Six reasons why people analytics will be central to the future of HR
The Danish physicist and Nobel Prize winner Niels Bohr once mused, “Prediction is very difficult, especially if it’s about the future.”
This is partly why I have finally given up predicting at the start of each season that Liverpool will win the Premier League, and have demurred in forecasting that 2017 will be the year that people analytics will go mainstream.
There are many reasons why people analytics has not yet crossed the chasm and widened its adoptees beyond visionaries to pragmatists.
Firstly, like pretty much any business trend, growth tends to be exponential rather than linear.
Secondly, and perhaps more pertinently, many professionals (in particular Chief Human Resource Leaders and HR Leaders) have still not grasped what people analytics is (clue – it’s not reporting) and the potential it offers to drive better business outcomes as well as improved employee experience and wellbeing.
Nevertheless, there are reasons for optimism as a number of indicators suggest exponential growth is close. As such I feel safe in writing that in the next three to five years, analytics will become a core and central discipline of HR.
Here are six reasons why I believe that people analytics is shifting from the periphery to the centre of the HR agenda.
1. People analytics is the centrepiece of a digital HR agenda
We are in the midst of the fourth industrial revolution. Digital is challenging every single business model and reshaping the way we work as well as our experiences as customers and employees.
Regarding the opportunity digital offers to HR, CHRO of Unilever Leena Nair said in her keynote at the recent Beyond Global HR Leadership Forum “we can't say the world around us is changing, but HR will keep doing what we've always done.”
This definitely applies to the need to embrace analytics; not only will the next wave of HR transformation be digital, but people analytics will be at centre of this agenda.
I like the model below from TI People, which illustrates how developing capability in people analytics is required to deliver initiatives to i) improve and personalise the employee experience, and ii) design new organisational structures and how work gets done.
2. Those that aren’t good at people analytics are not ready for AI in HR
In the digital world we now inhabit, employees expect a similar experience at work to that they enjoy as customers.
This can be broken down into two categories: i) personalised services that enhance the employee experience, and ii) the ability to provide and receive feedback in real-time.
What most organisations don’t realise and what most vendors fail to mention is that unless you have invested in people analytics, you won’t be able to do AI in HR.
For example, how can you recommend training courses or internal opportunities to employees if you don’t know their skills, motivations or aptitude for learning?
Similarly, what is the point of investing in employee sentiment programs if you don’t analyse and act on it? People analytics is a core requirement to the consumerisation of HR and digital listening initiatives.
3. People analytics underpins organisational design and new work models
There is growing recognition that the rigid, bureaucratic and hierarchical organisational models of the 20th Century are not fit for purpose in the digital era.
For most global organisations this requires a radical rethink of how they are structured, how work gets done and how the workforce is composed (e.g. the mix between employees, contractors, consultants, outsourcing and automation).
People analytics (particularly when coupled with organisational network analysis) can provide insights that enable companies to identify the right structure and environment to improve areas such as collaboration, innovation, skills management, team effectiveness and culture.
4. New and emerging data sources will help companies improve competitive advantage
Companies that have already developed capabilities in people analytics are in pole position when it comes to harnessing new and emerging data sources that can really move the dial in terms of competitive advantage. For example, email meta data can provide insights that can improve productivity, manager effectiveness and employee development.
The same goes for data from wearables and sensors.
One example of this is when Humanyze provided employees at different branches of a European retail bank with digital badges to measure how they were collaborating with each other.
The data showed for the highest performing branches met the hypothesis that these branches also had the best inter-connected employee social networks.
In another (less well-performing) branch, the data showed there were two distinct but separate social networks.
On further investigation it was found that one group worked on the first floor, the other on the second and never the twain shall meet. As a result of this finding, the bank moved away from multilevel branches and implemented a desk rotation policy to engender better collaboration.
5. People data needs to be put in the hands of the people in the business that need it
People data is critical to helping businesses make decisions such as where to locate a new office or team, whether a merger of acquisition should proceed or whether the organisation has employees of the right number and skills to execute the business strategy.
Developing capabilities in people analytics and supporting technologies to collect, store and dynamically visualise data can put this information at the fingertip of the leaders in the business that need it.
This ‘democratisation’ of data can also help guide managers on employee development and employees to better manage their careers, performance and productivity.
6. There is some serious talent in the people analytics space
I’m fortunate to spend a large majority of my time with the visionary companies that have successfully adopted people analytics.
Let me tell you that there is some exceptional talent in the space, particularly in the Head of People Analytics role.
These people are supremely intelligent, highly driven, curious and collaborative individuals. Many don’t have HR backgrounds but have been attracted to the fertile ground analytics offers and also the opportunity to make a difference for the employees.
They are too good to fail and their number is increasing all the time.
Given the other five factors, I find it impossible to believe that they won’t breach the HR citadel and imbue a fact-based and analytical mindset among their wider colleagues in the HR discipline. This is a prerequisite to making people analytics sustainable in the long run.
Analytics is no longer just a good idea
So rather than being a luxury appendage, analytics is a core component of future HR and absolutely critical if the function is going to provide a positive impact to the business and its employees.
Principal and Founder of Bersin by Deloitte Josh Bersin said earlier this year that “analytics is no longer a ‘good idea’ for HR, it is now mandatory.”
It’s difficult to disagree.