Many HR professionals chose their field because they are good at dealing with people. “People analytics,” on the other hand, may sound daunting, or like an oxymoron, but it is how HR teams can move beyond the day to day process of dealing with people at the individual level to really analyze their organization in the aggregate. Basically, it’s the hows and whys of people moving through their organization. People analytics is how an HR department can apply statistics and technology to their talent data to better address issues in hiring and turnover, and ultimately develop long-term strategies for improvement based on the numbers—not based on hunches.

For most HR professionals, knowing your turnover rate is a relatively simple calculation. But if you dig deeper into the numbers with people analytics, you might assess first if employees leave voluntarily or if they have been fired. Too many employees leaving voluntarily suggests the HR team may need to address better retention strategies and employee engagement strategies or look further into the data on employee satisfaction.

People analytics can tell you which area you really need to focus on. Keeping data based on exit interviews is key, but people analytics takes the data a step further by combining different HR data systems like your Human Resources Information System and your Performance Management System to make the data truly meaningful and actionable. These systems collect vast amounts of data that often goes untapped in solving or even anticipating the people problems of HR. Combining the disparate data can tell you a lot about people and the overall landscape of your organization’s workforce. If, for example, your turnover rate results from a high number of firings, it’s time to assess if these issues stem from any particular department, or further investigate the data from your hiring process. 

The crux of people analytics is to develop a forward-looking strategy to improve upon the most important metrics established by the HR department. If you want to improve your turnover rate, following the numbers and discerning the reasons based on the data can help the HR team better assess which strategies for improvement to target.

People analytics can also go one step further. You can assess where vacancies are likely to open up in the future and anticipate your organization’s hiring needs, which can improve metrics like time to hire or cost per hire when it comes time for your next hiring campaign.

Why Your Organization Needs to Implement People Analytics

Here are the 3 key reasons to consider implementing people analytics into your HR program.

1. It helps your overall strategy

Using a software program that incorporates data science and machine learning helps develop strategic decision-making that benefits your organization overall. While HR departments aren’t known for raking in the money, they can better collect information on performance and assess the factors that lead to better engagement levels and performance scores, as well as how to retain better performers. Thus, the HR department can implement better employment strategies.

2. It gives you concrete evidence to offer

When you have to deliver bad news to an employee, having data at your disposal can help communicate and rationalize decision-making. The HR department often deals with touchy subjects, and having real data can temper the situation. With any HR intervention, data helps you “prove” to people the need for a change.

3. It gives proof of business impact

Decision-making based on gut feelings makes it hard to assess the impact of your strategies. When the HR department can show how their strategies have improved performance measures, for example, it makes a case for the ROI of people analytics and the HR department’s impact. So, how do your people policies affect the bottom line of your business? People analytics can tell you if you are on the right track in improving your metrics and can communicate the importance of the HR department to your organization at large.

Is HR Analytics the wave of the future or the present?

While people analytics may be new territory for many HR departments, the technology to implement data-based strategies and the benefits of people analytics have already been proven over the past decade from frontrunner organizations. While the role of the HR department is changing, HR department heads may be expected to be able to communicate their department’s analytics, or a data analyst on the HR team may become the norm.

The wealth of data housed in the HR department is just waiting to be turned into real dollars. While some HR departments may lack the analytics skills or may not trust the quality of their data just yet, people analytics is indeed a long-term investment and implementing a system (or a people analytics database) to integrate the data across your multiple extant data systems can be a game changer for making meaning out of the numbers and turning your data into insight.