers as well. It also allows for greater alignment of people strategy across the organization. 

Microsoft

Microsoft launched a tool called “Manager Hub.” This is a one-stop hub for managers to get information and is seen as an insights generation platform. The platform gives suggestions for managers to take specific actions and why they need to take those actions.

It contains timely prompts based on real data, such as whether managers have one-on-one discussions with employees and have ‘connect sessions.’ The tool is managed via push notifications which are linked to the work calendar.

What are people analytics tools?

People analytic tools allow for tracking, managing, and analysis of various people data. Have a look at some of the popular tools below: 

Tableau

Tableau is a data visualization tool that is widely used in the HR circles. The products allow you to pull data from various sources and then use a range of tools to create real-time analytic dashboards and visuals. For example, the below dashboard displays employee ratings around the nine-box talent rating report:

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Tableau People Analytics Dashboard

Visier

Visier is one of the most robust people analytics tools on the market. The tool allows organizations to understand everything about their people across the employee life cycle – from the time of onboarding to offboarding. See the below people analytics example of how Visier displays data: 

Visier People Analytics Dashboard

ChartHop

ChartHop has advanced from an organizational chart software to a people analytics solution. The tool provides a comprehensive package, from understanding diversity, compensation, attrition, workforce planning, and all-important HR metrics. Check out an example of a ChartHop people analytics dashboard: 

ChartHop People Analytics Dashboard

How can HR start building People Analytics capabilities?

Your people analytics strategy should always be based on desired business outcomes; otherwise, you’re just building something for the sake of it. Depending on the size and maturity of your organization, your people analytics capabilities will vary.

Here are some steps on how to build those capabilities. 

  • Define your analytics strategy – The first step is to align your people analytics strategy with your business strategy. From this, you need to understand what you want to create and what insights you want to gain. Ere suggests these seven pillars as a starting block to build people analytics capabilities in the workplace:
People Analytics Pillars
  • Get an overview of your team’s capabilities – You need to figure out the existing skillset of your organization. As basic people analytics skills, your team will need to have: 
    • Data governance and architecture
    • Data science
    • Behavioral science
    • Business acumen
    • Change management

Once you have plotted your team’s strengths, you can now start training where there are apparent skills gaps. Besides the hard skills, your training should also contain ‘the importance of data’ and ’emotional intelligence and people analytics. This can be done through workshops, online training, and specialized classes by the data science department. 

  • Fostering data-driven culture – You need to develop a culture where people make business decisions based on data. Instead of ‘gut’ decision making, slowly start to move decision-makers to use more data instead. This requires the necessary data to be readily available and valid to change the culture. It needs to be evident in all HR processes, such as recruitment, onboarding, offboarding, talent management, learning and development, organizational development, and workforce management. 
  • Acknowledge that it’s a process – You won’t build an advanced people analytics capability overnight. With anything new, there will be an initial resistance and complaints, which is natural. It is important to continue to improve and keep adding to your people analytics repertoire. Solution providers are creating new and advanced people analytics solutions every week, so it is essential to keep an eye on what is new and useful. 

The future of people analytics

“Leaders at many organizations acknowledge that what they call their “analytics” is really basic reporting with little lasting impact.However, this is changing as leaders recognize the positive impact of data-driven decisions.

Here are a few predictions about where people analytics is heading in the near future:

  • People analytics is going to create supercharged organizations that can make real-time decisions with high accuracy.
  • HR teams will have to create a balance between technology and the human role. As people analytics advances, HR leaders will be challenged to find the human spirit in the organization and the HR function.
  • Soon, it will be possible for organizations to predict when employees are looking for a new job and who will the future talent be.
  • Language analytics will also allow leaders to ask AI-enabled technologies questions about employees. The best answer would surface by searching an entire database of past employee data and making a decision.
  • Talent analytics will enable HR practitioners to identify and nurture potential future leaders.

People analytics certification

Where to learn people analytics?

One of the most surefire ways is through a dedicated people analytics certification course. When selecting a PA course, make sure that it matches your skill level, is practical, interactive, and provides lots of examples, etc.

It is essential to build up your data literacy. Start using data to drive better, fact-based, people decisions that ultimately benefit both the organization and its employees. As a People Analytics Specialist, you have a full analytics skillset and expertise that will enable you to drive data-driven decision-making throughout HR.

Over to you

Organizations need people analytics capabilities to make better decisions. HR professionals need fundamental people analytics skills to be relevant to organizations. By building these capabilities and skills, both companies and HR professionals will improve their competitiveness.

FAQ

What is people analytics?

People analytics is an emerging field that combines data and different qualitative and quantitative techniques to gain insight into human capital aspects in organizations.

Why is people analytics important for organizations?

People-related decisions are made based on evidence. It improves performance through the data analysis of various important people analytics metrics. People analytics provides vast costs savings for organizations by optimizing employee performance and mitigating risks (e.g., attrition). It also helps organizations understand talent gaps and how to close them. 

How do I start with people analytics?

Start by assessing your current skills around people analytics around these topics: 
– Data governance and architecture
– Data science
– Behavioral science
– Business acumen
– Change management

Consider taking a people analytics course to ensure you close all your skills gaps and become the best people analytics practitioner that you can be. 

Do I need a people analytics tool?

Probably yes. While it is possible to do the work with a program like Excel, it will require a lot of effort if you have a lot of data. A dedicated tool allows you to automate and get things done faster with a greater degree of accuracy. The bigger the organization, the more advanced tool is required. Tableau, ChartHop, and Visier are some examples of people analytics tools worth checking out. 

What does the future of people analytics look like?

More data points, leading to advanced people analytics and faster turnaround on decision-making for business leaders. As a result, Human Resources will challenge managing the relationship between data, machines, and humans. 

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