People Analytics: What They Are and Why They Matter
If you’ve never heard the term ‘People Analytics,’ you’re not alone. After all, people are people; not a number. It’s not always easy to track people’s behaviors, interests, and preferences like data, but that’s precisely what we must do in the world of human resources.
But people analytics are becoming increasingly common and more readily paid attention to in today’s world. Coursera defines this term as, “a data-driven approach to managing people at work.” What does this really mean and why does it matter? Let’s dig in.
Looking Closely at the World of People Analytics
Businesses have been slow to adopt any kind of HR-analytics program, yet professionals across the board agree that understanding what’s happening with a company’s people is critically important.
Still, only 5% of investments made in Big Data are in human resources, found a study by Tata Consultancy Services.
Let’s be clear. There isn’t a shortage of data available. Just about everything can be tracked today from recruitment to how we perform after years on the job and the number of hours we work, call in sick, or need to add flexibility into our schedules. Promotions, job descriptions, and compensation packages are also trackable. Even the way team members work together on projects and employees interact with customers is able to be tracked.
So what’s stopping businesses from utilizing more people analytics to make the workplace stronger?
Why People Analytics Aren’t More Readily Used
You might already have scorecards in place in your business. Perhaps you’re already using performance reviews or software to track your people. The question then becomes, why are you using these? If it’s simply to keep a record of performance, you might not be getting as much out of them as you could.
People analytics can give you so much more than a simple record to keep on file. With them, you can learn:
- How efficient each department is in your business;
- How well your people are delivering your service;
- The impact your people are having on your business (and where there’s opportunity to grow);
- The quality of big decisions made in your organization.
Recently, John Boudreau, a professor and research director at USC’s Marshall School of Business and Center for Effective Organizations, as well as his colleague Wayne Cascio, took a deep dive to answer why people analytics matter on a deeper level. They dug into the reasons that organizations could and should use data to get better outcomes. Their conclusion: You must push people analytics throughout your entire firm in order for them to be effective.
How to Appropriately Push People Analytics in Your Small Business
For small businesses, this might seem like an added task to an already full to do list. But it’s worthwhile, at least according to 1,700 surveyed CEOs. 71% of these executives agree that human capital is one of the best ways to compete in today’s world, according to an IBM survey.
Rethinking the approach that people are a competitive advantage gives different weight to the matter, do you agree? With that in mind, there are a few things you can do to push this Big Data through your organization to become more competitive.
Define the Outcomes of Analyzing What’s Happening With Your People
Why do people analytics matter? Yes, they can help you compete, but how? That’s an important question to answer. Knowing this can give purpose to setting up a tracking system and digging into the statistics. If you understand the exact outcome of your analytics, you’ll understand why it’s worth the effort.
For example, if you look closer at the analytics behind your scheduling practices, you might be able to make your team more productive, which in turn could lead to more sales for your business and higher customer service levels.
Use the Right Tools
You aren’t expected to drum up these analytics on your own. That’d take too much time. Instead, by using the right tools, you can get a better handle on your company analytics, quickly measure and analyze your processes, and find new ways to implement strategic changes based on your findings.
There are many tools available to you today. Instead of listing all of the resources available, I feel it’s more important to look at how the tools should be used, so you’re more likely to get better results with the new tools you choose to implement. Understanding this will help you find the best solutions for your small business. So, with this in mind, here are a few important considerations to make:
- Find a tool that delivers the analytics to you in a timely manner;
- Find a tool that you’ll commit to using and then schedule it on your calendar to regularly check in with the analytics;
- Embrace analytics as your competitive advantage and keep this in mind as you’re reviewing the findings;
With these in mind, you can make better decisions for your business, which in turn will enable you to use people analytics to yield tangible results.
Create a Communication Plan
You’re on board now, but what about your team? With your new analyses in place, you must communicate your new strategy and your streamlined techniques with your team. Deliver these new approaches at the right time to have the maximum impact.
Using the same scheduling example, if you notice that a certain group of people has the highest customer service levels when scheduled at a certain time, let your team know during a regular meeting that you’ll be keeping them on the job more during those hours. And like point one suggests, it’s important to emphasize (or push) the why on your team so they understand the importance of the new change.
Although this concept might feel daunting up front, it’s an important one for businesses of all sizes to consider. Without understanding how to effectively recruit, hire, and manage your entire team, you could be losing a powerful competitive advantage in your industry.
Jon Forknell is the Vice President and General Manager of Atlas Business Solutions, Inc., a software marketing company specializing in employee scheduling software, including ScheduleBase employee scheduling software, and other business software solutions. In the past, Jon has been recognized by the U.S. Small Business Administration as a SBA Young Entrepreneur of the Year. Atlas Business Solutions was named as one of Software Magazine's Top 500 Software Companies 2004-2007 and again in 2010, 2013, 2014, 2016 and 2017.Read Full Bio