HRM Five: High-impact people analytics

How organisations can reach analytics maturity and make data-driven decisions.
By: | May 27, 2018

According to new research from Bersin by Deloitte, the use of employee data to help optimise business and management decisions, is strongly related to improved talent outcomes and an organisation’s profitability.

In fact, high-maturity organisations, or those using people analytics in a sophisticated and insightful way, report an 82% higher three-year average profit than their low-maturity counterparts.

“People analytics has evolved into a powerful and important business discipline,” said Josh Bersin, principal, Deloitte Consulting LLP, and founder and editor-in-chief of Bersin.

“Organisations that invest in this area are seeing above-average improvements in employee engagement, performance and profitability. Yet despite these clear advantages, only 17% of companies have achieved these benefits and some are far behind.”

Despite the potential business growth and the value derived from people analytics, only 2% of organisations surveyed have reached the highest level of people analytics maturity. The majority of companies surveyed are still in the midst of building HR data warehouses, enhancing data security and accuracy, collecting data more regularly and consolidating their employee-related data.

Here are five ways, suggested by Bersin, that organisations can take to help improve their people analytics capabilities:

  1. Enable a thorough culture of data-driven decision-making.
    The highest performing companies are characterised by an entire culture of data-driven decision-making. From top to bottom, they use data for all selection, promotion, organisation and other people-related decisions. If organisations encourage senior leaders to continuously communicate the importance of data, this will likely foster a “data” culture.
  2. Develop data-friendly policies & infrastructure
    Analytics is nearly impossible without data accuracy, consistent definitions for key metrics, and strong privacy policies. It is critical that organisations invest in infrastructure to help integrate and clean up their employee data.
  3. Provide all HR staff with training in analytics
    Basic data literacy among HR practitioners is a bottleneck. The most mature companies have above-average skills in elementary statistics and data analysis among HR professionals. It is crucially important for organisations to provide both targeted and continuous learning opportunities for HR employees to develop their analytics skills.
  4. Develop multiple “listening channels”
    The more mature organisations use multiple “listening channels” to gather data from many sources, including HR systems, communications portals, feedback tools and other employee data sources. Organisations should build a listening strategy and think of ways to expand it over time.
  5. Integrate analytics capabilities across the organisation, not just HR 
    High performing analytics teams do not focus solely on HR. In fact, the most effective teams are integrated with other analytics, business, and corporate groups in the company. Organisations should structurally design their people analytics team to foster active collaboration.

    To be able to succeed, organisations should shift their cultural mindset from “HR measuring HR” to “HR enabling the business to deliver.”