Using People Analytics to Make Data-Informed HR Decisions

Successful companies are using people analytics to leverage their data in ways that they could never have imagined even just a few years ago – from predicting manager and employee performance to improving employee well-being to increasing efficiency and productivity.

People analytics, also known as HR analytics or workforce analytics, involves the use of data-driven approaches to manage and improve an organization's human resources. By leveraging data, HR professionals can make informed decisions that enhance employee performance, engagement, and overall business outcomes.

While it’s an industry buzzword of late, people analytics has been around for over 100 years! The first recorded application of people analytics dates back to 1911 when Frederick Taylor’s book, The Principles of Scientific Management was published. His theories centered around improving work, boosting productivity, and increasing efficiency by tracking employee activities. Building on his theory, people analytics recognizes the human element and takes employees’ perceptions, attitudes, and needs into account to guide business decisions. We now have the technology to not only create and collect the data, but also to analyze it and use it to make business decisions that will ultimately determine the success of a business.

We spoke with the People Analytics Expert and a Management Consultant Konstantin Tskhay, PhD, about how people analytics can be used to make data-informed HR decisions. Konstantin is Managing Partner and Founder of Tskhay and Associates, Inc., which helps clients across industries to improve their retention, engagement, and performance using people analytics. He also is one of the co-developers of the curriculum of the new Postgraduate Certificate in People Analytics, starting this fall at The G. Raymond Chang School of Continuing Education at Toronto Metropolitan University.

Recruitment and Talent Acquisition

Many companies are using analytics for hiring. They would analyze historical data to identify the traits and qualifications that predict success in specific roles. This allows people and culture teams to develop better job descriptions, refine their candidate screening processes, and make more targeted hiring decisions. Here, analytics can also help identify the best sources of talent, like particular job boards or referral programs,optimizing recruitment strategies.

Candidate experience analysis can be useful in analyzing feedback and the recruitment process engagement metrics which help companies understand the candidate experience. This data helps improve candidate experience by focusing on the human-centred design of the broader process.

“Though many companies use LinkedIn data at the beginning of the recruitment process, they rarely go back and correlate it with what happens in 6-to-12 months after the candidate is hired,” says Konstantin. “The real value comes from linking your recruitment process to the impact the person is making in your organization–their performance, mobility, and engagement.”

Employee Performance and Productivity

By tracking various performance metrics like sales figures, project completion rates, and customer feedback scores, HR can identify high performers and those needing additional support. This data enables the creation of tailored development plans and targeted training programs to boost overall productivity.

People analytics can monitor and analyze employee productivity data. This includes tracking how employees spend their time, identifying bottlenecks in workflows, and understanding the impact of different work environments. Insights gained can lead to interventions that improve productivity like redesigning workspaces or implementing new technologies.

“This type of data can tell organizations which activities lead to more productivity for the organization and well-being for the individual,” says Konstantin. “The big challenge with this data, however, is twofold. First, using activity data will require special privacy considerations, which means explaining to employees what data is being used, how it is collected, and why. The second is the sheer amount of data, including communication chain, relationship networks, and number of clicks in different platforms. Extracting, storing, organizing, and analyzing these data can be extremely costly.”

Employee Engagement and Retention

Regularly conducting and analyzing employee engagement surveys helps HR to understand the levels of job satisfaction, motivation, and commitment within the organization. This data can inform initiatives aimed at improving workplace culture, such as recognition programs, wellness initiatives, and opportunities for professional growth.

“A typical organization that does engagement surveys probably takes about three months to analyze the data and then another six months to start actioning it,” says Konstantin, adding that the timeframe needs to be shorter in order to make changes that are timely and relevant to an organization.

Analyzing data on employee turnover and exit interviews can reveal patterns and predictors of employee departure. HR can use this information to identify at-risk employees and proactively address their concerns, whether through career development opportunities, improved compensation packages, or enhanced work-life balance policies.

Learning and Development

People analytics can identify skills gaps within the organization by analyzing performance data and employee feedback. This enables HR to design targeted training and recruitment programs that address specific needs, ensuring that employees have the necessary skills to drive organizational success and outcomes.

People analytics can also be used to measure the effectiveness of training programs. By tracking the outcomes of training initiatives, such as improvements in performance or increases in productivity, HR can assess the effectiveness of their learning and development programs. This data-driven approach allows for continuous improvement of training methods and content.

“Traditional methods of data collection for HR professionals include learning management systems, which gives them a picture of employees' activity, but not improvement,” says Konstantin. “You need to collect the data that focuses on outcomes as the effects of learning will really come to fruition only after you have a chance to practice them on the job.”

Diversity, Equity, Inclusion, and Belonging

Analyzing workforce demographics and diversity metrics helps HR to understand the current state of diversity, equity,inclusion, and belonging (DEIB) within the organization. This data can inform strategies to promote a more inclusive workplace like training, mentorship programs, and inclusive hiring practices.

“Organizations can ask individuals to voluntarily self-identify to different categories or parts of a continuous spectrum,” says Konstantin. “Some organizations then use this data to create an inclusive and thriving workspace.”

Compensation and Benefits

People analytics allows HR to benchmark their compensation and benefits packages against industry standards. This ensures that the organization remains competitive in attracting and retaining top talent.

Analyzing data on benefits utilization helps HR to understand which benefits employees value the most and which are underutilized. This information can be used to design benefits packages that better meet the specific needs of the workforce, thereby increasing employee satisfaction.

People analytics is a powerful tool for making data-informed HR decisions. By leveraging data, HR professionals can enhance various aspects of human resource management, from recruitment and performance management to employee engagement and retention. Implementing people analytics requires a commitment to data collection, analysis, and continuous improvement, but the benefits of informed decision-making can significantly impact an organization’s success.

Adopting a data-driven approach in HR not only improves efficiency and effectiveness but also ensures that decisions are aligned with the overall strategic goals of the organization. As the field of people analytics continues to evolve, it will undoubtedly play an increasingly critical role in shaping the future of human resource management.