People Analytics: the Key to Improving Business Results

Aug 13, 2020


How the evolution of HR into an analytically driven profession has made way for people analytics.  

HR has evolved to be an analytically driven profession where people analytics and a data-driven culture plays a key role in improving organisational performance.  

In the past three decades HR has evolved into an analytically driven profession with people at the core. Technology has amplified what once used to be a back-office task. It has put HR at the forefront of not only collecting data and analysing insights but also predicting business trends. With time HR leaders have upgraded themselves to understand the language of the business. According to a recent CIPD report1 talent accounts for 80 per cent of the business value. So, business leaders are now expecting more than just a head count report from HR executives. This informs us the need to understand people analytics and how it can be used to improve business results. 

What is People Analytics?

Talent has never been more critical to business performance than today. Organisations now have the need to comprehend with precision what it takes to recruit, retain and motivate their workforce. Until recently, most businesses based their strategic workforce decisions purely on hunches and intuitions, setting them up for future disappointments. The introduction of people analytics has brought insights by introducing a more data-driven approach to strategic decision making. People analytics offers a systematic process to drive business decisions about people i.e. the workforce and customers. The book ‘Introduction to people Analytics2 inform us that, 'True People Analytics aims to encompass HR, the entire workforce data and customer insights. People Analytics inculcates the approach of measuring and analysing all this information and knitting it together to improve decision making and business performance. This definition brings attention towards the fact that workforce analytics cuts across the business and encompasses a data-driven solution for HR leaders to gain insights into the whole business. However, for this to succeed there is a strong need to encompass a data-driven culture at the organisational level. 


People Analytics – a journey, not a destination

Even before we begin to encompass a data-driven culture, it is important to understand that the field of people analytics is typically new and is still evolving. So, it is safe to say that the terms HR analytics, talent analytics, people analytics and workforce analytics are often used as synonyms referring to statistical analysis of employee data. However, each of the terms have different connotations when addressed. HR analytics is usually used among HR consultants that address challenges to clients in the HR departments and thus creates an aura of confinement from the overall business. Whereas, people analytics addresses the overall business. Thus, capturing insights from employee performance data from areas such as marketing, logistics, accounting and presenting its overall business impact. It is therefore important for organisations to first develop a culture of trust by openly sharing employee performance data and insights readily across the business, building on a progressive data culture. 

People Analytics – Moving forward


For HR to evolve into a data-driven function it must counter the following;  

  1. It’s ability to gathering and connect relevant workforce and performance data. 
  1. Select a relevant analytics software that can integrate the whole organisation. 
  1. Develop expertise to analyse the mounds of workforce data available. 


Unfortunately, the variety of HR software solutions available primarily focus on what has already happened rather than what will happen; and are disparate from workforce data across multiple, disconnected systems. This is usually depicted via ad-hoc and rigid reporting dashboards that such software's encompass, enabling HR professionals to only use data reactively rather than proactively. Such systems are unable to integrate workforce data from the whole organisation. Therefore, most of the time of HR professionals is spent on manually downloading this data and processing spreadsheets into individual reports. Each department submits its own report and predicts the fate of the workforce without integrating the multitude of this data into one whole system. What we need now is a people analytics software solution that can integrate all this data from disparate systems and present it in a simplified and meaningful manner. This will enable every department to align their workforce with the business objectives and ultimately improve organisational performance.  


Today CEOs, CFOs and CHROs alike understand that data-driven tools are essential to improve decisions about talent, such tools that can provide insights into revenue and profits. Therefore, corporate leaders and boards are now embracing workforce analytics as a strategic tool that can directly impact financial results. It is estimated that within the next two years 57 per-cent3 of all businesses will employ people analytics using data integrated across multiple systems. The challenge now for business leaders is to select the right analytical tool that can integrate the magnitude of workforce data and provide meaningful explanations. Thus, enabling them to make strategic workforce decisions and ultimately improve business performance. As, without a clear insight, accurate workforce decisions will always be at risk. 


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