Building a People Analytics Strategy: A Guide for Success

For years, HR leaders have faced barriers toward making strategic, evidence-based business decisions with people analytics. But often, it’s to no fault of their own—many HR professionals don’t have the right tools to collect, analyze, and interpret their people analytics data. 

Due to the current nature of the workplace, you can’t risk making decisions about your people that aren’t informed by data. That’s why every forward-thinking, growth-oriented leader needs to adopt a people analytics strategy that works.

What is people analytics?

People analytics is the collection and application of people and business data to important business decisions. With a strong people analytics strategy, you can uncover deep insights about your talent to make better business decisions. Insights that help you attract and retain top talent, boost engagement, and motivate performance. 

What are the important elements of people analytics?

It’s important to understand where your people analytics data comes from and how it connects to business success. Talent data is typically collected through:

• Demographics
• Tenure
• Recruiting data
• Time, leave, and absenteeism
• Employee engagement and survey items
• Talent management data
• Pay and benefits
• Employee assessment data
• Employee movements and development

And when you connect these data points to business outcome data, you can make strategic, evidence-based people decisions. Common business outcome data includes:

• Revenue, cost, profit, or loss 
• Customer satisfaction
• Sales
• Productivity
• Value created
• Performance

Examples of questions that people analytics can help you answer

From demographics and diversity to productivity and performance, people analytics can help you answer the questions that you need to know about your workforce. Here are some examples of common questions that people analytics can help answer: 

• Which organizational teams or locations have the highest and lowest diversity?
• Do your new hires increase the quality and productivity of your workforce?
• What percentage of employees voluntarily leave within 6 months? One year?
• What is the average time to full productivity of new hires?
• What percentage of below-average performers improve due to your performance management practices?
• Has employee engagement increased or decreased over the past 6 months? 1 year?
• What percentage of your workforce is strongly engaged and how does that vary by role or department?
• What percentage of employees would recommend your organization as a great place to work?
• What percentage of employees say that they understand why leadership makes changes? 
• Which skills are imperative to the organization’s future success and what percentage of employees possess those skills?
• What strategies are the most helpful in reducing absenteeism? 
• Is there a correlation between pay and performance?
• What’s the correlation between training investment and business profitability?  
• What percentage of top performers are at risk for departure?
• What skills gaps exist within your company?

How to build a people analytics strategy for your business

Building an effective people analytics strategy can seem intimidating. But when you leverage the right process, you’ll uncover key insights that are critical to strategic decision making. Here’s how forward-thinking business leaders are shaping their people analytics strategy. 

Identify goals and impact

For your people analytics strategy to be worthwhile, you have to outline what realistic business goals you want to achieve. Without a business problem that needs solving or an opportunity that you want to uncover, your resources will go to waste. 

A people analytics strategy can have a huge impact on retention, employee engagement, productivity, and hiring. And if you struggle in any of these areas, people analytics can serve as a tool to uncover insight, discover opportunities, and prompt the right action toward your goals.

Understand your data sources and gaps

Leaders need to create clarity around their data sources. Without clear, effective sources, you simply won’t be able to uncover the insights that you need. Luckily, once you understand which data sources are available, you’re on the right path toward discovering valuable employee insight. But until you assess and eliminate your data gaps, your insights won’t be complete. 

Data gaps happen when you don’t gather the full scope of employee information. These gaps are all about the data that you don’t have, but hope to collect. When you only focus on the data you do have, it’s easy to miss out on opportunities. That’s why leveraging many types of data sources helps you avoid data gaps and capture comprehensive insight about your people.

Data sources

• Customer data
• Transactional data
• Industry benchmark data
• Employee survey analytics
• People analytics software 

Understand your technology needs

The right technology can streamline and support your people analytics strategy. When you have little experience collecting, analyzing, and interpreting data, your data integrity can suffer and your findings will be less reliable. Plus, without the ability to connect your data to business outcomes and take the right action, your data is useless. 

That’s why successful leaders are leveraging a people analytics platform that helps them gather, understand, and take action on their people data. In fact, high performing organizations are 2x more likely to use people analytics software than low performing organizations. 

The right software will offer a suite of tools that help accelerate your business goals. Your platform should take administrative burden off of your teams, frequently monitor trends, and help you put your findings into practice in a more timely and effective way.

Integrate and collect data

To collect data, you first have to outline which metrics and KPIs you want to track. You should leverage data engineers and data scientists that have experience collecting and tracking quality data. Once you’ve shaped your analytics team, they can compile collected data in a process called integration. In this process, raw data is derived from your findings and constructed in a format that’s easy to interpret. This way, you can see important trends at-a-glance. 

Analyze your data

Visualizing your data is important. After it’s integrated, you can pinpoint employee patterns and trends that affect your business. You should be able to examine your data all in one place, seamlessly. 

The ability to splice and dice data between different demographic groups should be at your fingertips to uncover deeper trends about your workforce. Your data experts should help you interpret and understand the full scope of these existing trends so that you can connect them to important business data. 

Use your data to implement changes

After you’ve uncovered relevant trends, it’s time to create and implement a strategy. Bring your leadership teams into the conversation and clearly communicate how your findings support your solutions. The outcomes of your action plan should be clear-cut, direct, and logical to ensure the plans are adopted and contributed to by all. With the right data, insights, and action plan, you can tackle unique business problems and get serious about the opportunities that are essential to success. 

Ready to build a people analytics strategy that works for your business? Download The Beginner's Guide to HR Analytics and get the insight you need to move forward with confidence.