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What is People Analytics, and How Do I Get Started?

Analytics are an integral part of everyday business management in many teams, but it can feel a bit daunting when you’re starting fresh. For HR teams, one challenge can lie in the presumed cost of such analytics. HR and Leadership teams often assume that people analytics are costly, require sophisticated systems, and provide limited insight compared with other areas such as marketing and audience development.

By Vanessa Landreneau

Analytics are an integral part of everyday business management in many teams, but it can feel a bit daunting when you’re starting fresh. For HR teams, one challenge can lie in the presumed cost of such analytics. HR and Leadership teams often assume that people analytics are costly, require sophisticated systems, and provide limited insight compared with other areas such as marketing and audience development. Nothing could be further from the truth. This article will outline a simple approach to get you started in providing valuable business insights by analysing data that you can quickly gather from your HRIS, policy documents, payroll and finance team.

People analytics insights can result in substantial business improvements for your organisation when used efficiently - and we're here to tell you how.


What is People Analytics?

Analytics just means a systematic data analysis that can help you find useful patterns in the data. It’s a way to step back and look at the bigger picture and can be an effective way of recognising and uncovering the hidden costs, inconsistencies and opportunities that lie within your team, your product/service, and your business as a whole. People analytics focus on your internal data; your findings may also lead you to make comparisons with external data through benchmarking of pay, training, team sizes, etc in your talent market.


How to Get Started with People Analytics

Determining the end goal and how you want to improve your business lies at the heart of people analytics. So, to get started, think about what you’d like to know about your business. 


STEP ONE: Outline the Question  

You can start with questions like these (or others that leaders or managers may have asked):

  • How does engagement vary across different teams and between different job levels?
  • How does diversity vary across different teams and between different job levels?
  • How long are employees staying with your business on average?
  • How long does it take to fill job vacancies? Is this consistent across different departments?
  • Do performance ratings vary across teams and different job levels?
  • How does employee engagement (and/or training participation) change with different lengths of service and employment? Are long term employees more or less engaged?


STEP TWO: Understand How Information is Related 

The next step towards developing people analytics is to consider how outcomes you have data for, e.g. pay, engagement scores, etc, are distributed in different groups of employees. This is where a little excel knowledge can come in handy - ask your finance team if you need pointers on how to analyse the data, but simple pivot tables are a great place to start.

Some examples of leading questions to ask here include:

  • Do employee activities and outcomes (promotion, training, retention) vary across job grades or categories? For example, are more senior roles more likely to have more spent on their training?
  • How much does pay vary for jobs in the same job level or grade? Are some roles or groups falling behind internal norms?
  • What is the average revenue per sales role by country/team in your business?
  • What is the distribution of job levels/grades across your organisation and within individual teams?


STEP THREE: Turning Analysis into Insight

As you work through Steps One and Two, continue asking questions that probe deeper into the fundamental findings. If you identify a problem or a potential opportunity, ask what may have influenced the situation and how it can be improved (or used to advantage). For example, noticing that your organisation is “top-heavy” could lead to an opportunity to support a graduate recruitment programme, especially if you can negotiate to retain the hiring budget and, thereby, recruit more (less expensive) heads.

Next, assess the current situation, including costs and potential gains, and decide on a target outcome that will allow you to track its success. Finally, identify who is affected by and what they can do to contribute.

Ultimately, your analysis will uncover:

  • Evidence of patterns and opportunities in the business
  • The scope and potential impact of each finding
  • Relationships between problems and/or opportunities
  • A starting point and a plan of action
  • A way to measure progress


Where to Find your Data

There are numerous data sources, with useful data often a lot more accessible than you may expect when you start looking. Here are just some of the available resources that you could consider to get started on your journey to insightful people analytics:

  • ERP
  • HRIS
  • Payroll systems
  • ATS (applicant tracking system)
  • LMS
  • Performance management systems
  • Employee surveys

You can combine data from these sources to understand more about the people and patterns within your business. Again, you will likely find that colleagues in different business areas can help with this, learning from your Finance, IT, and Marketing team to understand how they analyse commercial, customer and technical data to gain insights. 


What's Next?

Once you have understood your data and presented your analysis in a way that offers clear insights to business questions, the next step is to share your findings with relevant stakeholders. Be aware that this is likely to generate more questions! So be prepared to tweak your analysis and be clear about what information is available, what limitations there may be to insights and the importance of establishing a consistent set of studies to allow tracking over time.

To ensure that you receive support from the senior level in your organisation, deliver your findings with clarity and ensure that the benefits of people analytics are felt from day one. You will generally have a higher chance of success with executives if you present your findings via graphs and tables and demonstrate clear gains from your proposed interventions (or at least be very clear about the costs and why they are necessary).

Offering a couple of well-thought-through and costed alternatives for any identified problems will demonstrate a proactive and commercial approach to using insights gained from people analytics. Focus on the priorities for your business and what will deliver tangible results and effective change


The Takeaway

People analytics can open your eyes to challenges and opportunities within your business and help your business operate and organise your people more effectively. For more guidance and help introducing people analytics in your business, please feel free to get in touch with us.

About the author

Vanessa Landreneau is the founder and principal at Hummingbird Consulting. Hummingbird Consulting offers pragmatic, bespoke employee reward and analytics support for businesses going through, or planning for, change. Wherever you are in this process, we will provide a fresh perspective to help you improve existing pay structures, design bespoke solutions from first principles, or anything in between. Drawing on a diverse career in employee compensation, both in-house and as a consultant, Vanessa will act as your outsourced Head of Reward, working in partnership with you to find the best solutions for your business. Whether it’s a transaction or a transformation, pay benchmarking or job grading, introducing a new incentive plan or enhancing the communications to highlight what you’re already doing well, I’m looking forward to working with you!