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In the era of digital transformation, the role of talent managers has evolved from basic workforce administration to a strategic function that leverages data-driven insights for effective decision-making. The traditional tasks of tracking payroll, filling vacancies and managing headcounts have given way to sophisticated techniques like data mining, artificial intelligence (AI), and machine learning, ushering in a new era of talent management.
In the early days, talent managers lacked access to comprehensive data-driven insights, limiting their ability to make informed decisions. However, with the advent of people analytics, powered by AI and machine learning algorithms, HR professionals now have the capability to extract meaningful information from vast datasets. These smart analytical tools utilise historical data to make accurate projections about various aspects of talent management, including workforce planning and employee turnover.
"People analytics is like discovering a story hidden in your organization's data. It is about understanding and using the data to make practical decisions. When you delve into predictive analytics, it is not just about charts and graphs; it is about anticipating what could happen next," emphasises Vijay Yalamanchili, chief executive officer (CEO) of Keka.
The journey of people analytics dates back to the mid-1990s when it was first introduced as a tool for assessing HR metrics. Over the years, it has evolved from prescriptive analytics to predictive analytics, allowing organisations to move beyond historical data analysis to forecasting future trends. This evolution has been fueled by advancements in technology and a growing recognition of the potential of people analytics in transforming HR strategies.
"Investing in the future of people analytics has been a cornerstone of our approach. Our HR team now comprises data scientists, NLP experts and coding specialists, infusing intelligence into the people strategies. Dashboards, while useful, merely scratch the surface. By delving into emotional insights and continually studying inputs from the organization, leaders can uncover a wealth of hypotheses that fuel impactful interventions," says Sahil Mathur, chief human resources officer (CHRO) at InMobi Group.
Despite the immense potential, research by Bersin indicates that only 2 per cent of HR organisations currently rely on mature people analytics. This reveals a significant first-mover advantage for companies that embrace creative and astute approaches to enter this transformative market.
"Employing people analytics is instrumental in assessing the effectiveness of training and mentorship initiatives within organizations. By harnessing data and insights, informed decisions can be made to enhance employee development and overall impact,” shares Arundhati Ashoka, Global HR Head, CriticalRiver.
The use of people analytics is gaining momentum in the current work ecosystem, offering transparency and intelligent insights that enable strategic planning and execution processes.
“Imagine if 25% of latecomers in your company also receive poor performance reviews. Connecting the dots between attendance and performance data reveals insights that can drive meaningful decisions. From identifying unhappy teams to predicting potential attrition, predictive analytics is ushering in a new era of breakthrough insights that empower HR professionals," adds Yalamanchili.
The annual report of Tata Consultancy Services (TCS) highlights that only 5 per cent of big data investments go to human resources, the core group managing people analytics. Despite the modest progress over the past decade, organisations are recognising the importance of incorporating relational analytics within their people analytics strategies to identify motivated employees and gain insights into key players crucial to retain.
"This shift in intelligence, driven by data and emotional understanding, is transforming how we navigate challenges, from attrition rates to emotional well-being. The integration of emotional and dynamic data has revolutionized our engagement strategies, making culture and connection pivotal. The COVID era accelerated this transformation, reshaping individual philosophies and necessitating a new language in HR – one that speaks to the evolving emotions and values of our workforce, fostering innovation, and anchoring our culture," adds Mathur.
People analytics, as a broader concept downstream from HRMS (Human Resource Management System), focuses on leveraging data for business impact. Organisations are increasingly shifting from conventional dashboards to 'insightboards' as part of their people analytics journey.
According to Deloitte's 2022 People Analytics Maturity Study, people analytics is now seamlessly incorporated into daily operations, with interactive dashboards sharing data and insights with stakeholders. HR professionals are actively participating in data governance and purposefully developing procedures that support high-quality data.
"When establishing objectives and actionable metrics using people analytics, KPIs become paramount. These KPIs should span employee performance, cross-domain skills, productivity, data collection and integration, monitoring employee progress, performance improvement analysis, identification of skill gaps, mentorship program assessment, continuous improvement through data-driven insights, and conducting cost-benefit analyses to gauge the ROI of training and mentorship programs. Implementing feedback loops and iterative processes enables organizations to adapt and enhance their programs to meet evolving needs,” adds Ashoka.
The future of people analytics lies in the reskilling and upskilling of HR teams, enhancing their analytical and business acumen. This includes a deeper understanding of statistical modeling, honing story-building skills, and establishing a strong foundation in data strategy. People analytics, though growing at a steady pace, has become increasingly prominent in recent years. HR leaders are undergoing a gradual shift to make data more tangible, quantifiable and measurable in their pursuit of creating more effective and responsive organisations. As the journey of people analytics continues, the HR landscape is poised for further transformation, where data-driven decision-making becomes synonymous with strategic HR management.
