HR Technology

Establishing the Value of People Analytics Outside of HR

Most organizations have come to appreciate the contributions that people analytics (PA) makes to corporate performance—at least in the HR realm. What is not so apparent is how PA can drive results in many areas of the enterprise. This article points out strategies and avenues for extending PA relevance throughout the larger organization.

Enterprises rarely look to HR for answers to critical line-of-business concerns. Therein lies the problem—and the very real opportunity—for PA.

Sales growth, global market expansion, technical hurdles, regulatory issues, and supply chain bottlenecks are typical of the challenges that consume most managers’ days. Conventional obstacles are most often addressed with conventional solutions; and yet, as mature, high-functioning HR organizations know, nearly every business problem has a talent component—a possibility that functional managers don’t always consider.

With the data and analytical systems available today, HR can have a bigger positive impact on critical business issues than ever before. Putting that power to work—and proving the value of people analytics to the larger organization—involves two tasks: convincing line-of-business managers of the relevance of people data and insights derived from it; and then applying the discipline to the specific challenge at hand.

The first of these two tasks is often as formidable as the second. People analytics, while not completely new, is still largely unfamiliar to the larger business as an effective management tool. Getting a seat at the table through awareness-building is important, as is demonstrating that analytics can have a quick and measurable impact.

To facilitate strong connections with the larger business, PA teams often begin by designating individual members who will investigate the analytics needs of the business, communicate those needs back to the team, and provide intelligence where appropriate from the team to the business. If analysts understand actual business needs, they are much more effective in proposing data-driven solutions.

To elaborate further, one strategy for establishing relevance is to assemble a workforce analytics team comprised of internal consultants supported by data collection/extraction, analytics, visualization, and reporting specialists. The consultants are assigned to various business units, working closely with managers in those units to identify challenges in which PA can play a meaningful role. Another approach is to staff the PA team with individuals who have a diverse set of experience; e.g., industrial/organizational psychology, business intelligence, finance, marketing, and so on. This enables the team to better see, and respond to, the needs of the wider business and helps inform, and justify, the contributions of the PA team beyond pure HR functions.

Line-of-business managers rarely look to HR for solutions to complex business problems, so it’s imperative that PA teams shift their focus to include collecting and analyzing data using tools like SPSS (Statistical Package for the Social Sciences) software or even spreadsheets Excel; this enables them to apply their skills in terms that will relate to business unit leaders and corporate executives. Solving a sales decline, for example, may require detailed assessment of hiring practices and skill sets in which the company is deficient, or ways to stem turnover in frontline sales personnel.

Equally important is the need to encourage and establish a culture of data-driven decision making. Mature, highly efficient organizations understand that people data not only informs better decisions, but also provides a means for experimentation (e.g. A/B testing, pre- and post-assessments, test programs, etc.) to continuously refine people programs and policies. Of course, this emphasis needs to be balanced with a healthy regard for the people element in people analytics. Evidence-based management should be implemented when managers are armed with excellent data, not suppressed by it.

When applying PA to organizational challenges, it’s important to establish as many listening channels as possible. Data from enterprise resource planning (ERP) systems, qualitative and behavioral data, social media monitoring, and even AI allow people analytics teams to view employee questions from multiple angles. It also helps to make strategic investments in technology to support the PA function; tools for data analysis and visualization, improvements in data warehousing systems, and nimble, cloud-based applications help PA teams execute on tricky, multi-dimensional questions.

Putting PA to work in the pursuit of financial, operational, or technical challenges can be one of the best investments HR can make. For example, supply chain issues might be resolved through cross-divisional and/or cross-functional collaboration—solutions that can only be identified by assessments of personnel and skill sets made by people analytics teams. Customer satisfaction scores—a key indicator for customer retention—might be improved not only by analyzing what kinds of incentives are most valued by call center team members, but also by ways to develop meaningful career paths for customer service representatives.

Establishing people analytics in the context of the broader enterprise by no means de-emphasizes its increasingly critical role within HR. In fact, there is plenty to do in upskilling members of the HR organization in data literacy, and in creating an analytics mindset that moves HR from its traditional, model-based footing to one that is data-driven and evidentiary. But as PA continues to develop as a powerful discipline in the enterprise, it’s becoming increasingly clear that the benefits extend to challenges and possibilities far beyond the doors of the HR department. Wise PA and HR managers are opening those doors, and creating real value for the organization.

Madhura Chakrabarti Ph.D., is People Analytics Research Leader for Bersin, Deloitte Consulting LLP.