People analytics is in high demand
40 percent of CFOs expect to make workforce and talent analytics investments in the next three years. That is apparent from the Q3 2016 CFO Signals survey. Embedding people analytics in the business can lead to greater understanding of the issues and actionable insights.
People analytics, which involves using digital tools and data to measure, report, and understand employee performance, is going through a major shift. After years of investing in cloud HR platforms and specialist teams, many CHROs and business leaders, including CFOs, are not getting the results they want. In response, organizations are redesigning their technical analytics groups and solutions to better deliver real-time analytics at the point of need in the business process. For example:
- Leading ERP vendors are implementing a set of people analytics dashboards available to the CEO, to help senior leaders understand attrition, hiring metrics, employee cost, and employee engagement by geography, business unit, and manager.
- The chief operating officer at a large chain of hospitals uses analytics to understand patterns of patient outcomes and how management and people issues contribute to results.
- The sales organization at a major consumer products company has partnered with HR to develop a complete model for sales productivity, which helps predict and diagnose problems, pinpoint training solutions, and improve quality of hiring.
- A retail head of operations now uses business and people analytics to look at customer and employee traffic patterns, identifying new locations where sales people should be positioned to help improve total customer purchase.
For companies that have been investing in this area for years, it is now easier to get these answers than ever before. Predictive analytics tools from many HR technology vendors have arrived, making it possible to analyze data regarding recruitment, performance, employee mobility, and other factors. Executives now have access to a seemingly endless combination of metrics to help them understand, at a far deeper level, what drives results.
Moving beyond the analysis of employee engagement and retention, analytics and Artificial Intelligence (AI) have come together, giving companies a much more detailed view of management and operational issues to improve performance. For example:
- Data-driven tools can now help predict patterns of fraud, show trust networks, conduct ONA, show real-time correlations between coaching and engagement, and even analyze employee patterns for time management driven by email and calendar data.
- Artificial intelligence software can now analyze video interviews and help assess candidate honesty and personality.
- Tools can now analyze hourly labor and immediately identify patterns of overtime and other forms of payroll leakage, enabling improvements of millions of dollars through improved practices in workforce management.
- Off-the-shelf retention models are now available from SAP, Oracle, Workday, ADP, Ultimate Software, and others, making it easier than ever to understand drivers for attrition.
- Deloitte and other companies are now looking at travel data, billing hours, and other human performance data to help employees improve their levels of energy, wellness, and business performance.
A big trend in 2017 is that these new solutions are business driven, not internally HR focused, challenging HR departments to move beyond their own internal view of data and leveraging people data for a broad range of business problems.