People Analytics: The Future of Talent Management
In the age of Big Data, organizations focus much of their time and resources analyzing their customers to improve their reach, tailor their messaging, and/or increase profitability. What if there was a way to have the same level of insight and visibility for your employees? There is: People Analytics. In this blog, we will explore the benefits of People Analytics and outline tools that can be used to measure data and improve outcomes.
What is People Analytics?
Harvard Business Review defines People Analytics as “Using statistical insights from employee data to make talent management decisions.” This method applies statistics, technology and expertise to large sets of talent data, which results in making better management and business decisions. Human Capital, or “Talent” Management, is evolving from a basic organizational function into a decision science, identifying ways that talent can be used to create new products and a variety of services that inspire new strategies.
People Analytics can be used for:
- Recruitment, Hiring, and Training
- Employee Engagement
- Compensation
- Predicting Employee Potential
- Turnover Reduction / Improved Retention
- Succession Planning
- … and more
According to CFO Magazine, “Human Resource (HR) metrics might measure efficiency, or the time and cost of activities; human-capital metrics measure the effectiveness of such activities. Time to fill becomes time to productivity; turnover rate becomes turnover quality; training costs become training return on investment.” In other words, data, instead of intuition or trial and error, provides evidence for decision making.
Using Existing Data and Finding Your Own
Appropriate analysis of an organization’s available data helps with understanding vital aspects of the workforce, including attrition costs, shifting demographic trends, the effectiveness of organizational processes, and insights into other human capital topics. HR metrics, such as headcount, time to hire, cost per hire, training seats, turnover, and employee satisfaction are useful in the tactical realm. Strategic human capital metrics can make a difference to an organization from a competitive point-of-view, such as quality of hire, time to performance, differentiated engagement and employee retention, all of which lead to strategic outcomes.
When readily available data are insufficient, get your own data. One way is to design your own survey. Surveys are versatile because they can be used to study many different phenomena in a number of different ways; they are efficient because they can be developed and employed relatively quickly. There is a real art and science to survey design that must be considered when collecting one’s own data. Things such as question wording, question ordering, and questionnaire presentation are all critical issues in survey design.
Meanwhile, qualitative research uses non-numeric data, such as words, to help us understand human capital processes by looking for patterns in a methodical, systematic fashion. This can be done through methods such as in-depth interviews or focus groups. In-depth interviews are conversations between a trained interviewer and a participant in which interviewers typically ask a series of open-ended questions, most of which will be pre-determined ahead of the interview. These same questions are generally asked to all study participants.
Conversely, focus groups are interviewer-led discussions between a group of people. The people selected typically will have something in common and the facilitator will pose open-ended questions to start a conversation amongst participants. Regardless of technique, qualitative research methods capture data to better understand human capital processes, functioning and employee’s experiences, in the employees’ own voices.
Leveraging People Analytics: Three Key Strategies
Below are three strategies that can be utilized immediately to effectively gather data that can aid in talent development:
- Performance Assessment Development: Performance assessments are a vital tool to maintain employee motivation, providing employee feedback on their current performance and developmental goals. Performance assessment tools include performance review questionnaires, employee competency models and 360 employee reviews.
- Existing Policy Review: Reviewing existing talent policies will help inventory the effectiveness of what policies are currently in place. This means accounting for all leadership development frameworks, professional development guidelines, recruitment and placement directives, and awards and recognition policies, and then evaluating their execution and impact.
- Organizational Network Analysis: Often an organization’s workflow does not follow the actual organizational chart. To determine how information actually flows through an organization, industry-experts deploy an organizational network analysis (ONA). ONAs are used to assess how an organization (or “network”) is structured between its leaders, employees, divisions, and other network stakeholders.
People Analytics, coupled with these three strategies, can redefine the way organizations manage talent. The future of HR is here, and it’s time to embrace it. How do you see employee data improving your organization? Share your experiences, insights, or questions about People Analytics.
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