Strategic HR

People Analytics: The New HR Tool That’s Better Than a Crystal Ball

For years, managers from marketing to IT used big data to make smarter business decisions. Now, HR’s embracing it too—and taking big data a step further. We’re doing this by applying analytics to HR data. The result: people analytics.

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People analytics enables you to take big data a step further by giving you the power to see past what’s happening, to why it’s happening—and how to fix it.  It’s like having a crystal ball, but better. (That’s why the latest data geeks can be found in HR.)

Analytics gives HR the power to speak the language of business. In turn, HR gains management support for innovative workforce decisions that move the business forward.

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Proving It’s Time for Change

Salesforce is one of the fastest-growing companies in the Fortune 500. For years, Salesforce held fast to hiring only within the San Francisco area, where it’s headquartered. But as competition for top developers increased in the Bay Area, so did Salesforce’s decline rates from candidates.

Management responded with the same old solutions. First, they ordered HR to offer candidates higher salaries. But that wasn’t a financially sound strategy. Then management suggested that HR hire more or better recruiters. But Salesforce already had a team of top recruiters.

The talent acquisition team turned to data. Their analysis found Salesforce already touched most of the potential candidates in the San Francisco area. So the team identified several markets throughout North America with a nearly untapped resource of talented developers.

Not only were these rich resources, but Salesforce could also hire the talent at competitive rates. This analysis provided the company a financially sound reason to open offices in those areas.

People analytics not only resolved Salesforce’s business problem, it also helped the company move forward by disproving old beliefs and inefficient solutions.

A 2016 survey by Deloitte reports only 32% of companies felt somewhat ready for people analytics. And only 8% believe they’re fully capable of developing predictive models. This means companies that have advanced people analytics capabilities now can gain a serious competitive advantage.

9 Ways Big Data Helps HR Improve Outcomes

  1. Customize “best practices”. People analytics help you understand that elusive “why?” behind the numbers, so you can pinpoint actions that deliver the best return for specific roles and specific times.
  2. Efficiently address critical HR issues. By analyzing HR and business data together, you can better predict risk, improve engagement and collaboration, analyze an employee’s flight risk, identify candidates for promotion, and more.
  3. Optimize time to hire. Analytics can tell you the optimal number of interviews it takes to increase your chance of making accurate hires, per position, while keeping desirable candidates engaged throughout the process.
  4. Spend resources efficiently. Analytics provides a comprehensive picture of a situation, so you can identify potential bottlenecks and the root cause of an issue. This helps you optimize results while saving time and other resources.
  5. Identify diverse talent. Analytics helps you uncover hidden biases in your organization’s review and compensation structures. It can also shine light on opportunities to create a more cohesive company culture.
  6. Improve retention. People analytics cannot only identify causes of high turnover, but also predict how likely an employee is to become a flight risk. This may be especially valuable for reducing “regrettable losses.”
  7. Promote fairly. People analytics can help HR identify top talent for promotion who
    might otherwise be overlooked. In turn, this will help retain valuable employees.
  8. Predict worker performance. What if you knew which nontraditional skills are associated with success in your organization? And for each role? When you combine soft data with hard (quantitative) data, you can predict a candidate’s likelihood of success.
  9. Better define roles and functions. Analytics also helps you answer questions about the work itself, such as which projects should be done in-house, or given to independent contractors.

HR as the New Business Strategists

Successful companies have leaders who realize that employees drive the business. Whether they help us thrive or struggle depends on the quality of the partnerships we create with them.

Big data and people analytics can help us create employee relationships that keep workers rooted in the heart of the company, while solving business challenges with more efficiency and accuracy.

If you don’t have an HR data analytics strategy in place yet, or you want to advance it to the next level, get started now. The insights gained will help other business functions make more strategic decisions.

You can grab tips on building a data team to optimizing strategies in Upwork’s new ebook, Data: The New Language of HR.

Zoë Harte is the Vice President of Human Resources at Upwork. She implements innovative management approaches and focuses on building a mission-driven culture for Upwork’s team of employees and as well as building strong partnerships with Upwork’s global network of freelancers. Prior to joining Upwork, Zoë was Director of Global Initiatives and Senior HR Business Partner at Yahoo!, Director of HRBPs and Director of Recruitment at Rovi, and led International Customer Care for Yahoo!