By Carolina Gallegos
People analytics — or data-driven human resources — has become essential as HR professionals strive to make optimal decisions on everything from compensation to employee engagement. And for those wondering if data-driven HR can work for them, understand that data is readily accessible to start.
Though it may sound onerous, data-driven HR is simply the practice of gaining insight from employee data, which guides smarter decision-making. Those insights can cover compensation and benefits, recruitment and retention, employee engagement, and other areas. Using data to inform decisions adds objectivity to the process, leaving intuition and bias out of the process.
Many large organizations have teams specializing in data-driven HR; one survey reports 70% of organization leadership deeming people analytics a critical priority.1 In another survey, nearly half of businesses said they use embedded analytics for their talent systems, and 35% augment their capabilities through data warehouses.2
If you’re on the fence on people analytics, consider the following three reasons to strengthen your data capabilities:
- Improved information in decision-making. HR professionals know how precarious the relationship between employer and employees can be — studies show just 33% of employees are committed to their current employer.3 To attract, reward and retain top employees, HR departments need data to uncover critical insights, such as sources of recruitment obstacles and reasons for turnover. These insights can then be transformed into strategies and market competitive HR programs.
- Hard data to back up decisions. HR professionals answer to both leadership and employees. Executives may question the necessity of proposed changes, particularly when it involves increased expenses. Employees seek out human resources when organizational changes affect their pocketbooks, benefits or working conditions. People analytics not only informs decisions but helps justify them. Hard data builds trust and leaves little room for personal agendas or biases to get in the way. As the saying goes, “Without data, you're just another person with an opinion.”
- A real return on investment. People analytics can uncover inefficiencies or issues that organizations can solve before becoming costly. For example, using data-driven HR, Molson Coors found that disengaged employees were five times more likely to be involved in safety incidents. In response, the company initiated a series of engagement initiatives that led to $1.7 million in savings in a single year.4
Employers challenged to engage and retain employees or attract and recruit qualified candidates should avoid wasting resources with temporary solutions. Embracing people analytics will give them the basis for resilient, effective long-term strategies that can attract and retain top talent.
HUB International’s HR Consulting professionals’ expertise and resources can help you obtain the data you need to make well-informed HR decisions.
1 McKinsey & Co., “How to be great at people analytics,” October 2, 2020.
2 SHRM.org, “People Analytics Software Is Changing the HR Game,” December 19, 2019.
3Achievers.com, “2020 Engagement & Retention Report: Why up to 64% of employees may leave their jobs in 2020,” January 30, 2020.
4Robert J. Vance, Employee Engagement and Commitment: A guide to understanding, measuring and increasing engagement in your organization, SHRM Foundation, accessed January 21, 2021.