People Analytics: How to use it for competitive success

People analytics is the analysis of data collected by HR used to help managers make better decisions. What started as an activity carried out by a small team has now become mainstream.  This has led to the evolving role of HR – now involved in operational improvements as well as workforce planning and talent management.

The rise of people analytics and what it means for HR leaders

The adoption of this data-driven approach combined with sophisticated HR systems, has enabled people analytics to become widespread.  As its positive impact on the bottom line continues, HR leaders are now required to use retrospective and real-time data to have deeper understanding of the workforce.  

People analytics enable HR leaders to identify actionable insights to improve workforce retention and recruitment.

3 types of HR data

The three main types of HR data are:

• People data (payroll, benefits, data collected workforce management systems)
• Programme data (attendance, adoption, training)
• Performance data (360 assessments, succession programmes)

Lagging data (traditionally reported on by HR) such as absence levels, identifies concerns rather than solutions.  However leading data is where people analytics has the most impact.  Tim Pointer, HR Director and founder of Starboard Thinking asserts, “It accounts for wider business measures” which means “understanding the strategic investment that you’ve put into your existing team in order to ready them for future success.”

It should be noted that both qualitative and quantitative data is key to successful people analytics.  Group HR Director at Pentland recalls, “I would assess the qualitative to get our numbers, but the qualitative was very valuable.”  The result? Pentland ranked in the UK’s top 10 large organisations to work for.

The importance of collecting data in a meaningful way

Collecting different types of data let's HR leaders form a holistic view of an organisation.  The sheer amount of data can be overwhelming but successful people analytics relies on using it in a meaningful way.   Caren Ibn-Ayoub, HRBP Director at Levi Strauss & Co. highlights the importance of being “able to centralise the information” and “only collecting data that will impact the strategy and drive the business forward.”  

Additionally, Tracey Elverstone, Head of HR at Staffline acknowledges that once a robust HR system has been implemented, the “challenge is using it to make informed decisions.”  Her solution is to “limit the amount of time we survey the business, as they lose impact if too many are issued.”  

The importance of collecting data which meets the objectives of the business

Wisely choosing what data to collect is fundamental to solutions-driven people analytics.  Andrew Spence, HR Consultant at Glass Bead Consulting shares an example of a bank experiencing stress related absence. By noticing trends they were able establish metrics that predicted when there would be increased risk of stress-related absences.  This was used to implement a 24-hour helpline – a quantifiable solution where savings can be measured as well as a wellbeing initiative.

Collecting data that meet the objectives of the business makes people analytics valuable.  It’s also important to consider ethical concerns;  some have voiced humanitarian concerns over people analytics being used as a tracking mechanism instead of a drivers for improvement.

Using people analytics to benefit key stakeholders

It is clear how people analytics can help employees but stakeholders such as investors also stand to benefit.  During the planning phase, Tim Pointer advises to consider the investor’s viewpoint - business metrics and strategies should highlight “why they should keep their money invested.”

Business growth is not simply based on previous profit margins so “understanding the performance areas…how engaged the employees are…and how the investment has been made to get them “future-fit” are of interest to stakeholders.  Salina Gani, Head of HR at Le Pain Quotidien states, “If you can improve employee experience, you’ll improve your performance as a business”.

For a more detailed insight into how other organisations have successfully used people analytics, and how you can improve your people analytics now, please download our report on The definitive guide to using people analytics to inform business strategy.