Businesses using people analytics see a 25% reduction in employee turnover. Data-driven insights have exploded in every sector, and human resources are no exception. Technological advancements like cloud-based HR systems, advanced analytics, artificial intelligence (AI), chatbots, virtual reality (VR), augmented reality (AR), gamification, automation, blockchain, etc. are transforming the way businesses work, but when it comes to HR, arguably it’s people analytics that’s impacting day-to-day decisions the most.
People analytics is redefining the future of businesses and how to manage their workforce. It helps organizations enhance their workforce’s potential and become the edge of human resources. It helps build an organized structure by driving data-driven decisions in the organization. People analytics involves the capabilities of talent management and workforce planning and simplifies the HR management process.
Real outcomes of businesses using people analytics
- 71% companies adopt people analytics with 31% says it is crucial for making evidence –based HR decisions that increases business performance – Deloitte
- Companies see up to 20% reduction in HR-related costs by automating tasks and enhancing workforce panning
- Several organizations report there is a 12% increase in employee engagement, as data-driven insights help in better employee experience.
- Companies using people analytics enhance their capability of diversity and inclusion of hiring process up to 20%
What is People Analytics or HR Analytics?
People analytics or HR analytics, refers to analytics that can help managers and executives make better management and business decisions about their employees or workforce. It is often integrated with a Human Resource Management System (HRMS) and has eased the transition of HR from being a transactional and reactive administrative arm to a strategic and proactive one.
Shifting to data-based people management
Organizations everywhere are perceiving it as a business function focused on using data to understand every part of a business operation, aiming to become digitally powered people-centric enterprises based on real-time actionable insights. As per a study conducted by Deloitte, 71% of companies see people analytics as a high priority in their organizations and 31% rate it as very important.
Today’s businesses value evidence-based insights as they enable better decision-making in all HR tasks, starting from recruiting to compensation, workforce planning to retention. Besides, as people’s costs often surpass 50% of corporate variable costs, it is only sensible to manage such large expenditures analytically rather than subjectively. Google had implemented people’s analytics long before it became a trend, and it also uses feedback to optimize various aspects of its people processes and create a unique and rewarding work culture.
So, how exactly is people analytics benefiting businesses?
Strengthen Decision Making
At it’s very core, people analytics aims to provide organizations with more data, enhance clarity in perspectives, and empower definitive decision-making. It enables organizations to manage their employees more efficiently and effectively by providing options for viewing, understanding and acting on talent data across the entire employee lifecycle.
Recruiting Right
HR professionals won’t shy away from admitting that there is a fair amount of instinct involved when hiring an employee, which may or may not be proven right in the long run. People’s analytics can take this guesswork out of the hiring process, analyze the possibility of a candidate being the right fit for an available post and even predict a tentative candidate based on skills, interests and actions.
When hiring a candidate, personality and skills are just as important qualifying factors as the candidate’s academic credentials and professional experience. Data analytics helps to meet the exact criteria an employer might have by crunching numbers more accurately. To give an example, JetBlue Airlines previously emphasized niceness’ as the most important attribute for flight attendants. However, after conducting a customer data analysis with the Wharton Business School, they found that ‘being helpful’ trumped niceness and henceforth shortlisted candidates more effectively.
Additionally, sourcing, hiring, training and nurturing talent are all time-intensive human resource processes. People analytics allows you to identify the people and programs that are appropriately aligned with your business, enabling you to optimize your time and investment, thereby saving time.
Establishing an Organization as an Employer Brand
Establishing a strong employer brand is a necessity today. A recent study found that 84% of employees would not hesitate to switch jobs (along with a minimum salary hike) if their new employer had a stellar reputation. But how can people’s analytics help businesses avoid such a situation?
Once an organization pens its brand strategy from an employee-shareholder viewpoint and confidently differentiates itself from competitors, analytics can help to understand how the current brand stand compares with reality. Analysis of the findings from regular sentiment analysis, internal surveys, and employee participation rates in community activities reveals how happy employees are currently.
One crucial point to remember is that people’s analytics is not only about keeping current employees satisfied but also making the business appear attractive to outsiders, including ex-employees. Taking everyone’s opinion into consideration also helps to understand how an employee, current or former, is likely to recommend the employer to others.
Improve Retention
Employee acquisition costs more than retention. And People Analytics offers an answer. Its predictive modelling can help identify flight-risk employees before they consider leaving. Accordingly, the management can take proactive steps to encourage them to stay.
Drive Accountability
Till now, stakeholders have had limited insight into individual employee performance and had to depend on manual reviews and reports for the same. Analyzing long reports is time-consuming, with ample scope for human error. Now, with people analytics, data visualization has enabled access to easily understandable insights that can be acted upon easily and instantly. Transparency of information has also increased accountability for both employees’ and HR’s parts.
Improving the Employee Experience
One area that HR constantly struggles with is designing compelling user experiences for employees, especially ones that support engagement and improve loyalty. People’s analytics can enable HR design activities that would successfully improve experiences for their employees, and in an ideal situation, others too. For instance, to improve employee wellbeing after considering employee feedback about work-life balance, Google in Ireland started the “Dublin Goes Dark” initiative. In this campaign, employees were encouraged to leave their devices at work to help them truly disconnect and switch off. On the other hand, this Japanese company pays its employees to get a good night’s sleep and not overwork, inevitably compromising their health. Many Japanese companies have been encouraging employees to take time off to rest in an attempt to change Japan’s overworking-to-death culture, named Karoshi.
The role of human resources has been evolving, and people analytics, understandably, is an integral part of this shift. With the growing demand for high-performing, specialized talent, HR leaders now leverage analytics to seek answers to critical questions about workforce planning, skills gap and employee retention, which ultimately enable them to add value to their organizations.
Robotic Process Automation (RPA)
Robotic Process Automation (RPA) is a fast-emerging practice expected to be a game changer in enabling financial institutions to step up their digital transformation initiatives. It helps to accelerate operations by executing previously programmed algorithms across varied ranges of structured and unstructured data. RPA not only enables faster and more informed decision-making but also simplifies compliance and regulations for banks, auto-generates reports and facilitates operational cost reduction.
Artificial Intelligence (AI)
Artificial intelligence (AI) is becoming increasingly important, both for enhancing the capabilities of BFSI institutions and for meeting business needs. In recent years, there’s been explosive growth in the availability of technologies like cloud computing, blockchain, AR and VR, machine learning, etc., all of which have led to a constant influx of structured and unstructured data. That, coupled with increasing competition and demand for innovation, has necessitated the use of AI in financial services. AI’s reach is all-encompassing, impacting strategizing, marketing, compliance, security and the customer experience.
“86% of bank executives agree that the widespread use of AI provides for a competitive advantage beyond cost.” – Accenture
Open Banking API
While open banking began in 2018, banks understand its true potential only today. By enabling customers to securely share their account and payment data with third parties through application programming interfaces (APIs), banks are looking at expanding their services. This open banking revolution speaks of greater collaboration and may soon lead to the creation of a more inclusive banking ecosystem that may comprise many other businesses besides financial services, all aiming at making customers’ experiences more fulfilling. While customer consent is the bedrock of this technology and the market still has a long way to go until maturity, the technology has started improving on precision.
Smart Machines
The impact of smart machines, including virtual customer assistants, virtual personal assistants, smart vision systems, smart advisors and a wide variety of natural-language technologies, is becoming more and more evident. Both banks and customers are increasingly depending on virtual concierges for hassle-free operations and better engagement. Understandably, customers will soon prefer banks offering maximum convenience with minimum friction.
Conclusion
In the end, businesses adopting people analytics and implementing it in HR management revolutionizes the organizational growth. It helps in streamlining the recruitment process, boosting decision making, enhance employee retention and increase overall productivity. By channelizing compressive analytics and advanced technologies, businesses can streamline their operations and drive sustainable growth for their organization.
