People analytics lay the groundwork for data-informed HR decisions

This article was created in partnership with The Chang School.

From predicting manager and employee performance to improving employee well-being to increasing efficiency and productivity, people analytics is a powerful tool for making data-informed HR decisions — and savvy companies are beginning to realize it.

Implementing people analytics, also known as HR or workforce analytics, requires a commitment to data collection, analysis, and continuous improvement, but through its use HR professionals can enhance various aspects of human resource management and significantly impact an organization’s success. Making informed decisions predicated on data enhances employee performance and engagement, while also driving up overall business outcomes.

Nobody knows the truth of this better than HR Consultant and People Analytics Expert Konstantin Tskhay, Ph.D. Managing partner and founder of Tskhay and Associates, Tskhay also advised the curriculum of the new Postgraduate Certificate in People Analytics, starting this fall at The G. Raymond Chang School of Continuing Education at Toronto Metropolitan University, and he sat down to discuss the specific ways data analytics are a gamechanger for organizations that are ready to embrace them.

Recruitment and retention

Many companies are using predictive analytics for hiring, where their capabilities allow HR teams to develop better job descriptions, refine their candidate screening processes, and ultimately make more informed hiring decisions. People analytics analyze historical data to identify the traits and qualifications that predict success in specific roles and can also optimize recruitment strategies by identifying the best sources of talent, such as particular job boards or referral programs.

Improving the candidate experience is also of interest to organizations, and by analyzing their feedback and engagement metrics from the recruitment process, HR professionals can leverage the data to streamline the application process. By doing so, it becomes more user-friendly and efficient, and therefore more likely to attract the sought-after, higher-quality talent.

Tskhay says that only a few organizations use LinkedIn data to their full advantage in the recruitment process to evaluate candidates in the beginning, “but they don’t use it down the line, let’s say six months or 12 months later to figure out how their recruitment process is working.” 

“The real value is being able to identify the right candidates for the job,” he says. “That means those who are going to be successful 12 months from now and who show potential to grow within the organization, get promoted, and deliver value.”

The other side of the coin is engagement, and people analytics plays a role here too. Regularly conducting and analyzing employee engagement surveys helps HR to understand the levels of job satisfaction, motivation, and commitment within the organization. The data can also be used to inform initiatives aimed at improving workplace culture, such as recognition programs, wellness initiatives, and opportunities for professional growth.

Organizations that do engagement surveys take about three months to analyze the data and another six months to start actioning it, which is far too long to be impactful, Tskhay cautions. 

“It needs to be acted on within a short timeframe for any changes to be relevant,” he adds.

Analyzing data on employee turnover and exit interviews can reveal patterns and predictors of employee departure, which HR can leverage to identify at-risk employees and proactively address their concerns. That may look like improved compensation packages, enhanced work-life balance policies, or more career development opportunities.

Impact on learning and development

When it comes to learning and development, people analytics identifies skills gaps within an organization by analyzing performance data and employee feedback. HR is then able to design targeted programs that address the specific needs highlighted by the data, and ensures employees have the necessary skills to succeed in their roles. 

People analytics is also able to measure the effectiveness of training programs by tracking the outcomes of training initiatives. By identifying improvements in performance or increases in productivity, HR can assess the effectiveness of their programs and lean on a data-driven approach of continuous improvement for its training methods and content.

“Traditional methods of data collection for HR professionals include learning management systems, which gives them a picture of their employment within the organization from when they started to things like promotions,” says Tskhay. “Some organizations also collect information like where they are located and how far they are from the office if there’s remote work involved.”

Impact on performance and productivity 

Getting a comprehensive picture of employee performance is also well within the capabilities of people analytics. By tracking various performance metrics — such as sales figures, project completion rates, and customer feedback scores — HR can identify high performers as well as those who require additional support. This data enables the creation of tailored development plans and targeted training programs to boost overall productivity by meeting each employee where they are. 

People analytics can also monitor and analyze employee productivity data, including how employees spend their time, if there are any bottlenecks in workflows, and the impact of different work environments. These insights clearly point organizations to proper interventions, whether that be redesigning workspaces or implementing new technologies, which ultimately leads to greater productivity at an organizational level and greater well-being for the individual employee. There are some limitations, however, Tskhay notes.

“One of the big challenges with performance and productivity data is the amount of data that an individual produces,” he says, pointing to the sheer volume of Slack messages or Google Meet meetings that an employee might produce. “You send thousands of messages to various people in the organization and they do the same, so it can be very difficult to process.”

From D&I to compensation and benefits 

Analyzing workforce demographics and diversity metrics helps HR to understand the current state of diversity and inclusion within the organization. Once again, this data is instrumental in promoting a more inclusive workplace through support of initiatives like diversity training, mentorship programs, and inclusive hiring practices.

“Organizations can ask individuals to voluntarily self-identify as different races, sexual orientations, genders, and so forth,” says Tskhay. “Some organizations use the data quite consistently to inform strategies.”

Sentiment analysis of employee feedback, gathered from surveys or internal communications, can provide insights into how included and valued employees feel — a key metric when the Gold Standard is fostering a culture where all employees feel respected and supported.

Compensation and benefits is another top-of-mind component for employees, and using people analytics allows HR to benchmark what they offer against industry standards. This is a great way to ensure the organization remains competitive in attracting and retaining top talent by offering great compensation. People analytics also give HR insight into which benefits employees value the most versus which are underutilized, information that helps design benefits packages that better meet the needs of the workforce, and thereby increase employee satisfaction.

Ultimately Tskhay promotes HR’s adoption of a data-driven approach not only to improve efficiency and effectiveness, but also to ensure that every decision is aligned with the overall strategic goals of the organization. As the field of people analytics continues to evolve, it will undoubtedly play an increasingly critical role in shaping the future of human resource management — and HR professionals must evolve along with it.

Read more: How can you improve your company’s compensation and benefits program?

Learn more about The Chang School’s Postgraduate Certificate in People Analytics today.