Business growth: People analytics
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In the movie Moneyball, starring Brad Pitt as coach Billy Beane, data-based decisions were shown to work out very well for organizations. Beane used certain performance metrics to try and predict success for the Oakland A’s baseball team, as well as minimize his costs for hiring players. Long story short, it worked.
Sales, marketing, accounting finance, production, operations, information technology, and human resource departments use and analyze data every day. But of all those functional areas of management, human resources has lagged in the area of data analytics–until now. In light of several recent economic events, people analytics has become an important tool for maintaining and retaining staff for your company.
Simply stated, people analytics, also known as HR analytics or workforce analytics, involves the acquisition and use of employee data. This includes information which is used to reach, keep, and dismiss company employees.
Analytics has changed the way people communicate. With specific kinds of information, companies are able to analyze their data to predict employee behavior, align the employee experience with company needs, identify where training is needed, and provide the insight needed to achieve company objectives.
According to author Jean Paul Isson, studies have indicated that 60% to 70% of company expenses are employee related. While this is no surprise to most business owners, having the ability to address and analyze them by using analytics has a huge upside. Isson has written about “The 7 Pillars of Successful People Analytics Implementation.” Here is a brief summary of those pillars:
Workforce Planning Analytics: Should be the first step that will help you determine the kind of data your company will need in order to achieve your objectives. This pillar should include present needs as well as your future needs. Isson states the output of this pillar should be “the right skill sets, at the right place, at the right time, and at the optimal cost, so that your organization can drive performance. It also helps to anticipate workforce need by economic cycles.”
Talent Sourcing Analytics: The importance of this pillar is to not only search for the right employees, but to actually be able to source and hire them in your company. According to the author, “The sourcing analytics pillar is about using data to optimize your sourcing results, including how to determine staffing resources, and what channels and sources of hires will be most effective in engaging potential candidates.”
Talent Acquisition/Hiring Analytics: Of all the pillars developed by Isson, this one might be the most important. Irrespective of your company size, it is imperative that you hire the ‘right person’ for the correct position. You should first strive to predict and select who will be asked to interview for your opening. Your company needs to review and refine the interview process with appropriate questions that have been vetted from past successful interviews. You should also try and determine if testing can or should be used in the hiring process. The key analytical outcome is to make a positive correlation between the interview process and the ultimate performance of the individual that is hired.
Onboarding and Engagement Analytics: Upon hiring someone, your firm needs to align them with your company mission and goals. Isson suggests that, “Talent onboarding is an ongoing process that consists of introducing, training, mentoring, coaching, and integrating a new hire to the core values, business vision, and overall culture of an organization in order to secure new employee loyalty and productivity.” Analytics from this pillar should be developed to maximize the core values mentioned.
Lifetime Value and Performance: The relationships you have with your employees will, hopefully, last a lifetime. The author encourages employers to develop advanced analytics “to calculate the lifetime value of an employee in a certain role…then segmenting them into categories, such as marginal value creator, and proactively determining what it would cost to lose a top performer.”
Attrition and Retention: Isson indicates that, “Analytics can help to marry employee data, company data, and market data to predict and interpret top-performing employee behaviors, giving you competitive insights for your retention strategies.”
Employee Wellness: The primary support of this pillar relates to having ‘best practices’ that include wellness visits in order to prevent more major events from occurring.
You need to know the type and kind of people you want to hire. Your goal should be to find and predict what employees will be successful with your firm using people analytics. The challenge will be to use it in a transparent and responsible way.