The Two Most Important Questions in People Analytics

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Sarah Johnson
08/12/2020

Perceptyx People Analytics

People Analytics offers great promise to the human resources function. Those of us in HR have long aspired to be strategic partners to leaders in the organization. Becoming that strategic partner requires that HR professionals speak to leaders in their preferred language, numbers, and come to the table with facts and data. 

Analytics enable us to talk about proposed programs and practices not as “nice to do’s” but as recommendations driven by research. When our proposals are backed by analytics we don’t have to guess or surmise or speculate. We can know for sure the right actions to take and the impact these actions will have on the organization. People analytics enable us to influence the direction of the business and its success. 

Many critical topics can be studied via people analytics processes, and there are countless interesting analyses that can be done.  But what makes people analytics successful?  Analytics are successful when they result in actions, in change, in measurable, meaningful benefits to the organization. 

At its core, people analytics allows HR and leaders and managers to make decisions about people that are evidence - or data-based. Data-based decisions reduce bias and subjectivity. No more decisions based on outdated or faulty assumptions of “what I think”, “what I believe” or “this is what we did in another company I worked for”. 

Ultimately, we can use analytics to help the organization gain an edge by recruiting the best people and rewarding them in the most impactful way, or identifying the cultural elements that must be put into place to create innovation.  We can evaluate the return on investment of HR programs and practices in dollars, productivity gains or retention of customers and key talent. We can anticipate future trends and shifts in the work experience. The point is that people analytics is at its best when it results in real, measurable change in the organization. 

It seems logical that the two most important questions in people analytics might focus on things like which analyses to use, how large the sample size needs to be, or even the best way to collect and store people data. In actuality, the most important questions have nothing to do with tests of statistical significance, data visualization tools or statistical software.  These questions are far more fundamental. They get to the core of what People analytics is all about. 

Question 1:  So What?

I’ve seen a lot of research in the people analytics space that is interesting and well done, but it doesn’t answer the “So what?” question.  Why should leaders or managers or anyone in the organization care about these results? Analytics that can successfully answer the “So what?” question are relevant to what’s important in the organization today.  They tell us something we didn’t know, they plug a hole in our knowledge by providing an important puzzle piece that enables us to see the bigger picture or solve a critical problem. 

Something passes the “So what?” test when we immediately recognize the value of the information and how it applies to the current state and information needs of the organization. 

Not long ago I spoke with some HR professionals who told me that their company had recently built out a people analytics function.  Periodically the people analytics team publishes reports that summarize the findings from their analyses. The HR professionals told me that the work is well done but completely disconnected from the real problems in the organization. 

Good work, but irrelevant to the current issues and concerns. Why should HR care about this work? They don’t. Consequently, the results of the people analytics team don’t make a difference in the organization. It has become an investment that hasn’t paid off in any meaningful way. Good people analytics is connected to what is important to the business today.

Question #2:  Now What?

Let’s say that the analysis is very relevant to the organization’s issues.  It provides that puzzle piece that completes our understanding. The next question is how do we translate these findings into actions, changes or improvements? Does the work provide us with a road map of what should happen next? In order to pass the “Now what?” test, analytics have to go beyond theory and be firmly planted in the practical world. 

Results must provide us with guidance about key populations or interventions that can make a real, measurable, difference. The best work will pinpoint critical populations and suggest the necessary next steps. We need people analytics to drive action in the organization and to inspire those data-based decisions about people, but that can only happen when the findings spur or encourage specific actions.

Part of a successful answer to “Now what?” is to provide insights into potential actions, but honestly part of it is making sure that the right people have access to the findings.  If the analytics suggest changes to hiring or recruiting practices, for example, we need to make sure our work gets to people in talent acquisition. 

Delivering people analytics with the greatest possible impact on the organization means that we need to be:

  • Aligned. Is the work connected to what is most important to the organization going forward?  Does it shed light on issues that are of critical strategic importance?
  • Adaptable. Face it, there is analytics work going on all across the organization, from HR to customer service to quality to production to ethical conduct and much, much more.  If each of these analytics processes are operating in their own bubble we are missing the opportunity to join forces to not only understand organization problems more broadly, but also to link our work with other work to provide a more complete understanding of an issue, or to connect the work we are doing in HR to critical business processes and metrics.
  • Actionable: The work has to inspire our audience to do something, not only because the topic is important, but also because the findings nudge the audience to obvious action steps. Sharing the information with the right audience, the group that is charged with addressing the issue and is in the best position to act, will insure that actions are taken.

People analytics functions that have clear insight to the needs of the organization, can transform the theoretical to the practical and have access to the key decision makers will no doubt have a significant and positive influence on the organization.

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