People analytics is a core foundation for being able to create employee experiences. In today’s world, any company can replicate your business model, the goods you produce, or the services you offer. The only thing that organizations cannot copy is your people–they are your greatest competitive advantage. People analytics gives organizations the data and the insights they need to make people-related decisions while also empowering organizations to test ideas and run experiments.
Organizations today have lots of data about their employees, including salary, tenure, satisfaction, ratings and reviews, performance, and much more. The trouble is that few organizations have a way of putting all of this information together to understand their employees. The data is actually quite diverse and combines everything from organizational data (such as looking at an organizational chart or revenue) to individual data (such as compensation and tenure) to emotional or psychological data (such as engagement and job satisfaction). But what about other external data that an employee provides? On a resume you can look at where employees went to school, their major, GPA, extracurricular activities, awards, connection, and so on. The data sources are diverse, and the amount of data is vast.
During a discussion I had with executives at a large financial institution, they shared two interesting facts with me: people tend to stay at this company for a long time, and when people do leave the company, it usually happens at around the two-year mark. My questions were then why people stay at the company for a long time and what happens at the mark that causes employees to leave? The organization didn’t know. For a long time we also assumed that people who go to top-tier universities and get high GPAs will also perform better inside our organizations. Well, people analytics has now helped us realize that where you went to school and how well you do in school don’t predict how well you will do at work.
What if you knew:
- What qualities make a great manager
- When employees get burned out
- What makes employees most productive
- What employees leave or stay
- How to get teams to collaborate
- How to get employees to be healthier
- How activities outside of work affect employees at work
This is just a smidgeon of what people analytics can help you figure out. These aren’t just HR challenges, they are business challenges that affect every team across the company. Essentially, every organization is going to become its own research firm that will be able to ask and answer any questions that arise.
People Analytics in Action
Companies around the world are adopting people analytics. Here are just a few examples I found that I included in my recent book on employee experience. Microsoft saw an issue with internal mobility, and with people analytics was able to make policy changes that made it easier for employees to move around inside the company instead of going elsewhere.
Using various data points, such as compensation, tenure, and job performance, LinkedIn is able to create a type of heat map that helps managers better determine when an employee might be getting ready to leave the organization. This allows LinkedIn to intervene before it happens.
Like LinkedIn, PwC wanted to see if it could predict which employees would leave the company at around the 12-month mark. Sure enough right around that time, the company started to notice that the people the people analytics team identified as going to leave actually started leaving. PwC also had a big assumption around recruiting from Ivy League schools. It believed that employees who were recruited from the top-tier universities would perform better than everyone else. Thanks to people analytics, this was proved false. In fact, employees who were recruited from non-Ivy League schools performed better. This allowed PwC to redistribute its recruiting funds and focus on different universities.
Cisco got rid of its annual employee engagement survey and now uses people analytics. By the time is would launch the survey and then analyze it, share it, develop a plan around it, and actually implement it, at least five months would go by. At that point the managers would say the program was already obsolete. The problem with most people analytics efforts is that they provide data that is too broad, to people who can’t do anything with it, at a period when no acton can be taken. To solve this problem, Cisco shifted its approach to focus on experience and engagement at the team level.
Today, any team leader at Cisco can run an eight-question pulse survey anytime he or she wants to get an idea of what’s going on in the team. These responses are then analyzed and reported back in a matter of two to six days instead of six months. Then, the analysis is customized based on what the leader’s strengths are and provides strategies around how to improve. Cisco is learning and adapting as it goes, always with the aim empowering teams to become better.
Organizations must do their own internal research to find our their own truth. It’s easy for us to read research reports and studies from consulting firms and assume that what we read applies to us. If a study says millennials are job-hopping, then it means our millennials are job hoppers. If a study says diversity is an issue, then diversity must be an issue for us. If a research report says engagement is at an all-time low, then our engagement must be at an all-time low. None of these conclusions make sense. Although looking at external research can provide some broader context around certain things, the information should all be taken with a grain of salt. If you really want answers to questions and if you truly want to know what the research says, then conduct your own research inside your organization. That’s the only way to make business decisions, especially those that pertain to your people.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.