Data driven concepts Everything you need to know about people analytics
In today’s world, companies are fiercely competing with each other in order to stay ahead in the game. With new age concepts such as people analytics or HR analytics, companies are looking at improving employee performance with an aim to enhance their business.
People analytics also known as HR analytics enable managers to make the right decisions regarding their employees based on data. Technopedia, an IT education website defines HR analytics as an area in the field of analytics that refers to applying analytic processes to the human resource department of an organisation in the hope of improving employee performance and therefore getting a better return on investment.
Live examples of people analytics
- Hiring process
HR analytics does not just deal with gathering data on employee efficiency. Instead, it aims to provide insight into each process by gathering data and then using it to make relevant decisions about how to improve these processes. For instance, Google through its data observed that more than four interviewers did not lead to higher quality hiring. Hence, the firm was able to reduce the number of interviews required for the selection process.
In another example, the American multinational consumer electronics retailer, Best Buy wanted to know how engagement at its stores impacted its performance. For this, the company compared the engagements of its stores with the profits of each store. With the help of HR analytics, the US-retailer noticed that when engagement changed or increased from 0 % to 0.1 %, the profit in the same store would increase by 100,000 dollars. With this result, managers were offered incentives in order to increase their engagement with customers. Post this, Best Buy began to carry out many engagement surveys every year as the process helped them to identify certain parameters that could be changed or tweaked in order to make better business decisions.
In addition to this, people analytics can also be used to retain talented employees as losing them can have a significant impact on the business. A prominent case in point is BBVA Compass, a US-based bank holding company. The firm realised that the turnover was the highest for one particular revenue-producing role. With the usage of the people analytics, the company realised that at certain branches, the turnover for that role was significantly higher i.e. 70 branches accounted for 41 % of the total turnover. Following this, the management put in place a plan to improve retention in the 70 branches and this led to an increase in the annual turnover for the revenue-producing role in those branches.
The demand for HR analytics has increased in the recent past as companies across the globe are now turning to analytics to address workforce planning, skills gap and employee retention.