People analytics: Where data meets human decision-making

People analytics, as a specialised field, is now essential for most organisations aiming to improve their performance. By adopting a multidisciplinary organisational approach, it delivers actionable insights through data collected from the employment lifecycle and practices as they relate to organisational strategic goals. With a heightened focus on performance and productivity, people analytics helps pinpoint areas for enhancement and innovation, reduces operational costs, and offers a deeper understanding of organisational culture, leadership, and processes.

While HR analytics utilises employee-specific data, such as employment status, health records, and mandatory training records, people analytics intelligence comes from outside of HR and more broadly from the organisation, for example, by using a balanced scorecard. Interventions based on people analytics, therefore, require the engagement of business leaders in reviewing the collated data and findings. This facilitates resource investment agreements in identified areas of improvement, as well as determining whether the pace of intended change needs to be radical or gradual.

The balanced scorecard and key performance indicators serve as analytical tools that, in turn, inform predictive analytics, aiding in the understanding of emerging patterns and past trends to determine the necessary course of action. For example, workforce planning employs predictive analytics to achieve strategic business objectives.

Transformative power of people analytics

People analytics, by its very nature, is an agile tool, and one of its outcomes is to foster a continuous improvement mindset that increases the likelihood of leveraging new business opportunities and innovations from the outputs it produces.

Through its measurement and analysis of data to optimise performance, people analytics can help identify the problem the business is facing or trying to solve. Crucially, data insights support a shared understanding of the issues, enabling the development of interventions that enhance performance.

An effective agile organisation promotes analytics literacy at all levels, utilising its existing technical platforms and systems while striving to integrate emerging technologies like AI. This enables the creation of interventions that genuinely reflect real work scenarios through the collection, analysis, and reporting of data as close to the organisational context as possible, incorporating human cognition. Consequently, it achieves both “quick wins” and offers insights for long-term organisational strategy.

Impact on decision-making and performance outcomes

People analytics support decision-making based on business data. The quality of information extracted from data platforms, including people analytics, influences the quality of organisational decision-making and leadership commitment to drive transformative change. This is because people analytics uses information from multidisciplinary fields and diverse stakeholders, considering people’s perceptions, interests, and preferences that aid in identifying improvements needed to optimise customer and employee engagement. Externally, the data helps build collaborations, including agreeing on common objectives and expected outcomes for core system-wide workforce issues, such as future capacity and capability gaps.

Data protection and governance

People analytics allows organisations to stay informed and competitive by providing an evidence-based foundation for potential transformative opportunities. It helps understand how innovation, as an organisation-wide change strategy, is believed to deliver change and add value in specific areas of improvement. Clarity on data extraction, usage, and purpose informs strategic priorities. This must be supported by strong governance frameworks, ensuring that people and leaders feel confident when using the information from legal and ethical perspectives.

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With AI, the importance of strengthening governance systems has never been more vital. Most organisations maintain a strong framework for data governance, covering technological, legal, and people-related concerns. However, as people’s analytical information is not managed by a single entity—such as HR—but is generated and used within a multidisciplinary setting, the risks and challenges of data breaches are significant. Addressing any flaws in current people practices or systems through the perspective of people analytics helps implement improvements, supporting the broader productivity goals.

Potential pitfalls

The central premise of people analytics is its promise of objectivity and transparency of data for business use. The often-used analogy is “let the data speak.” While this generally applies in most situations, overreliance on data and algorithms can create overconfidence in data, neglecting the complexity of human knowledge and its interaction with the work environment. Enhancing the benefits of people analytics should not diminish human decision-making or the structural and cultural subtleties, as prevailing practices and operational rules are likely to influence its adoption for innovation.

While people analytics promises improvements in decision-making, resource allocation, and customer satisfaction, the time spent reimagining practices is often reactive, lacking ongoing programmes in data literacy and a structured adoption approach. This is because, although organisations are quick to implement data and deploy advanced technical systems, including the adoption of AI, they often overlook their core value proposition. Consequently, their data literacy programmes may lack the necessary weight to significantly influence the adoption rate.

Commitment from visible leadership willing to review and act on data insights will likely sustain engagement, creating business empathy to accept and realise the potential of people analytics.

To ensure fairness and consistency in handling employment matters, the data insights must be compared with other complex interdependencies. For example, exploring the human stories behind the figures or other qualitative data helps guarantee fairness and generates alternatives that foster innovation.

The advantages of people analytics should not replace human decisions, assessments, and intuition, but enhance them to maximise organisational competitive advantage.

About the Author:

Shilpi Sahai is an HR Professional that specialises in people strategy and transformational change and holds a M.A in Applied Psychology and a M.B.A. She is a Fellow of the Chartered Institute of Personnel and Development (CIPD).