People analytics is the key to organisations making “better business decisions”. This is according to IBM Global Director of People Analytics Solutions David Green, speaking on Matt Alder’s Recruiting Futures podcast.
He offers a useful working definition of people analytics:
“The use of data and analytics tools to identify insights on people that enable faster, more accurate and more confident business decision-making. It’s all about making better business decisions.”
At its most effective, people analytics can be described as “analysis on steroids”, he says. By embarking on a “people analytics journey” and progressing through stages of increasingly sophisticated data use, organisations can reap major benefits. For example, organisations can use people analytics to cut labour turnover or to increase recruitment efficiency.
Labour turnover is an ideal starting point for organisations looking to embark on a “people analytics journey”, says Green. Collecting, analysing and reporting on labour turnover data can help HR understand the levels of attrition at their organisation. “Analytics can tell you why labour turnover is happening,” he says. “You can start to understand why by looking into the data,” he continues. “Why your high performers in sales in your London office, for example, are leaving. You can start to look at things like exit interview data.”
Once people analytics processes are up and running, “the next step is predictive analytics”, says Green By using people analytics data to identify drivers of labour turnover, HR can understand which employees might be at risk of leaving. “The employee may not even realise that they’re at risk of leaving,” says Green.
HR can then take preventive actions to counter the risk of the employee leaving, such as offering promotions or lateral career moves, where appropriate. Taking early preventive action based on people analytics insights can bring significant cost savings to the organisation, for example in avoiding the cost of hiring replacements, and in making most effective use of the organisation’s own talent pool.
Using people data to make better business decisions: XpertHR resources