How People Analytics boosts Productivity

People Analytics (syn: HR Analytics / Workforce Analytics) is mentioned in most Publications as HR Trend 2021 and beyond. People Analytics is about leveraging analytical insights from employee data to drive business outcomes, increasing performance, and improving employee experience (EX), human experience (HX) and well-being. It helps to create more cultural and economic value through the wise and ethical use of people data and analytics. It is all about data-driven decision making and transforming data and information into valuable insights.

Following the division of Al Adamsen & PAFOW, Inc. the topic People Analytics is on the table since 1920s and is more topical and urgent than ever before due to the increasing volume of data.[1] HR Data “Research & Analysis” exists since 1924, “Data Aggregation & Visualization” since 2001 and “Productization / Solutionize” since 2015 – all those areas make up for the People Analytics topic we speak of today.

For sure it will be important for HR to finally move from an asking function to an answering function. Or in other words to move from an administration function to a strategic function. Even today the HR Business Partner either goes with an empty sheet of paper or manually compiled figures into appointments with his Business Counterpart – instead of having valuable insights from business and HR-data at the push of a button on how to boost performance in the respective business area. It is vital that HR needs to deliver real value and unique benefits that cannot be delivered by any other function in the organization.

People analytics develops enormous potential by implementing data-related HR management and using it profitably in the company. The advanced use of data analytics for HR can boost the company’s turnover. Advanced Analytics, aka predictive and prescriptive analytics combines data with machine learning and artificial intelligence to predict future outcomes and take business and people actions at the right time. Gone are the days when gut instincts made the difference between success and failure.

“Without data you are just another person with an opinion.”
(W. Edwards Deming)

The complexity of today’s business world and processes require valid insights that are gained from data to make the final decision based on evidence. And the positive effect is as easy to understand as it is great: if the quality of the decision increases, productivity increases.

A study from University Lichtenstein and IT University Copenhagen (2018) found out that the usage of big data and analytics improves productivity on average by 3.75%. In IT and competition intensive branches the increase was even higher between 5.7% and 6.7%.[2] Recent studies increase this value to almost 12% (see below).

Oracle and WHU conducted a global study (2019) that found out that Technology increases Business Efficiency by 4.6%. However, Companies can add seven key factors to reach the full potential of 64% increase in productivity, which leads to 42% increase in organizational performance [3]. Most important message: HR plays a key role in the future success of companies! Data-driven decision making contributes with the largest share of 11.7%.

Seven other factors influence performance. Source: Oracle / WHU, The Adaptable Organization Model (2019)3

HR needs Innovation. Not enough progress was made during the last ten to twenty years of HR Transformation. Significant corporate growth is only possible with measures to promote a culture of innovation – and this undoubtedly includes innovations like people analytics for HR management.

But first things first. Where to start?

  • Focus on the topics that are most important for the business.
  • Start with the easier ones to fast-start making impact. Work your way up to the more complex tasks later.
  • It is unlikely that companies have too little data – rather too much. But not every data has the same value. Therefore, it needs to be sorted out which data are valuable for the topic.
  • Data needs to have good quality. If not, the data needs to be cleaned at the source. Otherwise, it leads to “garbage in – garbage out” and the analysis result could be wrong and lead to not meaningful decisions.
  • Combine data from different sources, that have been stored in silos, to produce cross-functional findings.
  • Data is great, but it will not move mountains on its own. The dots need to be connected in context. Always keep in mind, what the user needs to answer with the data. Involve people who understand the organization’s challenges and have broad experience and knowledge.
  • Get over the mount of complexity and create ingeniously simple insights and conclusions.
  • Visualize your data and outcomes. Transform the discovery output into user-ready presentations. This helps to order the gained insights, improves comprehension, interpretation, and memory.
  • Make sure your HR Team is open to put data at the heart of their arguments and solution design to the business.
  • Finally: Amaze and inspire your audience with gained insights and conclusions and make sure adequate actions will be taken to realize the benefits and productivity gains.

In practice, there are only a few companies that have already implemented people analytics that go beyond operational or advanced reporting for HR data. So, the potential is still largely untapped. That needs to be changed – it is not that difficult.

So, do not wait any longer and give it a go!