9 Business Benefits of People AnalyticsBy Ettie Holland on 24.10.2016
Get Off The Fence! 9 Benefits of People Analytics
#1 - Strengthen Decision Making
Let’s look at the obvious point first. At heart, people analytics gives you more data, which empowers decision-making. Traditionally HR has been very subjective when making decisions, and people analytics marks an end to that.
#2 - Improve Retention
It’s widely accepted that employee acquisition costs more than retention. Put another way, it costs your business more to lose an existing employee than to find a new one. It’s no surprise, then, that 86% of business leaders are majorly concerned about employee retention (Deloitte Human Capital Trends Report 2016).
People analytics offers an answer. We’ve talked before about predictive modelling, and the role it has to play in the future. Nowhere is this more relevant than to employee retention. What if you could identify flight-risk employees before they consider leaving? You could take proactive steps to encourage them to stay; that’s what.
Google offers a fantastic example. The Google HR team – dubbed People Operations – are known for their now-notorious slogan, “I have charts and graphs to back me up. So f*** off.”
You’d be hard pressed to find a stronger clue as to Google’s data-led approach to HR, so it’s unsurprising that they’re leading the way here. The rest of us are blinking the sleep out of our eyes, but Google’s been awake for years. As far back as 2009, Google was already using an advanced algorithm to determine retention-risk employees .
#3 - Drive Accountability
People analytics harks an age of transparency. Until now, most employees have had little insight into performance. Any insight they do have has tended to come in the form of dense and difficult to understand reports. This data can’t truthfully be called insight because it’s so rarely acted upon as to be meaningless.
With people analytics, that all changes. As we explored in the last instalment of this series, data presentation is a vital part of the people analytics equation. Embracing people analytics means embracing a world of beautiful, simple, relevant data visualisation. It means employees getting insight that they can easily understand, not just a flurry of data to drown in.
These employees can readily see and understand results, and understand them in the greater context of strategic business objectives. This transparency fuels accountability, as employees take ownership of the data.
#4 - Explode Silos
Silos are the bane of life for most large organisations. Silos hinder agility and progression. They prevent organisations from evolving as quickly as they need to in today’s landscape. They reduce efficiency, and stamp down productivity. They have a terminal impact on employee engagement and morale. All in all, silos are definitively A. Bad. Thing.
The problem is that silos are hard to break. It’s a cultural thing as much as an organisational thing, and the problem runs deep. They can be insidious.
That’s where people analytics can come in. One of the biggest benefits of people analytics is the ability to explode these silos. By providing relevant, accessible data across the organisation, you create a context for cross-departmental employees to interact in a meaningful way. You create a culture in which cross-department sharing is embraced. This initiates a snowball effect as employees start to benefit from this cross-pollination of experience and ideas.
#5 - Increase Employee Satisfaction
Workforce engagement is a major issue for every HR professional today. Happier employees are more productive, more efficient and more loyal – and can make a huge difference to the bottom line.
#6 - Hire Better People
One of the biggest benefits of people analytics is the ability it gives you to hire better people. If you’re thinking that that’s a bold claim given the subjectivity inherent in ‘better’ then you’re right. It is a bold claim. But that’s what people analytics can deliver.
#7 - Pinpoint More Fruitful Sourcing Pools
This is closely related to the point above, because you’ll be hard pushed to hire better people if you don’t find them first.
According to the Bersin by Deloitte Talent Acquisition Factbook 2015, it takes an average of 52 days to fill an open position. Difficulty sourcing candidates is, unsurprisingly, one of the biggest obstacles to hiring success (MRI Network Recruiter Sentiment Survey 2016).
With that in mind, an ability to identify the most fruitful sourcing pools translates into a direct competitive advantage. McKinsey share the example of an Asian bank that had heretofore concentrated their hiring efforts around top universities.
People analytics allowed this bank to identify numerous other areas that yielded high performing candidates. They were able to see which specific institutions were profitable sourcing pools, as well as identifying previous job titles that acted as “feeder roles”.
#8 - Secure Buy-In Into HR
On one hand there are the Google’s of the world. On the other there are the companies for whom HR is a necessary evil, only resentfully granted a seat at the table. While things on your organisation might not be quite that extreme, HR is still often considered a reactive function with limited usefulness.
We’ll explore the changing role of HR more in future instalments, but suffice to say this. Initiating a shift in how HR is perceived is one of the most vital benefits of people analytics.
#9 - Save Time
As benefits of people analytics go, this is fairly obvious. Sourcing, hiring, training and nurturing talent is a time-intensive process, and often that time turns out to be wasted in the wrong places.
Training employees who’ll jump to a competitor for a minor salary hike. Recruiting employees who last less than 6 months. Developing intensive employee engagement programs that never affect employee engagement.
People analytics is still at that stage where everyone’s talking about it, but few people are actually doing it. It’s time for that to change. Hopefully this article has convinced you to step off the fence, because the benefits of people analytics are tangible and mighty. Without a doubt, organisations that make strides to leverage people analytics now will be those who dominate in the future.