People analytics is a hot business topic and rightfully so. Organizations need to leverage the plethora of data that’s generated today to glean patterns about untapped talent potential, ways to positively impact productivity, and opportunities for growth and innovation.
Analytics practitioners often focus only on top-level data sources (sales quotas, expenses, performance ratings, etc.). However, there are new types of data and ways to analyze them that can provide insights to help keep your employees happy and productive. Organizations that don’t examine patterns about the largest part of their balance sheet – their people – will be left behind in retaining and developing employees, influencing business outcomes, and potentially surviving in the long run.
As a relatively young field, there are many misconceptions about people analytics. Here are three of the biggest myths and what you need to know as your organization dives into the data:
Myth #1: People analytics involves just one kind of analytics
While people analytics can be performed through many frameworks, there are three general categories of analytics work.
- The foundational analytics gives your organization a consistent language to understand workforce dynamics and detect early signs of issues to investigate. This foundation should have the following elements at its core:
- A “golden copy” of high-quality workforce data, which includes historical trends to help you answer “What has happened or is happening now?”
- Standard measurements and definitions based on that data (headcount, turnover, hiring, movement, diversity, etc.) that enable business leaders to understand, in a consistent and repeatable way, how well they are managing the workforce. These measurements can help you identify trends that normally would be difficult to spot, like attrition spikes or certain positions that take longer to fill.
- Easy-to-navigate visualizations that users, with the appropriate access levels, can access across the organization.
- Advanced analytics is data collected during the workforce lifecycle that have an impact on important outcomes. It leverages and augments foundational data with more sophisticated types of data and analyses to address questions like “Why has a certain outcome happened and what can we do differently to improve it?” and “What new insights can we make available across the organization?”
Business leaders, including in HR, are increasingly being asked to link the impact of actions they take, such as initiatives and programs affecting customer service, employment brand, and employee experience, to measurable outcomes. With advanced analytics, you can develop insights and identify the interventions that will have the most positive impact. For example, understanding that having three people cycle through one management role in a single year is correlated with higher attrition of their team members, which then results in significant cost to replace the individuals and a decrease in customer satisfaction, could help HR make a great business case for creating a program to increase manager and team stability.
- Research, development, and experimentation. Just like product and service development, analytics can benefit from R&D. As the organization introduces technologies in the workplace, new data sources and analytics techniques can offer workplace behavior insights, and enhance the organization’s ability to positively influence the overall employee experience. This category of analysis is answering the questions “What are we not thinking about yet? What could be the unintended consequences of some of our actions, practices, or tools? How can we learn something new?” For example, during a pilot program of social sensors, data analysis uncovers a pattern of movement of employees near a specific area. Can you change the pattern to introduce serendipity and encourage people to meet each other and have a conversation? Will the change impact innovation or the cohesion of the team?
Myth #2: You need expensive technology to implement people analytics
To get started with people analytics, you don’t need big investments in technology. You need something much simpler: the business question you want to answer. Once you have a good understanding of the question, you can back into the data needed to answer that question; then, you can move on to telling a story with the data. Start with a simple spreadsheet and run some numbers to see if a compelling story develops. A picture tells a better story than rows and rows of data do, so use visualization tools to support your story. Effective storytelling with data will increase the likelihood of that project, budget, or change gaining approval with decision makers.
Data analytics can become complex, as data flows in different forms and from varied sources – for example, large amounts of text in multiple languages or unstructured data. But this complexity also allows you to create more in-depth answers to your key business questions. For example:
- Can you detect sentiment in how people express themselves in the chatter on internal social platforms? And can you track how sentiment is spreading across geographies?
- Is there a relationship between significant external public events (like an ousted CEO or taking an unpopular stance on a social issue) and the spike in attrition?
- Can you integrate data from smart building sensors or chatbot interactions? And can that data point to ways to improve productivity or team collaboration?
As you get into more complex manipulation and modeling massive amounts of unstructured data, you’ll discover opportunities to incorporate predictive capabilities using more sophisticated statistical analysis, machine learning, and AI.
Myth #3: People Analytics is for HR only
While people analytics is usually considered an HR function, there are many other groups and departments that can benefit from people analytics as well, including:
- Workspace planning and design. People analytics can help forecast workforce size and composition; look at the trends impacting workforce behaviors (remote or co-working space preferences, for example); and drive projections for physical space allocation and configuration to maximize desired outcomes, such as increased productivity or collaboration. Given that many of us can (and do) work from our devices and are untethered to a physical space, an interesting question that organizations can think about is how the digital infrastructure, as a workspace, is just as important as the physical one. This can bring the real estate/space planning and IT departments together to design a workplace experience that integrates both the physical and digital worlds.
- Work design. Labor shortages are making headlines and one big factor that I believe is amplifying the problem is job descriptions. Hiring managers typically take a job description from a prior source (a previous manager, one found online, etc.), add a few cool tool names, sprinkle a few “purpose and passion” statements, and then go on a “unicorn hunt.” There are just not that many data scientists who earned a PhD in neurobiology, have 15 years of experience, speak five languages, and are still “early in their career” (a proxy for “cheap”).
Through analytics, however, you can deconstruct job descriptions to understand what needs to get done, so that you can reframe assumptions that get in the way of finding the right employees and reimagine how certain functions exist. For example, some work might not require face-to-face interaction; a remote work program could solve hiring issues for such roles.
- Automation, integration, and employee experience. I recently heard a quote that automation and AI is removing the robot out of the human. So true! It’s time to bring human-centered design to the workplace and pair it with technology to automate routine, boring, mundane tasks. Leave the engaging, creative, stimulating tasks to the humans! Imagine how much productivity your employees can gain by integrating all their tools, so they don’t have to remember seven passwords that expire frequently or re-enter things multiple times. People analytics can help you track the efficacy of such changes.
Organizations that bring customer-centric solutions to their products and services are the leaders that capture the hearts and minds of their customers – along with wallet- and market-share. People analytics can help bring the same experience to the workplace. For example, if you can forecast your headcount over the next 12 or 24 months, you can also project the associated expenses (travel, equipment, licenses, network capacity, etc.) and not only have a more accurate budget, timely fulfillment, and better planning cycles for all the involved functions, but also a smoother onboarding of new hires, shorter time to productivity, and higher ratings on Glassdoor.
Another example: If your spend data shows an increase in employee travel to a particular region, this could be an opportunity to set-up and negotiate better infrastructure and accommodations (i.e., longer-term rentals, flexible office space, localized technology solutions, etc.) that not just saves money, but improves the employee experience for those travelers, and shows thoughtfulness of the organization and care for its employees.
Through people analytics you can understand the perception and sentiment of your workforce regarding areas, technology, or processes that are irritants or barriers to their ability to perform, and insights on where to focus your efforts to better the employee experience. Ultimately this will create an environment where people feel they are heard, with fewer silos that impede collaboration, and a better experience that unleashes creativity, productivity, and offers a great employment value proposition.
One area of people analytics that can have a direct effect on your bottom line is how your people spend, from travel expenses to outstanding invoices. Get expert help on maximizing your spend data with Consultative Intelligence from SAP Concur.
Stela Lupushor is the founder of Reframe.Work Inc., a consulting firm that helps organizations prepare for digital transformation by changing the workplace at the intersection of technology, design, HR, and analytics. Previously, she led the analytics function and worked in a variety of management consulting roles at several Fortune 100 companies. She is a sought-after speaker on the topics of People Analytics and the Future of Work.