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