People Analytics: The Future of HR
Big data is everywhere, even when it comes to people. In today’s market, employers aren’t just collecting data on how many of their employees have college degrees or professional certifications. They want to know how diverse their hiring practices are, how well their pay compares to others in the industry, which character traits perform best in which environments and how happy — and likely to stay — their employees are. People analytics has found its place in business.
The Power of People Analytics
It’s not uncommon for businesses to find themselves using a multitude of different systems for recording company data. The good news is that today’s technology is making it even easier to integrate those systems so that business leaders can gain even greater insights about their companies — what’s working and what isn’t. Here are just a few things today’s HR teams are looking to find with people analytics:
- How are we doing? Sure, we want to know about sales and financial gains. But we also want to understand why those sales and gains happened. What type of people worked on the most successful teams? What kinds of perks made them more productive? What type of organizational structure seemed to spur the most growth? How are we doing on retention — and why?
- Do our employees like being here? Time and again, we find that happier employees lead to higher customer satisfaction and higher performance overall. In fact, I’ve even seen employee engagement deemed a “wonder drug” when it comes to customer happiness. Anyone who’s ever shopped at Nordstrom knows why! That’s why employee satisfaction is so important. Just like the Net Promoter Score (NPS) can help companies determine the loyalty of customers to their businesses, they can now use the Employee Net Promoter Score (eNPS) to determine the loyalty of employees to their business.
- Are we doing our best? How do we stack up when it comes to competitive pay? Diversity? Gender equality? Are we providing the most comprehensive benefits package? Are we making sure our environment promotes health and well-being rather than stress? These are all questions companies need to know, especially in improving retention rates among their best producers. People analytics can be the answer.
The indicators used to calculate success will be different for every company, depending on their values. (As McKinsey would put it, companies need to “define what matters.”) Bottom line: Every question you have about your company and its employees can be answered through numbers. You just need to know which questions to ask.
Sounds Great — Now What?
Chances are good your company has been collecting people analytics in the past few decades — whether you realize it or not. Your opportunity now is to take advantage of new technologies to bring that data together for even more meaningful analysis. If you’re not sure where to start, try the following:
- Artificial Intelligence and Automation. Today’s AI tools aren’t just for robots. They’re for taking highly complex data and determining likely actions. For instance, certain software available today can analyze team emails to determine the “mood” among team members. Are they stressed? Working cohesively? The answers to these questions can help determine what type of help the team needs to create a more effective environment. Some companies are even using AI algorithms to study social network and email behavior to determine which valuable employees are likely to leave — and to seek to turn the tide before they hand in their resignation. AI and people analytics can change the HR landscape.
- Continuous Feedback. No one likes to be blindsided with negative feedback. By using continuous feedback strategies, employees are rewarded or coached on an ongoing basis and gain transparent constructive feedback when it matters — in real time. This doesn’t just improve employee performance. It also limits resentments that arise when it feels like the feedback given was not fair or transparent.
There are so many resources today to harness the power of people analytics in HR. But resources alone don’t fix problems. We’ve all answered employee surveys that seemed to disappear into thin air. Problems may have been acknowledged, but nothing was ever really done to fix them. This is NOT the way to use people analytics to improve performance and employee satisfaction. As such, all these tools come with a huge caveat: Managers and leadership need to be committed to using the data they collect to improve the employee experience.
If employee satisfaction is low, for instance, leaders need to be committed to taking the next logical step: How do we fix it? If there turns out to get a gender gap in pay, there needs to be the transparency and openness to admit and correct it. This goes for any area of improvement in the organization, and that means a commitment from the C-suite when it comes to financial resources and support. After all, no amount of big data can fix a problem or make employees happy. Only people — using strong people analytics — can do that.