People analytics is a growing field, albeit a relatively new one. And the software packages behind people analytics are the stars of this value. They permit experts – and a growing number of non-technical people – to better understand, and even predict, human resources requirements and functions.
The Basics of People Analytics Software
People analytics (PA) software lets organizations collect, analyze, and use information about employees as a way of making smarter organizational decisions. The most common use of PA software is as a “descriptive” tool that presents HR-related information, usually in a dashboard format. More advanced forms of PA software offer the following functions:
- Diagnostic – makes it easier to link cause and effect for HR initiatives. For example, figuring out what kind of long-term ROI a certain L&D program generated.
- Predictive – uses past descriptive and diagnostic results to forecast behavior. For instance, projecting the increase in engagement rates based on a program that was given to a single department
- Prescriptive – informs the user on what needs to be done to reach a certain goal. For example, outlining what courses should be provided to increase retention for the entire organization
Why Use People Analytics Software?
PA is a relatively new technology that has grabbed the interest of major organizations like AIHR and Google. As these and other pioneers build more advanced forms of data, applications, and software, PA will spread both in terms of effectiveness and popularity. Expect to see PA becoming a common software suite in the near future, as the global market is forecast to grow from $2.7 billion in 2021 to $10 billion in 2030.
According to Oracle, companies that master PA are 10 times more likely to provide effective insights to top leaders. Such insights span a wide range of HR responsibilities, thereby allowing the improved use of human resources in numerous ways. These HR areas are discussed in the book People Analytics in the Era of Big Data, and are often known as the Seven Pillars of People Analytics.
Workforce Planning
Workforce planning is a “process where organizations look at the human resources that they will need to achieve their goals.” The predictive capability of PA software is ideal for looking at HR needs and costs over time, plus economic forecasts, and using that to gauge future strategic requirements. In this way, companies can establish efficient planning processes to have exactly the people they need at the right time.
Talent Sourcing
The process of sourcing talent often happens through external recruiters. With so many headhunters in the market, there are bound to be quality differences between them. PA software enables an organization to track the long-term results of using a particular agency. This is especially important for large organizations that hire hundreds of people each year. It’s also a challenge for global companies to identify the recruiters that produce the best results across regions and over time.
Talent Acquisition
The step after optimizing talent sourcing is to do the same with the acquisition stage, i.e. the interview process. PA software lets an organization understand the strengths and weaknesses of their interview and test system. For example, PA can track candidate personas, their acceptance rate, and their long-term productivity at the organization. This allows HR to see if their talent acquisition strategy results in the kinds of employees who do best. Through this understanding, a company can change their pre-selection process and vetting procedures.
Onboarding, Culture Fit, and Engagement
Employee engagement starts from day one of their career at an organization. Because the onboarding process defines their initial experience with a company, employees who undergo a successful introduction tend to acclimatize and perform more rapidly. PA can sort out different onboarding programs and track what kind of engagement results they produce.
Nowhere is this analysis more important than when it comes to culture, which tends to have a huge influence on engagement. PA software is used to match the types of cultural messages received by employees, and even the cultural setting of a company, with engagement rates. For instance, if a Millennial employee leads a team of Generation X workers, what are the results, in light of cultural differences?
Performance Management and Employee Lifetime Value
Once the employee passes the onboarding stage, they begin to participate in regular operations and (hopefully) a long career. Their achievements are recorded as part of a performance management system. But PA takes this a step further by linking current behavior with employee lifetime value. For example, PA can discover if workers who undergo extensive cross-functional training end up as senior managers. The company can then put a certain number of employees through the same experience as a means of pre-determining promotions and succession planning.
Employee Retention
By looking at existing retention data, PA can identify who, why, and even when certain employees are at risk of churn. A collection of information that includes things like personal background, salary and promotional history, role, and the identities of their direct managers can be combined to understand if an employee is likely to leave. The company can then take measures to ensure their retention.
Employee Wellness, Health, and Safety
Many companies run programs to improve the health and safety of workers. But how effective are they? How do they affect productivity, engagement, and retention? Through PA, organizations can identify the programs with the best results. This is good for budgetary reasons, but most importantly, it ensures that workers are actually getting the help that they need.
After You Finish Your People Analytics Homework…
Analytics is one side of the equation – L&D is the other. PA can tell you why and how employees are performing to standard, but it takes a platform like GrowthSpace to put analytics into action.
With GrowthSpace, HR can take the insights provided by PA software concerning talent, training, and performance, and turn them into customized talent development programs. PA seeks to diagnose how HR initiatives are performing, which is perfect for GrowthSpace, as every one of its programs starts and ends with a focus on goals. Finally, GrowthSpace makes an ideal combination with PA software, as the platform unifies the entire L&D process across the organization.
