People Analytics Is Trending Up
This summer, I have been watching a lot of baseball. The sport has always captured my attention because it is highly strategic game. Baseball managers are faced with hundreds of analytical decisions each game, including who to start, when to substitute players, what pitches to throw, how to align the defense based on a hitter’s tendencies, and how aggressively to approach base running (just to name a few). Baseball franchises have increasingly turned to analytical models in order to make more informed decisions in constructing rosters and projecting likely outcomes on the field. In fact, most of the top professional baseball franchises now employ teams of analysts who use empirical data to look for competitive advantages with personnel and financial decisions.
These types of decisions are at the heart of people analytics. People analytics is a rapidly growing branch of data analysis that is particularly useful in the field of human resource management. It involves a thorough analysis of organizational “big data” to discover how employees, processes, and teams are performing, and how they are likely to perform in the future. People analytics provides a data-driven way to make sense of complicated workforce issues like employee satisfaction, retention, individual and team productivity, recruiting, marketing, sales, and compliance.
According to Deloitte’s Global Human Capital Trends 2016 publication, recent investments in people analytics are starting to pay off for businesses around the world. The number of businesses that report being ready to incorporate people analytics has increased by a third (24% to 32%) and the number of businesses ready to develop predictive models of performance has doubled (4% to 8%). According to Deloitte, these advancements in people analytics capabilities are attributable to the increased availability of integrated systems and the willingness to invest in building analytics teams.
Though significant gains have been made in this field, there is still room to improve for most organizations. The report details that 62% of organizations surveyed rated themselves as “weak in using big data for recruiting.” Additionally, more than half of respondents reported using HR data inadequately in predicting workplace performance and improvement. However, the report predicts dramatic improvement in these categories in the upcoming years, as technology continues to improve to meet business needs.
Just as baseball franchises search for a competitive edge in building a winning team, organizations across the globe are investing in human resources to make data-driven decisions about how to best manage their employees. People analytics allows organizations to hire, retain, and motivate the right people to achieve their business goals.