People analytics: Expanding the impact of talent with better decision-making

The massive emergence of people analytics is one of the biggest management revolutions in recent years. 

The need for more rigorous, data-driven management has, however, a long history. As early as 1911, Frederick Taylor demonstrated its added value in his book The Principles of Scientific Management.  

Today, the transformative impact of big data, AI and new technological capabilities has taken this management philosophy to the next level in the field of human resources, as David Green and Jonathan Ferrar explain in their brilliant book Excellence in People Analytics. 

What is people analytics and why is it important? 

People analytics is the process of collecting, analyzing and using data to make strategic decisions in HR management, minimizing resources (time, cost, etc.) and maximizing value generation. This creates great opportunities where intuition and previous experience are complemented by objective data analysis. It is a new frontier in management — and it is advisable not to be left behind.  

Joan Clotet explains it clearly: “In the fight for talent, whoever starts developing analytical skills first will be best prepared to anticipate the future. It is a path that should be embarked on as soon as possible.”  

People analytics is a powerful tool to positively impact HR management and, as a result, better execute the business strategies that generate extraordinary results. Today the sustainable success of any business depends on people. 

Two practical applications of people analytics 

It is essential to focus on addressing business needs. Organizations face the challenge of rapidly and cost-effectively improving their current business performance while rapidly building the capabilities that will ensure sustained growth. 

Improving the performance of the current model

Multifactor analysis of workforce data allows us to detect staff turnover risks, effectively target variable compensation, identify the factors for successfully promoting employees and increase the attractiveness of our brands as employers. 

Entering into an in-depth analysis of our HR big data also helps to significantly and rapidly improve key people-management metrics, such as engagement, voluntary turnover, absenteeism, productivity, diversity and promotions. 

Accelerating the development of capabilities to facilitate growth

Along with a solid strategic workforce-planning process, it provides us with valuable information and action plans for HR issues such as filling future critical skill gaps, identifying emerging and at-risk jobs, succession planning, the evolution of our ‘population pyramid’ and the medium-term evolution of personnel costs.  

Managing human resources with clear and visible information is more important than ever. People analytics helps us to distance ourselves from the distractions of daily challenges and instead evaluate our previous and future multi-year evolution. By detecting internal and external market trends (positive or negative), we can manage more proactively.  

In short, people analytics brings clarity to the HR data that today’s organizations can access. This is critical because, as Yuval Noah Harari brilliantly states, “In a world flooded with irrelevant information, clarity is power.” 

Three key elements to put people analytics into practice

To successfully implement this powerful tool, the following elements are required: 

Simplicity: Define the problem in a simple way and implement timely and effective actions to solve it. 

Impact: Identify the expected outcome and help leadership see the opportunities in order to gain their commitment and speed up implementation. 

Reliability: Develop databases of talent and business data that record the past and allow projections into the future. 

Towards a new kind of people management 

The disruption that is shaping business today requires every functional area to evolve and seize new opportunities in order to provide commercial value. This is also the dilemma facing human resources management today. 

People analytics radically and positively redefines HR processes as Bernabé Pérez states, to make them more agile, rigorous and strategic, combining multiple intelligences (artificial and human, rational and emotional) with a clear vision of purpose. This is the only way we will be able to deal with the complexity of the environment and the eternal mystery of how to get talent excited about connecting with a purpose.  

An "art" where intuition will play an important role

HR management will continue to be an art, to which we can now add the raw power of people analytics. This magical cocktail will take us to the next level. New technological capabilities will complement our valuable tacit knowledge and savoir-faire with additional depth, rigor and precision. 

Peter Sondergaard states emphatically: "Information is the gas of the 21st century, and data analytics its combustion engine".  

Let's take care of our engine so that it performs powerfully and takes us to a good destination. 

Article written by David Reyero and Francisco Martínez Colunga