People analytics: The key to driving business performance

It’s easy to get carried away with data. Lots of companies have become accustomed to collecting lots of numbers and many of them have become adept at using them to produce charts and reports that offer an insight into the people in their organisation.

But, it’s important not to lose track of the fact that data is a means to an end – and that end is about understanding and exploring the people employed in your business.

That’s where true people analytics comes in. HR departments who get this right will be able to get a granular look at the individuals they’re looking after and unearth genuinely helpful insight that can translate into practical action that can solve issues, increase efficiency and improve the performance of the business.

It’s often said, correctly, that people represent the biggest investment for a business. If we accept that, then we ought to also accept the need to strive to get the most from that investment. People analytics is key to this.

People analytics: The state of play

A global study undertaken by the CIPD unveiled some interesting facts about the use and effectiveness of people analytics. It showed that:

It works: In total, 65% of the people who work in companies that have a strong culture of people analytics culture felt that their business performance was strong. Only about 32% of people in companies with a weaker association with people analytics said that they were performing strongly. That’s a very clear and positive sign that people analytics has a direct and positive impact on the way a business performs.

Access is mixed: While 71% of HR professionals say they have access to people analytics data, that number is only 42% for people in finance professions. There’s clearly, therefore, a mixed picture and inconsistencies for this need to be addressed.

There’s a skills gap: The CIPD showed that the UK lags behind the rest of the world when it comes to having the confidence and expertise to conduct advanced people analytics. Only 21% of respondents in this country expressed confidence with this, compared to 46% in South East Asia. This matches the findings of our own research, which found that 75.6% of people feel that there is a shortage of digitally-literate professionals in HR.

The CIPD stated: “A key finding is the impact of low skills and low confidence on the quality of outcomes from people analytics. This is apparent across regions, but most pronounced for professionals in the UK and Ireland. UK HR professionals clearly lag behind international counterparts, particularly with regards to confidence in conducting people analytics. This is having an impact on the uptake of people data by non-HR colleagues, who are yet to see the value of people data and people analytics.”

Next steps for HR

There are good signs, therefore, when it comes to assessing the progress of people analytics. Indeed, Deloitte highlighted that 71% of companies see this as a high priority.

But recognising the importance and potential of people analytics is one thing and using this effectively is another – and we’ve already seen that the UK lags behind fellow nations when it comes to getting this right.

Businesses need to:

• Ensure their systems are fit for purpose – and neat and tidy. Line managers and HRs need a straightforward portal to log and access data, with user-friendly dashboards to give them an at-a-glance view of the metrics that are most relevant. Software and systems that don’t fit together and inefficient structures need to be ironed out so that people and processes make best use of the opportunity of people analytics. This means working with IT to ensure that data analytics is as user-friendly as possible. It also means exploring the different tools now available to help make this as simple as possible. With new technology coming on to the market, it’s important to review what’s available. Businesses should never assume they’re already doing things the ‘right way’.
• Get senior level buy-in. HR won’t get very far if they are swimming against the tide. Senior leaders need to be on board and that means taking time to explain the benefits of people analytics and a top-level understanding of what’s required to tap into its benefits. Data from the CIPD is highly useful in demonstrating the benefits to business performance from this approach.
• Embrace data skills. As highlighted above, there’s a lack of skills and confidence when it comes to HR people being able to use data effectively.
  There’s a real need to train existing HR people to become more effective at using data – and to hire in people to HR departments that have experience and talent in this field. Luk Smeyers, chief executive at iNostix, told Personnel Today: “HR must change the mix of its department and its priorities, or it will never evolve.” He added: “For example, when you’re hiring HR business partners, look at ex-consultants, people who can present business cases cross-functionally and with a lot of data.”
• Stick to their principles. That said, HR can’t afford to lose track of what it’s good at. Yes, it needs to use data more effectively but it also needs to free up its expert professionals to be able to use the ‘human touch’ to make a real difference. People analytics is not about using data blindly, far from it. It’s about providing evidence in order to make informed judgements. HR experts need to see this as a key part of their armoury, rather than something that sits separate from their work.

Two clear takeaways

There’s two clear messages for businesses here:

• People analytics does work and can deliver real change for the performance of a business thanks to effective employee monitoring, sickness management, training, recruitment and retention, and efficient processes.
• There’s work to do to ensure that businesses can grasp the opportunity it presents – with training, recruitment and cultural changes needed to embrace and embed best practice.

Get in touch if you’d like help gaining access to better HR analytics and insight.