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Human resources · 

7 minutes

Cormac O'SullivanPiggy

Unlocking the Power of Your Workforce with People Analytics

One of the keys to success is understanding your most important asset - your people. With the rise of data science, a new field has emerged that provides crucial insights into this vital resource. This field is people analytics.

To harness the power of this innovative tool, business leaders, HR professionals, and even employees need to understand its potential. Read more to understand what people analytics is, why it's essential, and how you can apply it within your business.

What is People Analytics?

People analytics, often referred to as talent analytics or HR analytics, is a form of data analysis focusing on employee data. It's a data-driven approach to managing people at work. Leveraging people data from various sources, people analytics enables data-driven decisions in HR and business operations, helping leaders improve their organizations.

Just as advanced analytics transformed marketing and finance, people analytics is set to revolutionize human resource management. A recent Deloitte report found that 71% of companies now consider people analytics a high priority. As we delve further into this exciting field, you will understand why this trend is only set to grow.

5 Reasons Why People Analytics is Important

Enhancing Employee Experience

One of the most compelling reasons to adopt people analytics is to improve the employee experience. By analyzing data on employees' engagement, productivity, and workplace behavior, companies can gain insights into what makes their employees happy and effective at work. For example, Google's Project Oxygen used people analytics to identify the eight characteristics of effective managers, leading to a 10% increase in employee satisfaction.

Reducing Employee Turnover

Employee turnover is costly. Studies show that the cost of replacing an employee can be as much as two times their annual salary. By analyzing employee data, companies can identify the reasons behind turnover and develop strategies to retain top talent.

Streamlining Talent Acquisition

People analytics can also enhance talent acquisition. By analyzing data from past successful hires, companies can create predictive models to identify the best candidates for a position. Xerox, for example, used people analytics to reduce attrition by 20% in their call centers.

Driving Data-Driven Decisions

In an age where data is king, companies that make decisions based on gut feelings or assumptions risk falling behind. People analytics provides actionable insights, enabling leaders to make informed decisions about their workforce.

Facilitating People Analytics Projects

As HR becomes more data-driven, people analytics projects are becoming increasingly important. These projects, which can range from developing a new recruitment strategy to redesigning the workspace, are empowered by the data and insights provided by people analytics.

Where to Gather Employee Data

People analytics relies heavily on the collection and analysis of employee data. This data can come from numerous sources within an organization. Some of the most common sources include:

HR Information Systems (HRIS)

These systems contain a wealth of data on employees' personal details, job roles, salaries, and more. They are often the primary source of data for people analytics.

Employee Surveys

Surveys can provide insights into employee engagement, satisfaction, and other subjective factors that are difficult to measure with hard data.

Performance Reviews

Performance review data can help identify trends, strengths, and areas for improvement within your workforce.

Social Media and Other Digital Platforms

Social media can provide insights into employees' professional networks, their engagement with the company, and potential risks or opportunities.

What to Analyze in Employee Data

When it comes to analyzing employee data, there are a number of areas that can provide valuable insights:

Performance Data

Analyzing performance data is critical in understanding your employees' capabilities and aligning these with organizational goals. This data can provide a clear picture of who your high performers are, who may need additional support, and who is ready for a leadership role. It can also highlight areas within your organization where additional training could be beneficial. For example, if a particular department consistently has lower performance metrics than others, it may be worthwhile to investigate.

Engagement Data

Employee engagement is a significant indicator of a healthy and thriving workplace. It's not just about productivity. Highly engaged employees are more likely to stay with the company, be advocates for the business, and bring innovative ideas to the table.

By analyzing engagement data, you can identify trends, opportunities, and potential issues before they become bigger problems. This can guide decisions about training, development programs, and initiatives to foster a more engaged workforce.

Retention Data

Understanding why employees leave is just as important as understanding why they stay. With retention data analysis, you can identify patterns and trends associated with employee turnover. If data shows a sudden increase in turnover after yearly performance reviews, it could be because the reviews were unsatisfactory. This kind of insight can help you create more effective retention strategies and reduce the high cost of employee turnover.

Diversity Data

A diverse workforce brings together a multitude of perspectives, ideas, and experiences, which can drive innovation and improve decision-making. By analyzing diversity data, you can ensure your workforce is inclusive and representative of the communities you serve. Moreover, this analysis can help uncover unconscious biases in hiring or promotion practices that may be undermining your diversity goals. Making data-driven decisions on diversity can help your organization to learn, improve, and foster an inclusive culture.

Recruitment Data

Recruitment data can reveal a wealth of information about how well your hiring process is working. For instance, how long does it take to fill an open position? Which sources provide the highest quality candidates? How successful are new hires in the long term?

Analyzing this data can help you streamline and improve your recruitment process. Only then can you attract top talent more effectively and efficiently.

Examples of People Analytics in Practice

People analytics has been successfully use by many leading companies. Let's take a look at a few examples:

Google's Project Oxygen

As previously mentioned, Google used people analytics to identify key characteristics of successful managers. This initiative led to improved management practices and increased employee satisfaction.

AT&T's Talent Management

AT&T used people analytics to predict the future skill needs of their workforce. This allowed them to develop training programs for existing employees. This was pivotal in preparing them for future roles and reducing the need for external hiring.

Procter & Gamble's Workforce Optimization

P&G used advanced analytics to optimize their workforce distribution. They achieved a balance between full-time and part-time employees, leading to significant cost savings.

These examples highlight the transformative impact people analytics can have on an organization when effectively implemented.

Using Predictive People Analytics

Predictive analytics is a sophisticated aspect of people analytics. Using advanced data analysis techniques, predictive analytics can forecast future outcomes based on historical data. For example, predictive models can identify employees who are at risk of leaving. They can also pinpoint which candidates are most likely to succeed in a given role.

Leading companies like IBM and Credit Suisse have successfully used predictive people analytics to improve their HR strategies. By harnessing the power of predictive analytics, companies can become more proactive. This means addressing issues before they become problems and seizing opportunities to enhance productivity and employee satisfaction.

Using People Analytics in Your HR Strategy

To effectively integrate people analytics into your HR strategy, consider the following steps:

Start Small

When integrating people analytics into your HR strategy, it's advisable to start small with a well-defined project. This approach allows your team to focus on achieving a single goal and learning from the process. The experience gained can form the basis for scaling up your people analytics efforts. For instance, you might start with a project to improve employee engagement, analyzing engagement survey data to identify areas for improvement.

Gather the Right Data

Quality data is the foundation of successful people analytics. Make sure you're collecting data that is relevant to your objectives, and that it is clean and reliable. This might involve integrating data from different sources for a more holistic view of your workforce. For example, combining data from your HRIS with survey data could provide richer insights into employee engagement.

Develop Analytics Capabilities

To gain the full benefits of people analytics, you need to invest in the right tools and skills. This might involve investing in analytics software or hiring a data analyst. The goal is to turn data into actionable insights, so having the right skills or tools is crucial. Continuous learning and development in this area will also ensure your team keeps up with the evolving field of people analytics.

Communicate Results

Once your analysis is complete, it's crucial to effectively communicate the findings and recommendations to stakeholders. Use clear, simple language to explain the insights and their implications. Highlight the actionable insights, so stakeholders understand what steps they can take based on the data.

Iterate and Improve

People analytics is a continuous process. Each project provides an opportunity to learn and improve. Maybe you found that a certain type of data wasn't as useful as expected, or perhaps you discovered that your analytics tool isn't robust enough for your needs.

Use these learnings to refine your approach for the next project. This improvement process helps organizations use people analytics to drive HR strategy and business outcomes more effectively.


People analytics is a powerful tool for understanding and improving your workforce. By leveraging employee data, businesses can make data-driven decisions that enhance the employee experience, reduce turnover, and drive business success. As technology advances and the business world becomes increasingly data-driven, the importance of people analytics will only continue to grow. Start your people analytics journey today and unlock the full potential of your most valuable asset - your people.

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