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How to Overcome Challenges of Leveraging People Analytics

Dan Staley, Principal, PwC And Rishi Agarwal, Partner-People Analytics Leader, PwC

Dan Staley, Principal, PwC

Companies already harness big data to drive many business decisions. Before launching a new service, decision makers are likely to review past purchasing behavior. Insights derived from the company’s talent data can be just as useful. Why not also analyze information such as the sales team’s skills and engagement levels? In today’s data driven business world, it’s time for organizations to better understand and incorporate data about their biggest investment—their people.

Data and analytics about your workforce can reveal a wealth of information. The level of engagement for top-performing employees, attraction and retention of key talent, forecasts of future labor costs and productivity, ROI and value of training programs, and what development activities are most impactful are just a few insights companies with astute people analytics are able to uncover.

"Asking the right questions is the first step down a pathway of more meaningful data and insights"

This information needs to be distributed and used regularly beyond the HR department. People analytics can unlock data possibilities to improve decision making and planning in every function—from operations to finance— yet that information is rarely acted upon or even shared outside of HR in a timely and accurate manner.

Despite the value people data and analytics can bring to an organization, the three common challenges that follow are the most likely reasons companies fail to fully leverage them:

1. Questions asked about Talent are too Simplistic

When business leaders today think about people data, too many are stuck only thinking about headcount. While it’s an important piece of the overall puzzle, it’s just one piece. Other information, such as employee productivity, capabilities, willingness to stay, and the ability to develop help present a bigger picture of an organization’s people.

Asking the right questions is the first step down a pathway of more meaningful data and insights. Aligning talent metrics to business and HR strategies is a first step, followed by key human capital questions that matter. Asking how to design jobs that maximize the time people spend on their most valuable activity, or how to minimize risks during a change management program yield data and people analytics light-years ahead of simple headcount.

2. Organizations are not Investing like they should in Building the Capability

Rishi Agarwal, Partner-People Analytics Leader, PwC

Before a company invests in creating a new product, it is expected that leaders prepare and review detailed financial projections. However, making strategic decisions without factoring in people data continues to be the norm. Leaders across different business units and support functions aren’t required—or expected—to include people analytics when presenting ideas and they may not be familiar with the type of information available to them.

People Analytics, whether descriptive or prescriptive, is a top priority among companies. However, based on our research, 52 percent do not have dedicated teams focused on People Analytics and 39 percent do not have an associated strategy or roadmap to achieve the maturity levels. Companies must ramp up investments and develop an operating model, governance structure and develop streamlined processes to sustain, operate, and grow people analytics. If executed correctly, the insights provided to employees, managers, and top leadership will pay dividends well beyond the investment.

3. Organizations are not Starting this Journey Early Enough

From the evolution of ERPs to implementing HR in the cloud, a majority of organizations are not starting on this journey early. This results in a lack of data governance from a talent analytics lens and organizations are not realizing the full potential of the data inside and outside of these platforms.

Starting early on the HR transformation journey provides a key stepping stone for the process, technology, and people aspects of people analytics and helps establish a mobilization plan aimed at solving people and talent issues throughout the organization across the different stakeholders. It also helps maximize your HRIS technology investments vs. buying an analytics technology as an add-on.

How to Overcome these Challenges

Key decision makers and business leaders need to know what people data is available to them. A centralized people analytics team should work closely with operations, finance, and other functional leaders to get people data into the hands of every decision maker. This group should be made up of full-time employees that can then become responsible for data governance, technology adoption, and shepherding culture change.

Instead of collecting data and then searching for a way to use it, examine existing business process and determine what people data will be of most value for a given situation. In many cases, the most useful people data may be the most basic, especially if a department is not used to having access to it.

The finance function may start with turnover rate and labor costs as percentage of revenue. As different departments begin to mature in their use of people analytics, broader metrics can be introduced, like how often the successor pipeline is actually used. Regardless of the metrics used, be sure they are measured consistently, such as deciding whether or not to include part-time workers in turnover data.

Once the metrics have been established, distribute the data through a central and visual dashboard that allows leaders easy access. Spreadsheets simply won’t cut it. Users need to be able to access the data from both inside and outside the company. In some cases, people data may be able to piggyback onto existing platforms and may even be able to integrate with other functions like finance and sales. Many vendors are available to help with this step.

Lastly, do not overlook mid-level employees when connecting with business leaders. Decision makers can be found across a number of different levels of an organization. You may be able to convince the C-suite of the value of people analytics, but there won’t be much actual change if operational leaders are stuck in old ways of thinking.

People data and analytics are critical for organizations to become more advanced. The right data, in the hands of the right decision makers, at the right time, can greatly improve business results as departments across an organization become more aware of the information and insights people analytics can offer.

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