Mistakes happen all the time in business, and we will never truly prevent them. The problem is, bad decisions cost time and money, so we still want to prevent as many of them as possible. With the help of data and analytics, we can begin to understand what is happening and make more informed choices, helping to reduce costly mistakes.
Therefore, many companies try to quantify all aspects of their business because that’s how you analyse a situation, through reliable data. As technology progresses, people are getting more and more creative in the development of quantifiable methods, and the more data you can get, the more accurate the solutions that you present will be.
However, there is one factor that still stands as the most difficult when converting to quantifiable data, and yet is still the biggest part of any business - the human factor.
This is where HR analytics and/or People analytics comes in.
What is HR Analytics?
HR Analytics is defined as 'the systematic identification and quantification of human drivers of business outcomes', according to the AIHR Academy.
In simple terms, HR analytics is analysing HR trends across an organisation to gather problems and find solutions. Factors such as absenteeism rate, hire rate versus exit rate, and anything that has to do with the workforce is investigated in HR analytics.
The purpose of HR analytics is to determine and analyse human drivers that will affect business performance. This is done by analysing these factors:
- What are people doing?
- Why are people doing it?
- How engaged are the people with the company activities?
- What are their competencies?
- How will this influence business outcomes?
The way that HR or businesses do this is by acquiring data from their employees through different surveys and activities as well as already existent business data (e.g. from the HR system).
HR Analytics starts with a business problem. The analysts or executives will investigate the different aspects of the business including the employees and gather the relevant data. This data can the be analysed to determine how what is causing the issues within the business, and decide on the best solution for the problem.
If you'd like to find out more about this, head to our recent article: What is 'HR Analytics'.
The Importance of Data-driven Analysis
Let me give you an example of how this is done for an organisation: the absenteeism rate of a company started to increase. This is a problem due to rising costs for absent staff, and a drop in productivity.
The first thing that the executives will ask is “Why?” - “Why is the absenteeism rate increasing for this month or for the last quarter?”
Usually, in this process, people will derive opinions and speculations. However, this is not based on reliable data and is susceptible to unconscious bias.
An investigation of the data now begins - why is the absenteeism rate really going up? What is the percentage of absences for this month? What is the projection for next month? If the absences are at 12 percent and last year they were at 7 percent, why has this happened?
Once the baseline metrics are checked, the next thing to do is to find out why. This can be done through different methods such as surveys and activities aiming to find the cause of the increasing absenteeism rate.
This will answer questions like:
- What are the reasons why people are not coming to work, are they different to last year?
- What options do they have when they are absent?
- Are there any common illnesses going on during this time of the year?
- Is the wellness program helping in the reduction of absenteeism of the employees?
From the analysis of this data, an investigation can occur in order to reach a hypothesis, for example - it may be that more people are absent this time of the year because there is a virus spreading around the workplace, and, on analysis of the data, it is calculated that a high percentage of the individuals who are absent were also on an away day together, and this can be attributed as a major cause.
From this, a solution can be derived. “What do we do to prevent such a virus from coming back and spreading again? Maybe we should encourage hand washing more often. Or maybe we should provide more healthy eating options during away days, or decrease the amount of people travelling on a single item of transport?.”
This is what the process of HR Analytics is all about. It’s about gathering information, about identifying and quantifying the cause and elements affecting or resulting in these business problems.
So what is People Analytics, and why is it different from HR analytics?
Some people regard the terms HR Analytics and People Analytics to be interchangeable, however, for the purpose of this article, we would suggest that many companies would prefer to use what we regard as People Analytics. With the change in name, comes a shift in focus. When the term HR Analytics was coined, the purpose of this practice was solely to learn more about the business. The focus is on the business and not on the staff themselves. The people are just mere numbers. However, as technology and times have progressed, organisations have realised that the human factor plays a significant role in the overall business performance, thus, the shift in focus.
With the emergence of employee-centric culture, employees are now seen not just as numbers but as an important element in the overall business success- as Richard Branson once said - "look after your employees, and they will look after your customers". Even the way of data gathering has also been altered to get more information on how people think and come up with the decisions that they make. What are people's opinions on matters? What suggestions can be made for improvements to areas of the company? What would encourage a more creative working environment? What would encourage more collaboration?
People analytics is now being used in the different aspects of the business such as the hiring process, amendment of company policies and most of all, creation of wellness programs.
The data gathered through people analytics now makes it easier to understand;
- Why people stay in a certain job
- What makes people stay
- What makes them perform at their best
- What motivates them to engage more to the company
- How long people stay in a certain job
- Why people quit
This is the benefit of using People analytics over standard HR analytics.
Therefore, we could conclude that people analytics is the modern day version of HR Analytics (but I'm sure there will be some disagreement on this!).
The most important thing to take away here though, is that if you are going to look in to any kind of analytics surrounding people, you must capture data from the people themselves, and not just data captured about them, this will allow you to gain far more valuable insights.
What are the benefits of gathering People Analytics and HR analytics to your wellness program?
A specific point we wanted to address in this article, is how wellness programs can use people analytics?
Just like how organisations are using People Analytics to improve business performance, wellness program providers should also make use of People Analytics. This can be done by gathering data from the employees for the wellness programs implemented, to capture how they feel about it.
You can ask questions such as;
- Why are employees not participating in your wellness program?
- What program are they mostly participating in and why?
- What programs do they not like?
- If given the choice, what program would they want to have? Why?
- How effective do they find the wellness program to be?
From the answers to these questions, you can begin to improve your wellness program so that it will fit more to the company’s, and the employees needs.
If you'd really like to take this further, you can begin use this data to truly understand why being able to calculate the ROI of your wellness programmes is so important, and how it can be done.
If you have more questions about metrics on how to measure the success of your wellness programs or if you need help in getting your ROI in your health and wellbeing programs, we are here to help. Download our free mental health and wellbeing ROI calculator here:
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