People Analytics- Using People Analytics to Drive Business Performance

People Analytics- Using People Analytics to Drive Business Performance

The ever-changing business environment calls for an urgent need for improved people decisions. Besides, there is a growing volume of workforce data, which can be used to improve organizational productivity. The possession of workforce data is not enough to improve organizational performance. Organizations need to interrogate the data, decide the right interventions, and know what to expect in the future, depending on the available evidence. Organizations collect Company and human resource data through people analytics and transform it into valuable insights to boost organizational success. People analytics is not limited to the HR function, but it also helps drive overall business success and goals (Dearborn & Swanson, 2018). HR analytics empowers companies to create a better workforce experience and accommodate organizational structure, which maximizes overall organizational productivity.

Benefits of Workforce Analytics

People analytics and business intelligence, both part of an organization’s big data, go hand in hand. Companies leverage people analytics to improve customer experience, create effective systems, and capitalize on opportunities to enhance their bottom line. Traditional organizations overlooked workforce analytics, but leaders are gradually realizing its importance (Forbes Human Resources Council, 2020). Among other benefits, organizations are utilizing workforce analytics to help HR teams find and onboard talent.

HR analytics helps organizational HR teams make good hiring decisions by utilizing historical data. Were it not for employee analytics, recruiters would only depend on their intuition and gut when making hiring choices (Karmańska, 2020). However, with HR analytics, recruiting decisions are data-driven. One of the data-driven tools employers use to make recruiting decisions is historical data. If, for instance, a company hires 20 new employees, and half of them coming from the same university fail to attain organizational objectives, a company may not hire from the same institution again. Hiring teams utilize people analytics tools to avoid such mistakes. Besides, in this age of social media, employees can use the tool to learn more about their’ personality traits from social media networks, applications, and job portals, among other technological means.

Moreover, organizations using people analytics rarely face talent scarcity. It is hard to find the right talent for the organization if recruiters conduct random employee searches. However, with people analytics, hiring teams know who to target for job offers whenever opportunities arise in the organization (Forbes Human Resources Council, 2020). Using people analytics makes it easier to understand the right people, knowledge, and other employee aspects needed, which is impossible with regular recruitment exercises.

People analytics also ensures proper training, an essential exercise for growth-oriented companies. Gaps in the training exercise may incur unnecessary costs for the organization, creating avoidable organizational problems (Forbes Human Resources Council, 2020). Besides, training programs are costly and exhaust a massive part of an organizational budget if not carried out correctly. As a result, organizations should collect their people’s data and learn from evidenced trends. With such information at hand, organizational leaders can better decide which training programs to use and how to implement them. Also, people analytics helps HR teams ensure that employees benefit from training programs optimally and whether they are relevant to their jobs.

Also, people analytics helps organizations reduce the attrition rate. By using people analytics, HR teams can determine the causes of attrition and related historical patterns. It enables the organization to identify why employees leave or stay in the organization. The common causes of employee attrition include under-compensation, overworking, HR-related management issues, and unsafe working environment, among others (Karmańska, 2020). People analytics will help the organization identify why employees leave, and the earlier this happens, the better. People analytics helps organizational leaders know the exact reasons behind high attrition rates, thus enabling them to rectify the issue and connect with employees better.

Corporate innovation and speed, two crucial factors in organizational development, are enhanced by people analytics. Some industries are characterized by constant volatility, and only those that adapt and respond quickly will survive (Karmańska, 2020). HR teams must hire employees with the two skill sets to ensure that an organization is ready for unforeseeable circumstances. Innovation is a crucial success factor even among the world’s largest corporations, such as Apple, Facebook, and Google. These companies have managed to innovate because they conduct people analytics before recruiting their people.

Impact of People Analytics on McKinsey and Company Goals

McKinsey and Company were looking forward to improving customers’ experience, but it had exhausted most strategic options. Leaders at the Company believe that the lowly rated customer experience resulted from high employee turnover. Therefore, the only way to enhance customer experience was by improving employee retention by using insights driven by people analytics (Arellano, DiLeonardo, & Felix, 2017).

People analytics helped the Company define organizational goals. The company’s top goal is to improve revenue per store (Arellano, DiLeonardo, & Felix, 2017). Other short-term objectives included customer satisfaction and improving the speed of service. By using people analytics, the Company managed to measure the two short-term goals (improved customer satisfaction and rate of service per shift, thus determining the right mix of employees to deliver the best results for the Company.

Moreover, McKinsey and Company discovered a missing link regarding talent recruitment through people analytics. Previously, hiring teams ignored the impact of personality traits on the organization’s overall productivity. Data gathered through the people analytics process enabled them to relate employees’ personality traits and productivity.

By using people analytics, McKinsey and Company were also able to correlate employee behaviour and customer experience. The tool helped the Company realize weak links in employee-customer interaction, thereby rectifying the weaknesses to improve customer experience.

Unconventional People Analytics Outcomes at McKinsey and Company

One surprising outcome from the people analytics exercise at McKinsey and Company is that personality traits impact delivery. Given the constant interaction between customers and employees due to the retail nature of the business, employees had to be assigned tasks suiting their personality traits (Arellano, DiLeonardo, & Felix, 2017). A friendly and emotionally intelligent workforce is most productive in front-office tasks.

Moreover, it was surprising that career development impacts productivity more compared to compensation. The Company previously thought that enhancing employees’ salaries would push them to perform, but it turns out that being mindful of their career advancement is crucial (Arellano, DiLeonardo, & Felix, 2017). Opportunities for career development coupled with a favourable organizational culture boost individual performance.

Conclusion

From the outset, people analytics seems like a formality of keeping organizational data. However, it turns out that a process is a crucial tool for enhancing the HR function and overall organizational productivity. As a result, organizations are increasingly integrating people analytics into their strategic plans. Further, the latest COVID-19 Pandemic has highlighted the need to plan, and people analytics helps companies identify their goals and priorities. Apart from assisting companies in attaining short-term organizational goals, people analytics goes a long way in assisting them in preparing contingency plans to encounter sudden challenges.

References

Arellano, C., DiLeonardo, A., & Felix, I. (2017). Using people analytics to drive business performance: A case study. McKinsey Quarterly, 6.

Dearborn, J., & Swanson, D. (2018). The data driven leader a powerful approach to delivering measurable businss impact through people analytics. Hoboken, New Jersey Wiley.

Forbes Human Resources Council. (2020, April 3). Council Post: 11 Benefits Of Workforce Analytics For HR Teams. Forbes. https://www.forbes.com/sites/forbeshumanresourcescouncil/2020/04/03/11-benefits-of-workforce-analytics-for-hr-teams/?sh=57815fa8b796

Karmańska, A. (2020). The benefits of HR analytics. Prace Naukowe Uniwersytetu Ekonomicznego We Wrocławiu, 64(8), 30–39. https://doi.org/10.15611/

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Good measurement is more than just being knowledgeable in existing HR metrics. It requires an understanding of and expertise in relationships as well—in other words, being able to determine the link between things such as talent, training and turnover. HR metrics should be tools that allow HR professionals and their strategic partners to comfortably and confidently make decisions based on the information/data provided.

To complete this Assignment, review Using People Analytics to Drive Business Performance: A Case Study. Then respond to the following bullets in a 4- to 6-page paper:

Explain the benefits of people analytics/metrics to an organization.
In this case, how did people metrics impact the organizational goals?
What surprises you about the results of the company’s study? Why?
Summarize your perception of people analytics before and after this assignment.