HR on the verge of a people analytics revolution

The proportion of HR departments making people analytics a key priority is set to double over the next three years. Just one in ten say that it will not be among their principal concerns by 2020, according to research for XpertHR.

But the survey of more than 800 HR managers also found that most organisations are failing to get full value out of their analytics spend, with just one in three organisations using data to help predict future events.

More than half those taking part in the research were already heavily involved with HR data, either being responsible for collating and reporting data (59%), analysis (57%) or making decisions based on data and people analytics (55%).

Looking solely at respondents in senior roles, fewer were responsible for data collection (39%) and analysis (36%), but more than seven out of ten (71%) used data and analytics to inform their decisions.

The survey found that nearly half (46%) of HR departments already saw people analytics as a priority, with a further one in three (32%) expecting it to become so in the next 12 months and a further one in ten (9%) in the next three years.

Although private sector respondents lag behind in having people analytics as a current priority (40%, compared with 56% in the public sector and 54% in the voluntary sector), this is set to change rapidly, with significantly more private sector employers turning to analytics in the next 12 months.

And there is a clear link between organisation size and the use of analytics, with 54% of those with 1,000-4,999 employees and 56% of those with 5,000 or more employees already focusing on people analytics.

Chart-1-how-do-you-use-analyticsHowever, the research suggests that current approaches to analytics are relatively undeveloped, with managers saying most commonly saying that analytics are used to report on past performance (71%) and least frequently that they are used to predict what might happen in future (36%)(see chart 1).

Once again, larger organisations have a more developed approach to people analytics, with almost half (45%) of those with 5,000 or more employees using analytics to make predictions.

Asked about the problems they wanted to use analytics to help solve, respondents most commonly chose employee retention (74%), followed by absence (68%) and recruitment (67%). This emphasis on recruitment and retention was strongest in the private sector.

However, they cited a range of challenges in implementing people analytics, including the difficulty of obtaining accurate, reliable and up-to-date data, limitations of current HR systems and the lack of in-house knowledge and skills to choose and use metrics.

Charlotte Vlaarkamp, product manager for data services at XpertHR, says: “It is a real shame to see our customer struggle gaining value from analytics at the moment. There are some real hurdles to overcome, mainly in getting all the systems speaking to each other, but also in terms of analytical skill gaps.”

Chart-2-benefits-of-analyticsIf such problems could be overcome, respondents believed that people analytics could help them make better-informed evidence-based decisions (86%), enable HR to engage with the business with increased credibility (77%) and address people challenges proactively (75%)(see chart 2).

Vlaarkamp adds: “We are working very hard to develop solutions that make it easier for our customers in HR to get that seat at the table.”

* Working on behalf of XpertHR, RBI Customer Insight collected responses to an online survey from 823 private sector managers in the UK and US. The research took place in July 2017.

In November 2017 XpertHR is launching Retention Analytics, a powerful new people analytics product, focused on employee retention. Powered by deep analytical expertise and Big Data technology, our interactive, cloud-based tool will help you reduce unwanted turnover, optimise people management and drive business success. With years of experience in analysing HR data and empowering HR professionals, we provide the expertise so there is no need for a data scientist or any analytical experience to start your people analytics journey.

Contact us to learn more about how XpertHR can help you take the next step on your journey to evidence-based decision-making.