What is People Analytics (And is it the Future of HR)?

What is people analytics?

People analytics may also be known as talent analytics, or even HR analytics, as its primary function has always been to enable managers and executives to make better-informed decisions about their workforce. As the field of recruitment is continually evolving, talent management must do so too, and this is where applying technology, data and statistics to areas such as hiring decisions, applicant behavior, and employee morale/retention, can have a profound effect.

By removing some of the guesswork around HR and people management, this new area of analysis and research can help HR teams to cut through the noise and make decisions based on statistical fact, rather than the usual ‘gut feeling’ that many people still tend to work with.

So, how does people analytics really work? Is this new method of analysis and decision making on the way to replacing traditional HR functions, or is this something that can be embraced by HR teams?

What are the benefits of people analytics?

As the HR landscape continues to grow and develop, it is only logical that the techniques and technology used by professionals will continue to evolve and adapt to meet current needs.

From getting to the bottom of many people-orientated issues, such as career dissatisfaction, unhappiness with poor management, and general low workplace morale, people analytics and the data gathered can be used by HR to streamline processes and ensure the current workforce is satisfied and working to its full potential, while also optimizing the recruitment process and the procedures used when recruiting and on-boarding new employees.

Where is HR going wrong?

While HR teams are crucial to the running and success of any business, McKinsey & Company suggests that there may be some areas where HR is going wrong, and this is where people analytics can provide real value in solving these issues.

For example, many within HR and recruitment tend to have their own ideas regarding the best places to find new candidates and employees to bring into the recruitment process, and while there may be particular pools of candidates that have a high success rate (i.e. graduates coming from specific colleges/universities), using analytics within this function is an effective way of knowing how to cast the recruitment net wider, and how to find talent in places that may previously have been dismissed.

Similarly, with an increasing emphasis placed on non-discriminative hiring and removing bias from the recruitment process, using people analytics to gather data on applications, resumes/CVs, previous applicants and finding the best fit for the role can help to eliminate some of these human issues that may arise within HR.

Does people analytics belong in HR?

As businesses evolve, so too does the data needed and used to analyze each department and the people within each organization. But as people analytics is implemented into an organization and grows over time, the question that should be asked is this: does people analytics actually belong in HR?

If this data can ultimately provide an organization with the trends behind its ‘people’, i.e. what makes employees leave a role or company, or what makes them stay, does this then stretch beyond HR, and encompass the whole organization?

Forbes believes so; using people analytics within HR is essential, as this will undoubtedly remain a valuable tool for recruitment and retention. But when this data then has the power to inform the owners of a tech company why their engineers may choose to leave, and subsequently help HR and senior management to structure compensation and salary packages around the information garnered, this becomes a business-wide decision.

Similarly, if this data can be used within a healthcare company, for example, to determine why certain hospitals and departments have a higher rate of illness and infection, and what the human issue may be behind this, this is no longer a function that should sit within, or solely belong to, HR.

Ultimately, there is still a lot to be learnt about people analytics, however, this new technology certainly has the potential to change the way HR operates, now and in the future. In utilizing big data to make decisions about its people, and by making a conscious effort to take some of the ‘human’ aspect out of the decision-making processes, it’s highly likely that many organizations will reap the rewards.

And as this method of working becomes more common-place within businesses, it will certainly be interesting to see the results company-wide, however, for the time being, this is undoubtedly a game-changer for HR departments everywhere.

To help you make better informed HR decisions, click here to view more industry trends.