The role of the Human Resources function is to ensure that the organization has the talent it needs to execute its strategies, making HR a strategic partner for the business. So if you’re an HR leader, your focus must always be on making the best talent decisions – best for the organization and best for the people in it. People analytics (PA) is the most important part of your HR strategy because the best decisions are always data-driven ones.
Mission of HR: Deliver a sustainably high-performing workforce that is engaged in their work, having positive, inclusive experiences with the organization, its leaders, and their team.
I think of HR strategy as having two pillars, each critical to the successful execution of an individual HR team’s mission. The first is the delivery and engagement/execution pillar, and it represents the HR organization’s systems, goals, metrics, processes, policies, procedures, and programs.
Pillar 1: Delivery & Engagement
|Talent & Workforce
|HR Operations &
But data is not information, and information is not knowledge. The best decisions involve all of these attributes. That’s why the second pillar of an HR strategy is decision support. People analytics is the engine that powers the decision support for talent. It consists of the systems that organize the HR data to generate insights, the products that enable the PA team to achieve scale, and the services the PA team will deliver directly to leaders. These elements will enable the organization to make the most optimal people decisions for the organization.
Pillar 2: Decision Support via People Analytics
Reporting & Analysis
|HR Operations &
Without people analytics, the human resource strategy won't be supported by sound decisions and can't be implemented. This will jeopardize the HR mission and risk the overall organizational strategy. On the floor, this can manifest itself as having the “wrong people in the wrong seats” or leaders making decisions that result in a sub-optimal or under-utilized workforce or introducing risk.
Learn how to calculate the value of people analytics.
Do you need a people analytics strategy?
Yes, of course. Strategy involves making resource and prioritization decisions. All people analytics strategies must balance technology and consulting choices and recognize that there is no single strategy that's suitable for everyone. Some organizations need decision support tools that are quick and flexible. Others require robust and secure tools to support extremely complex decisions and are willing to sacrifice speed. And the incumbent capabilities and change readiness of each organization will vary. A sound people analytics strategy will support the ways in which your organization makes decisions. And yes, your people analytics strategy should be aligned to support the overall organization’s strategy and the HR mission.
People Analytics Mission: Ensure that people decisions at all levels of the organization can be informed by quality data and insights, delivered through products and services that are ethical, easy to use and supported by effective communications and training.
People analytics teams will vary in their strategies for technology, deliverables, operating model, internal collaborations, and communications.
Your people analytics strategy should articulate the technologies, deliverables, operating models, and methods of communication that will enable the best talent decisions. These decisions will be made by central groups such as the HR leadership team, as well as HR and business leaders in every part of the organization. The value of people analytics is to be measured by the improvement in talent decisions.
But how do you conceptualize that value, nevertheless measure it?
The People Analytics Value Cycle
The value of people analytics is the degree to which people data and insights are integrated into the organization’s talent decisions. People analytics deliverables that are underutilized such as unused models, reports, and dashboards all incur costs to maintain and they contribute to technical debt through decommissioning, reviewing, or redesigning.
The people analytics team generates value for the organization every time a talent decision is made using data or actionable insights. Here are the steps that decision makers take to generate value.
- Seeing the opportunity to apply data to the decision
- Clarifying what questions will need to be answered
- Knowing where to access the data & analytics
- Generating insights from the data & analytics
- Making decision on action to take
- Implementing the action
- Following up to measure the impact of the action
Delivering value from people analytics requires an understanding of the behaviors that you are trying to shape. People analytics technology can multiply the value created by the team.
People analytics tools accelerate time to value
People analytics technologies are often never seen by the end consumers of its decision support. Most users will never interact with the back-end technologies like data warehouses and predictive models. The users will work with innovative front-end solutions such as storyboards, dashboards, and reports that have been designed specifically for HR and business leaders. People analytics technologies need to accelerate the process of data being available and applied in talent decisions. Visual tools such as storyboards, dashboards, and planning tools that HR and business leaders will use in their talent decisions require the integration of many unique sources of data. The software platform and the visual design should give the PA team flexibility to create what is needed. The team needs to be responsive to the demand for new content and the ability to easily mine new insights. It may be tempting for HR IT teams and data engineers to build the data warehouse internally, but it is likely to take too long and cost too much.
Plus, there’s the risk that a DIY data warehouse ends up being less flexible than a software-as-a-service platform. A SaaS-based solution like One Model delivers data integration, data warehousing, pre-built and custom storyboards, and predictive modeling tools, all in one package. SaaS solutions tend to cost less with a faster time to value, and include continuous innovation as well. Another key technology consideration is the visualization front-end which will be used by HR and business leaders. Sound visual design of the interface and its graphical components create wider accessibility and accelerate decisions by giving users who can generate insights in a moment’s notice. We recommend a people analytics technology roadmap that addresses these areas.
- Data sources. The upstream systems from which data must be integrated.
- Data processing. The way the data from these source systems will be extracted, transformed, and loaded, including derived data and metrics calculations.
- Content. Creation of effective visualizations, storyboards, dashboards, and reports.
- Predictive modeling. Clear prioritization of the predictive models to be explored and developed.
Employ a product mindset
More and more people analytics leaders are adopting a “product mindset” with respect to their deliverables. The product mindset appreciates that users have choices when they are seeking insights and that the PA deliverables need to be easy and insightful. A product mindset incorporates concepts such as portfolio management, road mapping, user research and feedback, benchmarks and metrics, deploying minimum viable products, and managing and communicating change. Adopting a product mindset will help ensure that the people analytics team is always delivering value to the organization.
Choose your operating model
There isn’t a perfect people analytics operating model for any particular type of organization. There is no right answer, but some approaches will be better and generate more value than others. The key is to design your team intentionally with a focus on value. The team structure, roles and responsibilities, and processes must align with the needs of the internal customers. The team should be composed of an appropriate mix of technical and consulting capabilities. Some teams may need more data engineers, others may need more visual storytellers.
Make it happen
Since every organization strives for better, data-driven support, people analytics is a critical facet of an effective human resource strategy. Talent decisions are the most important decisions any organization can make, and can help make HR a strategic partner to the overall business. People analytics is decision science for the HR function and is a key pillar of HR strategy.
Making it happen means being able to communicate the value it will bring in order to get the investment and support you need.
Start by calculating that value.
Get the equation in our Measuring the Value of People Analytics Whitepaper
Ready to see how upgrading your people's analytics solution will improve the value your team is bringing to the business?