The State of People Analytics: Still Under Construction? An Overview

The State of People Analytics: Still Under Construction? An Overview

Last August, the New Talent Management Network published an interesting report on The State of People Analytics. Here are some of the most interesting findings we...

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3919 1

Last August, the New Talent Management Network published an interesting report on The State of People Analytics. Here are some of the most interesting findings we selected for you.

People analytics is still early stage

Everyone is engaging in people analytics.

According to the report, 85% of organizations say they engage in people analytics. Of the 15% that’s not engaged in people analytics, 69% expects to start in the next 12 months. In other words: 2017 will be a good year for people analytics.

The level of analytics, however, is quite basic. Most companies engage in fundamental analytics. High-level analytics, like (automated) decision management, are rare.
The 5 stages of people analytics

People analytics focusses on basic analyses

The picture below illustrates what people analytics are produced. The most common analytics are quite basic.

Turnover analytics is often a starting point for people analytics. This is a pattern I often see when companies start with people analytics.

In addition, the more traditional HR metrics are a starting point for analytics. Examples include the 9 grid, time to fill, and cost per hire. These are the so-called stage 2 ‘fundamental’ analytics. Like we said before: more advanced analytics are rare.
Types of people analytics

Data quality is bad

Data quality is a problem that’s talked about often in the analytics community.

HR data is often described as dirty and unreliable. This stresses the importance of data cleaning. Data is also often dispersed across different systems and data quality is low.
The state of people data

This results in data quality being a barrier towards successful people analytics adoption. 65% of respondents report that data quality hinders the success of analytics!

The report describes HR data as inconsistent, unreliable, scattered and inaccurate. The lack of clean data is blocking the road to people analytics success.
One of the more interesting findings of the report? 60% of respondents mention that HR analytics tools hinder people analytics success.
Quality of HR tools/software

This is telling of the state of HR analytics tools. I think this can be best explained by looking at the previous image: HR software often causes data to disperse across multiple systems. This inhibits successful analysis.

It also emphasizes the importance of making a distinction between HR analytics tools and HR reporting tools. This is something both practitioners and researchers often fail to do.

Lessons for people analytics leaders

The somewhat grim report ends on a high note: Five conclusions which are relevant to people analytics leaders.

  1. Know how data-driven you want your organization to be
  2. If you want to be data-driven, you need to act data-driven. This means that data collection procedures need to be accurate and consistent all over the organization.

    If this is not the case, you will run into problems. When your HR data is bad, all HR analytics results will be questioned.

  3. Know what question you want to answer
  4. People analytics is not a shotgun. It’s a rifle. Know what questions you want to answer and use analytics as a tool to answer them. What are the five big questions you want to get answered this year?

  5. Know your audience
  6. In line with the previous point, you should know your audience. Do you know the top 3 priorities of your CEO? A tip from the report: Ask your executive team what insights they would pay you to generate.

  7. Should you do the analysis yourself?
  8. The report ends with an interesting question: If you pay your people analytics director 200 000 dollars per year, what would you get for that same money when you would hire an external firm? This is a question every analytics leader needs to be able to answer.

  9. Don’t overpromise and underdeliver
  10. As an analytics leader, you should never overpromise. A lot of companies still work with Excel. In addition, most companies lack the ability to produce anything other than basic insights. The people analytics journey is exciting – but can also be tricky. The best strategy is thus to underpromise and overdeliver.

The report is a bit skeptical about people analytics. People analytics suffers from a few childhood diseases that it needs to go through before it grows up. Yet, there’s hope. Almost all the major organizations are engaging in people analytics. The demand is astronomical and people analytics slowly starts to make an impact on how businesses manage their people.

Note: The report used the input of 102 individuals working for large companies. 78% of the respondent’s companies had a revenue of over 500 million dollars. Click here to find the full report.

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