People Analytics: Turning Employee Data into Actionable Insights

Jun 28 2022
11 min read
People Analytics: Turning Employee Data into Actionable Insights

Companies that have adopted people analytics are 10 times more likely to deliver effective insights to top management than non-users. In a digital universe where data is crucial, the recommendations of a people analytics system can boost workforce capabilities dramatically. But getting to that point can be a challenge for the whole organization. 

What is People Analytics? 

People analytics (also known as HR analytics, talent analytics, and workforce analytics) is the process of gathering, analyzing, and leveraging information about employees to make smarter organizational decisions. People analytics is a holistic process where certain steps need to be followed if the full potential of the technology is to be realized. 

The Four Levels of People Analytics 

  1. Descriptive 

This is the most basic level of HR analytics software and is used by the majority of companies involved in people analytics. The common tool of descriptive analytics is the dashboard, provided by people analytics software firms, where raw data is collected and presented regarding (among other things):

  • Hiring and other HR administrative costs
  • Training costs and effectiveness rates
  • Productivity measures such as revenue per employee and time tracking
  • Turnover rate
  • Employee experience and engagement statistics

Gathering this information is done in different ways, including accounting entries, surveys, performance reviews, and PDAs with employee tracking software. Descriptive analytics software often alerts HR and L&D staff to outstanding issues.  

  1. Diagnostic 

If the descriptive aspect of people analytics answers the “what?”, then the diagnostic portion answers the “why?”. It is here that the analytics team connects cause and effect to determine where improvements should be made. 

With so much data to analyze, it is important to set a number of KPIs so that the diagnostic phase has a set objective. For example, if you want to assess the effectiveness of L&D programs, you need to decide on what measure constitutes ‘success’. Perhaps you’d like to check if a communications course for the sales department has led to increased profitability. The related data might include performance measures, employee/manager feedback before and after the course was taken, and ROI. For each of these factors, a benchmark must be defined so that an objective pass/fail metric determines success. 

  1. Predictive 

Once HR has a set of challenges that it wants to deal with, it applies predictive analysis to test different approaches. Continuing with the above example, let’s say that the communications course has an ROI of X%. After a skills gap analysis, you also identify a general lack of communication skills throughout the organization. Predictive algorithms can then match employees at all levels of the company with an expert who specializes in communication for that exact group and forecast an estimated ROI for the entire initiative.    

  1. Prescriptive 

This technology is the “last word” in people analytics, as well as the last phase. Prescriptive analytics can be compared to Google Maps – put in the destination and the software will tell you how to get there, along with a number of other options. So, in the case of ROI, predictive analytics might give you a range of actions to take in order to improve the return of your L&D programs. To reach this point, the software will analyze all the relevant data that has been collected, along with AI-generated insights, to derive a set of choices. 

The Benefits of People Analytics 

As with many AI technologies, the power of people analytics is growing every day. Its’ many advantages can be felt at all levels of an organization.

As the principal users of people analytics, the HR department can experience increased ROI across multiple initiatives, including retention and equity, as superior performance is recognized and awarded. In the same spirit, people analytics enables the creation of holistic employee profiles that will lead to better-personalized development. HR also enjoys the many advantages of being prepared for future issues in the talent pipeline.

Similarly, with the increased attention on productivity that HR analytics software provides, top performers will be highlighted for purposes such as succession planning and internal mobility. Due to a better understanding of what creates high performers and what motivates mediocre performers, such information can also be used to improve the employee experience.

How to Get Started with HR Analytics

These are the basic steps of implementing a people analytics initiative:

  • Invest in a suite of people analytics software
  • Collect employee and productivity-related data 
  • Set goals and KPIs
  • Proceed through diagnosis, prediction, and prescription phases

Keep in mind that behind these steps is considerable involvement of the organization. The data for people analytics comes from people, and they need to report it. HR, therefore, requires the support of upper management to ensure the cooperation of stakeholders in the process. With everyone on board, companies can glean high-quality data that will ultimately help their teams perform at the optimal level.


1. What Are the 7 Pillars of People Analytics? 

In the book People Analytics in the Era of Big Data, the authors researched the most important targets of talent life cycle management. Based on this data, they identified the areas which are essential to address in the application of people analytics. They are termed “the 7 Pillars of Successful People Analytics Implementation,” and describe the elements that should be focused on using the relevant technologies and techniques:

▪        Workforce Planning Pillar – Assessing current and future talent requirements for the fulfillment of business objectives

▪        Talent Sourcing Pillar – Development of the hiring process, such as HR staff resources, techniques for role definition, and hiring channels

▪        Talent Acquisition Pillar – Designing the interview process, including questions and tests, and methods to correlate these items with actual success in the workplace

▪        Onboarding, Culture Fit, and Engagement Pillar – Introducing a new hire to the values of the company and initiating training for their role; ensuring a match between employee and company values; studying the workplace conditions which affect satisfaction and productivity

▪        Performance Management and Employee Lifetime Value Pillar – Assessing employee performance as a way to provide frequent feedback and set goals; designing employee retention strategies according to a numerical score based on long-term productivity

▪        Employee Retention Pillar – Understanding the reasons behind why and when top employees are at risk of quitting

▪        Employee Wellness, Health, and Safety Pillar – Determining which resources should be devoted to employee health, including medical checkups and psychological counseling

2. How Can One Be “Good” at People Analytics?

People analytics is a developing field, and it’s rare to find a company that’s highly involved with the prescriptive phase. Nonetheless, if an analytics team is producing actionable information, then they are doing something right. The common abilities of successful people analytics experts are:

Communication and Creativity – As mentioned, a people analytics process needs a goal, and that often depends on the priorities of the organization. It’s usually up to the analyst to translate a request from the CEO into something that can be handled by people analytics software. This requires both a deep understanding of what the company needs and an innovative mind that can manipulate the software accordingly.

Data Science – Academic and professional experience in data science is necessary, but as HR analytics matures, we can expect a range of specialties to emerge. The number of skills on a certain team depends on its size, but the larger ones often have experts in natural-language processing, quantitative psychometrics, and various programming languages.

Organizational Knowledge – Making the most of all of the data resources at hand requires knowing what is available. Top people analytics teams go beyond what is standard for HR purposes. They are able to use various company databases to find the information they need for the goal at hand.   

3. What Are the Best HR Analytics Tools?

There are a wide variety of people analytics software packages, and many of them have developed a reputation for better performance in certain areas. Some of the more popular platforms include:

Papaya Global is a SaaS platform that supports all types of employees, from full-timers to contractors, and permits the display of data for the entire organization on a single dashboard.

Tableau integrates multiple sources of data, including SQL databases, spreadsheets, and cloud apps, and then enables the user to display analyses in creative ways such as visual maps.

Visier People allows the creation of customized reports for HR requirements. It is designed for use by non-technical employees and so features a short onboarding process that can be subsequently enhanced by online courses and customer service agents.

No matter which platform a company chooses, there are a set of considerations to follow when purchasing an HR analytics system:

Integrations. Being able to access data from a variety of sources is essential. Of course, the program should cooperate smoothly with the main HR software package. Ease of integration with related systems such as enterprise resource planning, project management, finance, and scheduling should be assessed.

Interface. The user interface should be understandable by the entire team. Dashboards should be customizable and menus should be easily accessible. 

Functions. Essential functions should be usable without requiring extensive explanations, and most tools should be capable of deployment soon after onboarding. 

4. What Are the Best People Analytics Certifications?

In addition to prior education and experience in data science, productive HR analytics teams are constantly upgrading their skills. There are a number of courses and certifications that are worth pursuing. Universities are an excellent source of certifications but often have a fixed schedule. For busy analytics teams, online self-paced courses are preferred, such as:

The People Analytics Certificate Program by AIHR Academy

For those in the business of HR, the AIHR academy is a go-to resource, as is their certification for people analytics. This course is a year-long, comprehensive study for those interested in becoming familiar with people analytics. Topics include the basics of analytics and statistics, along with information about dashboards, HR metrics, and the use of data in business. AIHR also offers an extensive range of more advanced courses in people analytics.

People Analytics by the Josh Bersin Academy

Another well-known name in HR is Josh Bersin. His academy hosts an intensive, five-week introductory course in cooperation with the Visier platform (see above). It is aimed at teaching analysts how to unlock the abilities of higher levels of people analytics platforms such as predictive and prescriptive modes. 

People Analytics by Google

Through its re:Work program, Google offers a free online course that spans a range of people analytics topics. Users can browse subjects at will and proceed through course components at their own pace. Google even offers online tools to apply during the users’ learning journey.

People Analytics by Wharton University of Pennsylvania

Available through Coursera, this is a free online course consisting of approximately eleven hours of self-paced instruction. It is connected to a wider business analytics series, also offered by Wharton. The course reviews the basics of people analytics topics such as talent management, job design, and compensation.  

5. What Does the Future of HR Analytics Look Like?

The main challenge facing people analysts today is making full use of the technology. Usage rates as one goes from descriptive to prescriptive fall significantly. Similarly, most recommendations are provided to top-level HR managers, as opposed to line managers and employees.

As the knowledge of current people analytics spreads, however, it’s expected that usage will increase both in frequency and coverage. More organizations will deploy people analytics more often and for varying use cases, and secondly, they will produce results for reporting to lower hierarchical levels.  

HR analytics is currently the domain of larger organizations that employ thousands, and where analyzing HR data is a highly complex effort. As people analytics moves into the future, we can expect smaller companies to be able to get involved and reap the benefits, as well. 

Finally, because integration is an important aspect of people analytics, it is likely that an increasing range of technologies will be connected to it. These include blockchain as a means to protect sensitive data; natural language processing to match job offers with resumes; chatbots to gather employee experience information; and smart assistants to identify time-sensitive HR issues. 

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