What is People Analytics?
People Analytics is a methodology that uses data analysis to support people management in the workplace. Its application has increased significantly in companies, since the correct use of information facilitates decision making which helps reducing subjectivity and boosting the efficiency of people management.
The application of People Analytics reduces subjectivity and improves the efficiency of the people management model
Imagine that there is an opening for a Senior Analyst position in the Accounting area. How can you know whether possible successors within the company are available? Besides speaking directly with the area manager, employees that are successor candidates can be analysed using the database, including those from other areas, for a replacement or promotion. Analyzing each person’s characteristics, their career growth curve, skills, and competencies through People Analytics will help the company find solutions to make a decision based on data and not simply experience.
This is just one example of how the results generated by measuring and analyzing employee performance can transform all People & Management processes, from recruitment to talent retention.
Recruitment and selection processes can be very complex, demanding high costs and effort. Even though outsourcing is a common solution for cutting costs, selecting people is one of the most strategic activities for a company and has increasingly involved the participation of top leadership.
Data analysis is a method that offers a series of benefits when it comes to supporting a more accurate selection process with lower costs. When applying for a specific job opening, the candidate enters some information that will be used to create a preliminary profile to be cross-referenced with the job opening requirements, and also with a profile considered to show good performance for that position. Historical data is essential for creating this profile, and may include educational background, performance assessments, and the mapping of each employee’s skills and competencies, among other characteristics.
The first filters are created automatically, assisted by quantitative analysis tools, increasing the probability for success and leading those candidates statistically more suited for the position to more advanced phases of the process – such as interviews.
Development and Performance Assessment
Normally completed every six months or annually, the performance assessment offers the employee feedback about his/her performance, highlighting the strong points to be explored and those areas to be improved. Maintaining a reliable history of this information means fast data monitoring and viewing through tools, supporting individual development, but also allowing for the comparison with other company employees.
Below are the benefits that this comparative analysis through People Analytics offer:
- It promotes meritocracy through a faster comparison of employees, facilitating a fairer promotion process;
- Allows for the mapping of characteristics to identify the most adequate profile, or even complementary ones, necessary for each position or area of operation
- Fosters a better understanding of employees’ career growth curve, supporting the definition of their career plan
- Supports the development of a succession plan
- Facilitates information sharing and lessons learned among managers, leading to an improvement in employees’ Individual Development Plans (IDPs)
Often times, to win the market war in talent retention, companies offer more money to those who stay, whether in the form of a salary or bonus. However, in environments facing a high rate of tension in relationships and employee dissatisfaction, this strategy has generally not proven itself to be effective.
A meritocratic environment, in which employees feel recognised for their work and receive constant feedback for their development, is a differential that not all companies are able to create.
By monitoring performance assessments and the employee career history, it is possible to identify certain situations ahead of time that are indicative of job abandonment. Other situations, however, are the result of the work environment and can be identified through an organizational environment survey. This type of survey will be analysed to identify improvement opportunities for the organisation, resulting in a environment that encourages engagement and retains talents.
And what do the numbers show?
In a recent survey performed by Visagio Group in the Brazilian market, the results show that only 24% of the 81 companies that responded have some initiative focused on the topic, revealing that it is still a new theme at organizations in the country. A limiting factor of People Analytics that affects this result is data availability and quality: only 13% of companies indicate that they have access to high quality data.
As for its daily use, the survey revealed that the most common practical applications of People Analytics are focused on Dashboards and Workforce Planning, demonstrating that there is still little use of the tool for employees’ career, succession, and retention.
People Analytics can bring many insights to resolve People Management issues within organisations, and it is important to emphasise that different types of businesses may need specific mappings.
Furthermore, contrary to what people may think during the initial period, People Analytics was not created to mechanise the People & Management process, but rather to support and present information that can be used to back more well-founded decision making.
After all, data does not generate changes in itself. Without people to criticise it, transform it into actions, monitor its results, and determine more objective paths, People Analytics becomes yet another generator of quantitative metrics.
About the Authors
Janaina Jacobs is a Visagio consultant specialised in projects focused on Process Engineering, Organizational Restructuring, and Shared Service Center Implementation in the real estate, retail, health, financial, and telecommunications sectors.
Marcela Figueiredo is a Visagio consultant specialised in projects focused on Management Model, Organizational Restructuring, and Process Re-Engineering in the retail, financial, public management, and other sectors.