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Five Ways to Boost your Business Strategy with Employee Analytics

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Although more common in medium and larger organizations, people analytics—or employee analytics— remains a top priority for most companies. While some got better, others are not there yet. This is mainly because people analytics, when performed right, is a complex and diligent process.  

What is "People Analytics"? 

People analytics (PA) can be defined as the use of analysis and measurement techniques to understand better the people in the organization and make positive changes based on the data. The process usually has five stages:  

Several studies have shown a direct correlation between the level of PA culture in an organization and business performance: 65% of those surveyed said their companies perform better if there’s a higher level of PA culture.  

Unsurprisingly, data gathering through active sources and generating reports are the most popular activities, while building models and providing insights are the least popular. This finding points to the biggest issue with the ‘system’ – most companies are not adept at making positive changes based on people analytics due to the HR department’s lack of skills or specialized tools.  

Data integration and data clean-up remain the two most challenging areas of PA. To emphasize the importance of PA in an organization and to make sure it gets prioritized and funded, we’re going to look at five ways PA can significantly contribute to the overall business strategy success.  

1. Attract & Retain High Performers and Talented Individuals

Data and analytics are paramount in studying the process of talent acquisition. Each step in the pipeline offers information about several metrics, like time to hire, acceptance rates, spending, number of applicants, bottlenecks, etc. For example, after looking at the data, HR professionals might notice that too many resources are spent on hiring people who don’t perform well in the long run.  

On the other hand, the system can create ideal employee profiles, spotlighting from the beginning which talented candidates are more likely to stay with the company for a long time.   

2. Improve Project Profitability 

Measuring profitability is one of the main business goals. Project managers or team leaders, must ensure the estimates are accurate and the team performs optimally. The data they should gather and analyze is the initial estimate, time spent on tasks vs. time allocated, cost vs. revenue per employee, and project profit margin. 

The data will help project managers or team leaders assess whether the projects they’re working on are profitable and enable them to make the necessary adjustments for further projects.  

3. Increase Employee Engagement 

People analytics is among the most frequently cited in fostering employee engagement. It involves descriptive analytics and shows the level of engagement by category, namely position, department, gender, age, etc. 

Advanced systems and applications can identify the drivers and predict specific actions that significantly impact and improve employees’ engagement. For example, the system will show that people encouraged to speak freely are more likely to be more engaged with the projects they are working on. 

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4. Solve Productivity & Efficiency Issues

Employee productivity and efficiency are often overlooked, and this is because business leaders sometimes spend more time focusing on work productivity for its own sake and less time trying to prioritize, understand, and reframe what employee productivity and efficiency genuinely mean. 

PA data might reveal insights managers and leaders didn’t consider, such as poor planning or prioritization, inexperienced employees working on complex projects, overqualified employees wasting time on trivial tasks, bad communication habits, etc.   

5. The Impact of Modern Practices on the Workforce

A danger in a company’s life is investing resources and designing a complex system of processes only to get fixated on it for months or even years. The bigger the company, the more difficult it is to tackle this problem. 

PA data can show what’s still working, what needs to be changed, and when and how one should intervene. For instance, in case of decreased Slack communication efficiency within a growing department due to constant interruptions, one might consider moving to a more traditional, asynchronous channel, like email.  

On a Final Note 

These are just a few examples of how employee analytics can positively impact the overall business strategy. Even in small companies that don’t have a system, a good start is to collect data through active sources (explicitly asking employees directly or through surveys for information, preferences, and opinions) — which is still the most common approach.  

Written by Paymo
Written by Paymo

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