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The Power of People Analytics in the Modern Workplace

We’re fortunate to live in a time when it’s easier than ever to understand what motivates people to make decisions.

And it’s “big data” that we have to thank for it.

With more than half the world’s population now online, there’s unprecedented access to the habits, preferences, and processes that drive people. Most companies know who you are, what you like, and what it takes to get you to make a purchase.

And that’s why it comes as no surprise that to-date, big data’s primary role has been in the worlds of marketing and sales.

But what about the application of big data in HR?

If our marketing teams can leverage data to understand what drives leads to become customers, HR leaders can use similar data to convert candidates into employees.

i like that 

I’m talking about the growing field of “people analytics”: a data-driven approach to how HR leaders can hire smarter, retain employees, and create a better overall employee experience.

And in this post, I’m sharing a few big ways you can begin taking advantage of people analytics for your HR team.

3 Ways Big Data in HR Will Make Your Company Better

HR leaders are always on the hunt for new ways to improve the efficiency and effectiveness of their organizations.

Whether it’s using artificial intelligence to schedule interviews or the rise of microlearning in training and development, being on the forefront of new technologies means gaining a competitive edge in the battle to attract and retain top talent.

Because here’s the thing:

While 78 percent of large companies say people analytics is an “urgent” priority for their business, only 7 percent believe they have the capability to make it happen.

And with that in mind, these three strategies for bringing people analytics into the fold are the latest way HR leaders can take their organization to the next level:

#1. Uncover Your Most Valuable Talent

For most companies, the recruiting process goes something like this…

A hiring manager approaches the HR team with an outline of what they’re looking for in candidates for an open requisition.

The HR team then searches for those candidates. Unconscious bias inevitably bleeds in.

Then, candidates get screened and interviewed based on the hiring manager’s preferences — not any hard data associated with performance.

It’s the way most companies hire, but when it’s laid out like that, there’s some pretty obvious flaws, right?

People analytics have the power to change that.

By actually measuring and quantifying the long-term value of employees based on their degrees, schools, previous companies, and experience level, HR leaders can make intelligent hires that transcend biases and have a higher likelihood of adding value to an organization.

And there’s data to back it up:

According to one study, algorithmic hiring resulted in 7 percent higher supervisor ratings of new hires, 4 percent more promotions, and a whopping 11 percent higher ability to learn from training versus candidates hired based on a hiring manager’s “instinct.”

algorithm hiring

(image source)

But it’s not just about attracting the right talent. People analytics helps you retain your employees over time, too:

#2. Figure Out What Keeps Employees Happy

Figuring out the “secret” to retaining top talent has a topic of conversation among HR thought leaders for a long time.

In fact, according to a study from Kronos, 87 percent of HR leaders called “employee retention” a top priority for their business over the next five years. And it makes sense why:

While companies are investing in a better employee experience to retain top talent, attrition rates at many companies continue to rise.

It’s a big problem and companies are aware. Most HR teams track attrition and retention rates. But, few dig deeper into the underlying factors that drive employees to either quit or stick around.

As Ian Cook writes on the Visier blog:

“What [companies] need…is a way not just to see what happened, but to understand why it happened, what will happen next, and how to adapt their workforce strategy to align with company objectives.”

NPS surveys and exit interviews with employees leaving your company can offer information. But collecting that data takes time — in today’s competitive talent marketplace, most companies need help with retention today.

Which is why HR leaders should take a page from Nielsen’s playbook on people analytics for reducing attrition rates.

Rather than spending time collecting and analyzing new data points, Nielsen looked at what they already knew about they’re employees.

They compared data on employee ages, genders, experience levels, commute times, tenure, and manager ratings to figure out what made people stick around at their company.

And they found some interesting trends for their organization, including this one:

nielsen study

(image source)

Nielsen found that even a lateral move internally resulted in higher retention rates for employees.

And while that may not hold true across every company in every industry, it highlights the importance of people analytics in understanding what motivates employees to stick around.

Now, here’s the great part: once you have your employees locked in for the long-haul, people analytics can help you extract the maximum value from them as employees, too:  

#3. Unlock the Key to Employee Efficiency and Effectiveness

Every HR leader knows that training and development plays a critical role in maximizing the value of talent for your organization.

Employee development leads to higher engagement. Higher engagement leads to more revenue.

But according to Gallup, only 32 percent of employees in the U.S. are engaged.


And it’s not for a lack of training overall. 27 percent of companies are investing more today in learning and development than ever before.

The struggle comes from figuring out the right training that works for your employees. Again, that’s where people analytics can help HR leaders.

Marty Abbott explains it over on The IM Group blog:

“You can generally assume that your employees want the tools, knowledge and resources to do their jobs in the best way possible. It’s up to you to figure out how to equip them with exactly what they need. This is the crux of the argument for analytics. If you can understand where your investments are working (and where they aren’t), you have targeted intelligence to give your people exactly what they need, when and where they need it, in a format that makes it as easy as possible for them to take advantage of it.”

In other words: people analytics tell you what training works, who needs it, and the easiest ways to deliver it to your employees.

In turn, you end up with more engaged, more productive teams who can offer the maximum possible value to your organization.

Now It’s Your Turn…

People analytics are becoming a bigger part of how HR leaders make decisions about hiring and developing talent.

But there are certainly other applications of big data in HR that were not covered in this post.

How are you leveraging data to change the way your HR team operates? What’s working? What’s not?

Share your thoughts and ideas in the comments below.

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