People analytics is blazing a trail to a better understanding of workforce dynamics. Yet many organizations continue to struggle with manual processes, patchy data, and poor collaboration. This article explains how you can begin to address some of the most common concerns and the steps you need to take to build a world-class people analytics practice.
People analytics is finally coming of age. Until recently, it was considered a niche discipline with fewer than 15% of organizations actively practising it. Today, that figure is closer to 70% and research has shown that people analytics can return up to US$13 for every dollar invested.
Building capability in people analytics
But as investment continues to rise in people analytics, there’s growing evidence that capability varies wildly from industry to industry and there’s debate over what constitutes best practice. Experts in the field have helped to grow awareness by explaining how organizations can begin to build capability, but there’s more that can be done.
So, how is people analytics different from what has gone before? Compared to HR analytics, which essentially helps HR managers measure their success, people analytics combines people data with business data to solve business problems. It can provide enriched insights into the workforce, how it operates, how much it costs, and how it changes over time.You can read more about how we define people analytics here.
Six measures of people analytics maturity
Through our experience of people analytics from hundreds of client projects, combined with expert knowledge and research from our consulting and advisory teams, we’ve come to understand that there are six essential components to building capability in people analytics.
When we measure the skills and competencies that define each component, as explained below, we get a clear understanding of the maturity of an organization’s capability, starting with Strategy and finishing with Governance.
- Strategy: do you have the depth of vision and clear direction for your people analytics practice?
Having an integrated operating plan is fundamental to a people analytics strategy, as is maintaining a strong business case for further building capability. You’ll also need to secure buy-in from senior executives, so attracting an influential sponsor will make the difference to your plans.
- People: what skills and competencies does your people analytics team already have and what’s missing?
Attracting and developing the right skills for people analytics is recognized as one of the most difficult pieces of the puzzle to solve. Adequate resourcing requires careful planning to ensure your progress doesn’t stall. Securing budget beyond immediate needs will also be important in growing capability in a measured and timely way.
- Data: How good are you at assembling and integrating data from multiple sources into your people analytics?
Nothing happens without data and if that data is flawed or inaccurate, the insights you produce could be misleading. Fundamental to good data is having clear rules and conventions that govern data integrity. Start with your existing data and make sure it’s clean to a high level of accuracy before you look to integrate other sources.
- Technology: Are you using software that’s capable of visualizing, analyzing, and modeling your data to support people analytics outcomes?
Technology can automate data aggregation from multiple sources across the business. It can also help you clean data quickly and makes scenario modeling easy. Specialist software can also make light work of data visualization and analysis, but there’s no single system that can do it all, despite some industry claims, so know what you need before you buy.
- Process: How well defined are your data-driven decision-making processes?
Processes are vital to making the cultural changes necessary to support highly effective people analytics. Without changing how you do work with people data, your efforts will eventually fall flat. Processes also underpin how you collaborate across the organization and how you instil confidence and trust in your people analytics practice.
- Governance: How good is your organization at meeting regulatory standards when it comes to people analytics?
Governance brings rigour to your people analytics, requiring you to anticipate and plan for regulatory changes that will affect your practice. It’s easy to stop at compliance but being proactive in strengthening governance is a hallmark of world-class people analytics. It means you can stand up to scrutiny, be transparent, and inform industry best practice.
Your capability for people analytics and what to do next
Many organizations still face difficulties with cleaning and integrating data from several sources. Many still use manual tools such as spreadsheets for analysis and make decisions based on gut feel. And they’re struggling.
If this sounds like your organization, the best next steps you can take is to begin laying the groundwork in terms of skills, collaboration, process capability, and data management. Also, begin combining HR data with other business information and experiment with analytics to produce forward-looking insights for the business.
Eventually, you’ll form a habit of being forward looking and data-driven in your decision making, and your people analytics team will become collaborative and influential. By developing your capability, you’re building the foundation for a business that’s resilient to disruptive change and able to sustain long-term organizational heath.
How do you measure up?
With that in mind, we’ve built an online self assessment that measures organizational maturity for people analytics against industry benchmarks. Once you’ve completed the assessment, you get a personalized report featuring commentary on each component and recommended steps to take you to the next stage of maturity.
In producing each report, we’ve taken care to ensure the commentary and recommendations you receive are grounded in observations informed by quantitative and qualitative insights from our benchmarking process.
We hope the assessment will encourage conversations around people analytics and best practice. Our intention is that you use the recommendations as context for considering and prioritizing your organization’s next steps in improving your capability. As you continue to build and refine this, we hope you’ll be in a better position to become a future-ready organization.
To take the self assessment, click here to get started.
This article is the first in a series looking in detail at each of the six measures of people analytics capability. The first of these is on ‘Strategy’ and focuses on the qualities that organizations will need to build a world-class people analytics practice. Read the next article.
How to take the self assessment
You’ll be asked 25 questions on six measures of capability – strategy, people, data, technology, process, and governance. Your scores are compared to industry benchmarks, so you can see where you are on the maturity scale.
Once you’ve submitted your answers, we’ll email you a link to your personalized report with scores for each measure and recommendations for improvement.
 Deloitte (2017) High-Impact People Analytics https://joshbersin.com/2017/12/people-analytics-here-with-a-vengeance/
 Business Wire (2014) Business Analytics Returns $13.01 for Every Dollar Spent, Up from $10.66 Three Years Ago, Nucleus Research Finds https://www.businesswire.com/news/home/20140917006003/en/Business-Analytics-Returns-13.01-Dollar-Spent-10.66