Chris Russell

2 min read

Human Resources

What Is People Analytics?

BBVA, USA, a large, regional bank knew turnover was a problem. It was clear from the HR reports. But before they could address it, the HR team first had to know what jobs and where was attrition the greatest. 

For the answers, they turned to people analytics. Analytics identified the jobs most at risk and the branches for the biggest share of the turnover. Armed with that knowledge, BBVA developed a plan targeting those jobs and those branches, and cut turnover almost in half.

Impact like that is why people analytics is becoming such a key part of human resources.

But just what is people analytics? Or, as it’s also called, talent analytics, workforce analytics and HR analytics.

Defining People Analytics

It’s the collection and analysis of HR and organizational data to provide insights into problems or practices with the objective of improving business performance. Some answers to what is people analytics are broader, taking into account external data such as industry benchmarks.

Toolbox goes even further defining it as “the deeply data-driven and goal-focused method of studying all people processes, functions, challenges, and opportunities at work to elevate these systems and achieve sustainable business success.”

However it’s defined, global analytics consultant David Green says in LinkedIn’s 2020 talent trends report, “Providing insights to support better decision-making is the key purpose of people analytics.”

The pharmaceutical firm Johnson & Johnson put that to the test a few years ago. Company recruiters were shifting away from recent college grads in favor of hiring more experienced workers. Acting on instinct, recruiting teams claimed experienced hires made better workers and stayed longer.

HR leaders weren’t convinced. So they turned to their people analytics group, which found the recruiters were wrong. New grads not only performed almost as well as the seasoned workers, but they actually stayed longer.

The analysis, explained the head of the people analytics team, “dispelled a myth in our organization.” After the analysis was reported, college hiring jumped by 20%.

Results like that – and there are many, even more dramatic such as an IBM attrition project that saved the company $300 million – are making people analytics a core HR function. Now, instead of asking “What is people analytics?” HR leaders and C-suite executives are asking how to implement analytics.

A study published in Journal of Organizational Effectiveness People and Performance, declared: “By 2025, HR analytics will have become an established discipline, will have a proven impact on business outcomes, and will have a strong influence in operational and strategic decision making.”

LinkedIn’s survey of HR professionals found almost three-quarters believe people analytics “will be a major priority for their company over the next 5 years.” Still, a majority of these professionals admit they “need help putting basic people analytics into practice.”

Perhaps for that reason, the analytics consultancy Millan Chicago, sees “the gradual mainstreaming of people analytics” as the most important trend in analytics this year. “As businesses begin to realize the critical importance of data, investing in analytics will no longer become something ‘shiny and new,’ but rather a business essential.”

Instead of asking “what is people analytics,” HR leaders are recognizing what people analytics has done to improve business performance wherever it’s been adopted and are hastening to do the same for their organization.

John Zappe, contributed to this article.

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