HR has relied on the use of data and analytics for years, but has only recently begun to embrace people analytics. Defined as using a data-driven approach to inform your people practices, programs and processes, people analytics is a powerful resource for HR.
After all, human capital is the source of all business success—it makes sense to analyze people to understand and even predict enterprise performance. Recently, HR departments have begun to leverage this powerful tool – and it’s changing the game for many businesses.
HR today is all about understanding people and predicting their actions and responses. And as Josh Bersin has said, “…People analytics as a business discipline has arrived. Our research now shows tremendous growth in this market, and a significant shift away from measuring HR toward a real focus on using people data to understand and predict business performance.”
Unfortunately, while we see more organizations beginning to talk about it, 92 percent of HR departments don’t believe they’re proficient in using people analytics. But that doesn’t have to be the case. Use the following tips to get started or build your proficiency in using people analytics in your organization.
Create a department for people analytics
To establish a solid foundation and use people analytics correctly you’ll need to create a department specifically devoted to this area—one completely separate from the traditional HR team. Why? Well, for the most part, the people with traditional HR backgrounds (or in closely related subjects) tend not to have the skill sets needed to perform sophisticated analyses. You’ll do well to draw from different talent pools. In fact, statisticians or mathematicians, not HR experts, are the best heads for these groups.
People analytics that start in the HR department affect every part of business, so it’s important that someone on the team understands the various units. The best people analytics teams draw talent from across the organization.
Gather the necessary data
The biggest problem companies face in the nascent area of people analytics in HR, besides the lack of adequately staffed departments, is the fragmented nature of their data. For people analytics (or any analytics) to be feasible, the team working on it needs access to a massive amount of data spread over many departments. Core HR information, separate payrolls, varying benefit packages and carriers, and financial information—these are just a few examples of data that was once kept separate but now must be combined for people analytics to function effectively.
An essential step in building a solid foundation in people analytics is developing the new information systems to bring together the disparate information required. People analysts need a single place where this information can be accessed and updated regularly. Developing such a system can be difficult and costly—but the potential ROI is immense.
Diligently maintain privacy and security
A major concern in using people analytics include the issues of privacy and security. Gathering all the data on employees in one place increases the risk of unqualified personnel accessing and using confidential information. As companies create people analytics departments, they’ll need to take steps to maintain the security of their data as well as their employees’ privacy. Additionally, any protected health information (PHI) thetas transmitted, stored, or received by the people analytics department will be subject to HIPAA compliance regulations.
Your company can take these steps to secure employee privacy and data:
- Inform employees about data collection: Providing the option to “opt-in” will bolster a sense of security, privacy, and trust.
- Carefully weigh the decision and who can access the info. Will you share employee activity data with team managers as well? You may need to train your analytics team to recognize Personally Identifiable Data, too.
- Get away from the concept of “anonymity:” This may seem counterintuitive, but employees tend to believe even anonymous information can be traced back to its source. Telling employees that all data will be kept confidential has become more beneficial than promising anonymity.
Witness the benefits of people analytics
While the shift to people analytics is still in its early stages, the companies that have reported some pretty incredible advantages. Check out some of these applications and perks of people analytics provides:
- Predicting employee retention: This has been one of the biggest uses of people analytics thus far. People analytics allows you to calculate retention risks. That information helps you understand why people are leaving and can contribute to predicting how many new hires you’ll need to secure.
- Improving recruiting techniques: People analytics can discover new, more accurate qualifications to predict who will do well in what positions.
- Improving revenue generation: This application spans people analytics across both the sales and HR departments. When these two departments pool their people analytics data, companies are finding ways to increase revenue generation drastically.
- Predict absences: People analytics can even be used to predict which days people will most likely be absent, allowing HR teams to schedule extra staff ahead of time.
Employee productivity, workforce demographics, and talent development are other areas where people analytics may yield some fantastic insight.
Companies are just beginning to adapt people analytics into their HR departments, and many attempting to do so are discovering that it’s a challenging process. However, there are clear advantages behind the use of new form of Big Data. People analytics is likely to become pivotal to HR departments in the not-too-distant future.
For more on how this new technology is shaping the future of HR, see Joining The People Analytics Revolution.
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