How to Make People Analytics Strategically Relevant

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How to Make People Analytics Strategically Relevant

An idea that I often hear is that “People Analytics should be used for strategic purposes” (or something along those lines). While I agree with the statement in general, I also think it tends to be subjected to tunnel vision. The explanation that I regularly hear is about how one should find analytics cases worth the time by deducing them from the organization’s overall strategy. 

While there is nothing wrong with a top-down approach that takes strategy as the starting point per se, a bottom-up or issue-driven approach could also bring strategic value. In the end, it is about impact and useful results. To get there, both approaches have their merits and pitfalls. In this article, I will present a five-item checklist that you can use to judge a project’s viability and discuss the pros and cons of approaches that put either strategy or issue first.

A mental checklist

In estimating whether a case makes for a viable project, I mentally go through the following checklist: 

  • Leadership backing: is the case thematically relevant to our (top) management?
  • Lasting impact: do we propose a (scalable) solution that addresses cause over symptom?
  • Business case: if we provide the solution, what do we expect to gain from it, exactly?
  • Clear deliverables: what does (the building of) our solution look like in terms of results?
  • Sense of urgency: are people itching to have this solution sooner rather than later?

I like to start by establishing whether our line of thinking about a case or theme could secure sponsorship (leadership backing). If so, we can proceed by ensuring that what we would be working on is forward-looking and not transient in nature (lasting impact), e.g. due to changes in the legislature in the near future that would render the issue moot.

Once that is clear, it becomes worthwhile to estimate what we stand to gain (business case), which forces us to define the problem and potential benefits of a solution. When we know that, we can check to see if we can design an actual solution and approach to get there (clear deliverables), as well as determine if our efforts would weigh up against the business case.

When we’ve checked all of these boxes, one still remains: are people anxiously awaiting our deliverables, and does our sponsor (leadership backing) share that sense of urgency?

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Top-down: strategy-driven

If you are looking for a worthwhile case to work on, deducing one from strategy has clear benefits: with a direct link to strategy, securing backing for your efforts will be easier and you’ll be working on something with relevance to the future of the organization.

Example 1
A public services organization started a multiple-year leadership development program as part of its strategy. Even though it was still unknown what should be analyzed or quantified exactly, the suggestion to use data to assess the effectiveness of the program during and after its run was met with enthusiasm by the directors due to the strategic importance of strong leadership. As such, the people analytics efforts could count on strong sponsorship from the start. Several avenues were explored to settle on a handful of metrics that would still be used after the conclusion of the program.

While Example 1 may not show it, there are also downsides to using strategy as a starting point. The biggest is that there is often no clear problem definition. The fact that most strategies are worded in broad terms that can be interpreted differently from person to person does not help in the matter. Lacking exact definitions, it can be hard to determine and communicate what problem you are solving and for whom, exactly. This leads to the following potential downsides:

  • No clear business case (if the problem is not clear, the potential benefits aren’t either)
  • No clear deliverables (there is a risk of winging it until something useful is found, whatever and whenever that may be)
  • No sense of urgency, making it hard to maintain strong sponsorship (strategy is long-term and high-level, and attentive project backing may lose out to more pressing concerns)

In other words, if it is unclear what the benefits of your analyses may be and what you are to deliver, sponsors may choose to invest their time in other matters instead.

Example 2
A large corporate valued its employees and aimed for internal career progression and high retention rates. The people analytics team, therefore, developed a flight risk model that incorporated career history and showed which profiles were more likely to leave. It was constructed so that follow-up analyses or targeted action would be possible. The model showed promise. It estimated costs associated with flight risk and could be improved depending on how it was to be used. However, one unanswered question was what the retention rates should be exactly, and therefore how much of a concern the identified risks were and to whom. These questions did not need to be answered immediately and so more pressing issues were tackled first. The model was applauded and subsequently put on hold indefinitely.

What sets Examples 1 and 2 apart is the fact that the first identified and tied into an issue: the decision was already made to start a leadership development program with all the costs involved. Analytics came in to provide metrics to help monitor effectiveness and return on investment, which were clear concerns. In other words: business case, deliverables and sense of urgency were all present. 

In the second example the problem seemed clear at first, i.e. how do we improve retention? Because of that the team was off to a good start only to stall when it became clear that the targets regarding retention and flight risk were still a matter of debate. As a result, there were gaps in the business case, no clear direction to pursue for further development (i.e. no clear deliverables) and no sponsor with a sense of urgency to get the model finished and in use.

Bottom-up: issue-driven

In my experience, (people) analytics teams frequently get asked to help when specific issues arise: high absenteeism in call centers, trouble recruiting for technical profiles, estimates on the number of people willing to move to a new location, etc.

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The upside of such requests is that the business case and deliverables can usually be made clear very quickly. Moreover, there is a sense of urgency to ensure involvement of a ‘problem owner’ throughout the project: there is an actual issue to solve and someone reached out for help.

Example 3 – Part 1 of 2
A hospital’s team of nurses was suffering from high absenteeism, contributing to understaffing. Costs were on the rise and put pressure on the budget, in part due to hiring temps. Difficult decisions had to be made to ensure the quality of care. The manager had already reached out for help to the HR Business Partner. After initial attempts to turn the tide, an analytics team was asked for help so that continuity and quality of care could be maintained long-term.

Whereas a case with strategy as a starting point may lack a sense of urgency, the biggest pitfalls of the issue-driven approach are due to the desire for results on short notice. The focus can fall squarely on the question at hand, introducing the following risks: 

  • Poor lasting impact (working on a localized solution or patch, rather than a scalable and forward-looking solution)
  • Limited leadership backing (it may not be clear how the issue is relevant to the greater organization nor how it relates to strategy)

If you consciously address the two risks above, you can get a good indication of whether the question at hand makes for a worthwhile case, from a strategic viewpoint. If a scalable solution with clear ties to the organization’s strategy is plausible, there is a strong case for taking on the project even if it seems like an operational issue at first.

Persistent operational issues will generally have developed over time and become problems when targets are not met. Chances are that addressing the root causes and helping these targets to be met ties into the organization’s strategy somehow.

Example 3 – Part 2 of 2
To ensure high-quality care, the hospital’s strategy explicitly aimed to tackle understaffing. Moreover, employee vitality was part of the people strategy. A quick look at the data showed that teams providing similar care were likely also struggling with understaffing and absenteeism. Moreover, teams throughout the hospital claimed to struggle with the same themes. Rather than focus on one team, the case was made to work on a solution for the hospital, which was backed by the HR director. This allowed for the rapid development of a dashboard with early warning indicators for absenteeism and better planning and use of an internal ‘flex pool’ to maintain team capacity.

In Example 3 there are several things that could have been investigated using data. The quick fix might have been to help determine the optimum between the remaining team capacity and the maximum number of patients that could be admitted. While valuable, that solution might no longer be relevant if absenteeism returned to normal levels and could (inadvertently) be team-specific. The contribution to strategy would then be limited.

By looking beyond one team and clarifying how the issue relates to the overarching strategy, both a direction for a scalable solution and backing from top management was attained. This resulted in an outcome that is ultimately more valuable to the organization; now and in the future.


To summarize the above, both approaches (strategy-driven and issue-driven) have checkboxes that are easier to tick (in blue) and checkboxes that may require more attention (the unticked ones): 

Leadership backing
Lasting impact
Business case
Clear deliverable(s)
Sense of urgency

The strategy-driven approach benefits from generally clear relevance to top management, but risks focusing on a problem that no one regards as such yet. You then need to find a ‘buyer’ for your solution. When starting from strategy, it may be worthwhile to pay extra attention to the business case, deliverables and whether a sense of urgency is present or can be created.

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The issue-driven approach tends to be easier to run a project for – but selecting and executing cases with strategic value and senior sponsorship usually requires conscious effort to place the initial question in a bigger picture and ensure lasting impact. When you put in that effort, you may also find that the initial business case and deliverables change somewhat; usually becoming more impactful. 

Please note that I do not think that cases that seemingly lack strategic relevance should always be discarded: just beware that they may need to make way for cases that are deemed to be of strategic importance and of sufficient urgency. Being aware of the strong and weak aspects of projects according to the checklist above can be helpful in determining where projects stand with respect to each other. 

In short: both strategy-driven and issue-driven approaches have their merits. In the end, it is up to you to decide what works best in your situation.

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