The future of people analytics – more evolution than revolution

If you were to ask Google, “How important a priority is People Analytics for organisations?”, you will find multiple sources that point to a 2019 Harvard Business Review article. The article stated that 70% of companies considered people analytics to be a high priority. 

In many ways the fundamentals of People Analytics have remained unchanged for years. 

The overall goal is still to enable HR departments to gain data-driven insights to make decisions on different people processes and turn them into actions to drive the performance of an organisation. 

The data journey that organisations are required to go on is still a well-trodden path. Moving from fragmented datasets that are difficult to assess and analyse, towards the adoption of data lakes that can handle ‘big data’ and drive predictions about outcomes.

Even the types of People Analytics that organisations can pursue have remained constant – descriptive, diagnostic, predictive and prescriptive analytics.

Descriptive analytics: analyses patterns in historical data sets to gain insight into what happened, but not to make future predictions. 

Diagnostic analytics: seeks explanations for the insights revealed by descriptive analytics.

Predictive analytics: uses past and present data to determine insights and then uses models to predict what might happen in the future.

Prescriptive analytics – leverages predictive analytics into decision options.

With a consistent overarching aim in mind, and clear roadmaps for data and analytics, over the past 5 years, the challenge for organisations has been less about figuring what they need to do, and more about how fast they could do it. Two major obstacles loomed large; business buy-in, and internal capability. 

During an interview on the sides of the UNLEASH World 2023 conference, one People Analytics and HR Director for a global luxury brand, shared their mandate to build a new digital HR department that moved beyond simple data collection and reporting, towards ‘proper’ people analytics and data-driven decision-making. Therein lies both an opportunity and a challenge. 

Although there is recognition about the potential value of HR data and the impact it stands to have on organisations, many companies are still in the initial stages of building their people analytics capabilities, often struggling to make real progress. They lack the capability to embed data analytics in HR processes or harness any real predictive power to support decision making. The truth is that most are still stuck cleaning data and streamlining reporting. These are ‘nice to haves’ but are not creating any lasting business impact. Faced with these outcomes, why would organisations choose to reposition their HR departments as people analytics departments?

Fortunately, technology advancements have provided more innovative ways to use analytics and data-driven insights. The most transformative changes are not necessarily the most complex, even though the advent of Machine Learning and Generative AI offers plenty of executing new avenues for People Analytics professionals to explore. 

Indeed, the sheer ease of use, and scalability of modern technology platforms and tools will lead to the next stage of development in People Analytics. Manual workflows are now more easily automated, large volumes of data are processed readily, and insightful data visualisations are available at the click of a button. This doesn’t mean that organisations can ignore the skillset development of their HR professionals – indeed, putting a best-in-class job architecture in place to support the development of the HR function will remain critical. However, advances in technology will likely simplify the challenge of upskilling HR teams, at least when it comes to the technical aspects of pursuing a People Analytics strategy.

Although technology has changed the game, it may also have moved the goalposts, raising expectations that People Analytics professionals will not only accelerate the pursuit of long-standing goals around data and analytics but perhaps deliver even greater long-lasting business value.  

It will be down to People Analytics professionals to manage and reach these expectations. Not only by leveraging technology but also doubling down on the ‘people’ aspect of People Analytics, becoming better at consulting, influencing, storytelling, making decisions and taking action. Without the ‘proper’ application of these human aspects, it’s almost impossible for technology alone to deliver ‘proper’ people analytics.

The exact positioning of People Analytics within a given organisation’s strategic priority will depend on many factors, and only time will tell whether enough progress can be made on both the technology and human front in order for People Analytics to continue to evolve. However, even if more organisations simply find it easier to achieve the same People Analytics aims as they have pursued for many years, then the positive outcomes for the business world are likely to be significant, as business expectations are met and real business value is delivered.