Data is the foundation upon which quality information is obtained in a company and, therefore, it is the first step in designing a valid strategy that enables decision-making and the implementation of necessary changes. It is, ultimately, the difference between moving blindly or walking with confidence.

Its use is increasingly widespread, although it has always been somewhat common in all types of companies, even if in a very simple or rudimentary way. What has changed is that technological advancements have made it possible to collect, group, and analyze increasingly large volumes of data from different sources, resulting in increasingly greater and more useful knowledge.

The human resources area has not been immune to this evolution, and People Analytics solutions are a clear example of this. Let’s take a closer look at what it entails and why it’s revolutionizing people management in companies.

What is People Analytics

Also known as HR Analytics, this trend reflects the increasingly widespread understanding that the people within an organization are key to its success. Knowing them is a basic need, and although it can be done in various ways and through different actions, data is extremely helpful in this task. This is where People Analytics comes in—the analysis of data related to an organization’s human resources.

This analysis allows, for example, the identification of individuals who drive business results. To achieve this, the quantification and identification (the transformation of data into relevant information) must be systematic. Analytics is an exceptional ally in quantifying job performance, which can be measured using numerous metrics. The collection of data for subsequent analysis through intelligent examination enables more objective, and therefore more reliable, conclusions.

This is one of the most current approaches to thoroughly understanding a company’s talent and, as in other areas where data analysis is used, its goal is to improve decision-making—in this case, regarding team and human resource management. Just like other types of data analysis, People Analytics is useful not only for gathering present-day information but also for making future projections using historical data. This is where we derive the greatest value from this methodology: forecasting the future reveals the likelihood of certain hypotheses in people management being fulfilled. Consequently, it is a significant aid in saving time and money through preventive actions.

Thus, we can use People Analytics in some of the most relevant procedures of HR management:

• Talent acquisition (e.g., comparing historical CVs similar to current candidates and their business outcomes).
• Talent retention (e.g., identifying signs of demotivation).
• Training (e.g., identifying the most suitable subjects for each profile).
• People management (e.g., identifying relationships between teams and evaluating their impact).
• Compensation (e.g., using mathematical models to predict the impact of potential salary changes).

How to Get Started with People Analytics

As often happens with other tools, such as a CRM for instance, it is first necessary to establish a framework in which to operate. We need a logical overview of the HR department’s situation, understand what we require, and define what we aim to achieve. From there, it is time to transfer that to analytics by collecting relevant data and using it in statistical operations. Then, through business intelligence, we can ‘play’ with the data to discover insights, find patterns, filter useful data for a specific goal, or form hypotheses.

The purpose is essential. Knowing that you need to understand employee turnover for the next year or the satisfaction level of employees will help identify the data that needs to be collected, how to collect it, and how to execute the strategy.

Benefits of Using This Type of Data Analysis

There is a key benefit that justifies any investment in business intelligence: the ability to make the right decisions at the right time. Against trends, biases, assumptions, individual experiences, or traditions, data (with proper treatment) is the only reliable source of information.

Specifically speaking about People Analytics, we can identify four main benefits that are applicable to any company:

• Better people management.
• Monitoring of strategic human resource decisions.
• Identification of areas for team improvement.
• Employee satisfaction (with an expected boost in performance, productivity, creativity, etc.).

Data analytics is an increasingly important activity in business management. Its usefulness is beyond doubt, and its potential can be harnessed in any area of a company or sector. Human resources are no exception, and in a context where hiring is becoming increasingly difficult, People Analytics can make a substantial difference in improving people management, both in attracting and retaining the best talent.