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What is People Analytics and How Can it Help in Hiring Top Talent?


Guess what? Approximately 71% of HR executives consider people analytics as crucial to their HR strategy – an indispensable tool for their organization. 

What’s all this hype about? 

With the countless benefits of people analytics becoming increasingly evident by the day,  its importance in ensuring organizational success is undeniable. 

With origins dating back to Frederick Winslow Taylor’s (an American engineer) work in 1911,“Principles of Scientific Management”, people analytics has come a long long way.

It no longer limits itself to its basic HR functions by incorporating data and insights from various sources such as finance, customer data, and marketing.

The outcome of this, one might ask? Organizations can now gain a comprehensive understanding of their workforce, ultimately facilitating data-driven decisions!

But what exactly is people analytics, what does it involve and how and why do organizations leverage it? There’s a LOT to unpack here!

HR professionals analyzing people, talent and organizational data to make data-driven decisions

What is people analytics?

In layman’s terms, people analytics is all about collecting and making use of organizational, people, and talent data.

These insights are then used to understand and improve workforce processes, and optimize an organization’s overall business outcomes. 

But what’s in it for the HR team?

For the HR team, people analytics enables the department to gain data-driven insights that enables them to make decisions on different people-related operations.

A word of caution though, before we proceed!

It’s incredibly common for people to use people analytics interchangeably with talent analytics or workforce analytics.

But let’s nip that misconception right in the bud!

The distinction is quite straightforward. In talent or workforce analytics, the data is exclusive to only human resources.

While people analytics on the other hand, transcends HR and includes insights from other departments like say, finance, customer service, or even marketing.

That’s all fine, but how exactly are organizations actually using people analytics?

Organizations are making use of people analytics across numerous areas, such as:

  • Employee retention and turnover
  • Compensation, benefits, and total rewards
  • Performance management
  • Recruitment, interviewing, and hiring
  • Employee engagement initiatives

No wonder it’s as popular as it is!

HR team discussing people analytics strategies for optimizing business outcomes

Why is people analytics important?

Considering all that’s been said thus far, just imagine the benefits that come with people analytics? 

Here’s a stat to help you with that –  with better access to people data, 70% of executives say they could make faster and better decisions!

Additionally, organizations have reported a 25% rise in business productivity and a significant 50% decrease in attrition rates!

Therefore, it would be an understatement to say its importance cannot be overstated. Here’s a look at the benefits that come with:

1. Data-driven decisions:

Data is at the center of both people analytics and organizational success, serving as a common denominator. By analyzing data, organizations gain insights to inform strategic decisions and drive performance.

2. Improved talent acquisition:

What happens when a data-driven approach meets talent acquisition strategies? Top talent is delivered, and how!

Through a thorough analysis of the data collected and historical hiring patterns, organizations identify key characteristics of successful hires. 

This enables them to target and attract top talent more effectively, by understanding industry trends and what top talent wants

3. Enhanced employee engagement:

It doesn’t end with just securing top talent!

To drive the wagon called organizational success, the organization must put employee satisfaction and engagement at the forefront.

People analytics provide insights into employee sentiment, preferences, and performance. This thereby allows organizations to tailor initiatives and interventions to boost engagement accordingly.

4. Overall improvement in organizational performance:

The bottom line for all businesses is to enhance organizational performance. By utilizing data insights, organizations can identify areas for improvement, optimize processes, and enhance overall performance.

5. Decreased turnover rates:

Fishing for top talent is challenging for recruiters in itself, but ensuring they don’t slip away after securing them is even harder! People analytics helps organizations identify factors contributing to high turnover and attrition rates.

This includes factors such as low employee satisfaction or ineffective management practices, enabling targeted interventions to reduce turnover.

6. Time-saving:

The second thing organizations cannot let slip by like top talent? TIME!

Through the automation of data collection and analysis processes, as well as more effective decision-making, people analytics saves time and resources.

This allows HR teams to focus on strategic initiatives and value-added activities.

7. Effective workforce planning:

The bottom line being organizational success is directly dependent on effective workforce planning.

By analyzing historical data and trends, organizations can forecast future talent needs, and proactively address skills gaps. They can  also ensure they have the right talent in place to meet business objectives.

8. Effective diversity hiring:

Imagine, 50% of HR executives use people analytics to assess and improve the diversity of candidate pools.

It helps organizations improve diversity hiring by identifying biases in recruitment processes, tracking diversity metrics, and implementing targeted strategies.

This essentially enables them to attract and retain diverse talent, ultimately fostering a more inclusive workplace culture.

HR team using people analytics to hire top talent

What does people analytics involve?

At its core, people analytics involves collecting and analyzing data, and then acting upon those insights through data-driven decision-making

It involves:

1. Data collection:

This step involves gathering data (ethically) from various sources such as surveys, analytics tools, and interviews, etc.

For instance, to understand its workforce better, companies may collect quantitative data such as employee demographics or job performance metrics.

They may also collect qualitative data from interview feedback, or surveys to contribute to a comprehensive analysis of the same.

It’s important to collect relevant and accurate data to ensure meaningful analysis of key metrics and insights into overall organizational performance.

2. Data analysis:

Once the data is collected, the next step is to analyze it to uncover insights. This process involves transforming raw data into meaningful information

Let us take the example of an organization that is collecting data on employee performance.

Data analysis would involve identifying top performers, correlating workload, training and skills with overall performance, examining trends in productivity over time, etc. 

Clarity on what to look for and why is crucial to ensure the analysis is focused and valuable.

3. Utilizing insights:

After analyzing the data, the insights gained need to be effectively utilized. 

This requires clarity of goals and understanding of how the insights can be applied to improve decision-making and achieve organizational objectives.

To illustrate, let’s say after thoroughly analyzing the data collected, it is inferred that recently promoted employees showcase higher levels of productivity.

In this case, the management can strategically assign leadership roles to them, offer mentorship and training programs to further enable them to thrive in their new roles. 

To further understand what people analytics actually involves and to leverage it better, let’s examine its four main types:

  1. Descriptive analytics: Focuses on understanding “what happened” by analyzing historical data and trends.
  2. Diagnostic analytics: Goes one step ahead of descriptive analysis and tries to understand the ‘whys’ behind the data, identifying root causes.
  3. Predictive analytics: Utilizes past and present data and insights to forecast future trends and outcomes.
  4. Prescriptive analytics: This is the final step, where data-driven actions based on insights gained from descriptive, diagnostic, and predictive analytics are recommended. 

It ultimately aids organizations in achieving their desired outcomes.

Discussions between HR professionals regarding the applications of people analytics and people analytics metrics

Key people analytics metrics

Without identifying key metrics or understanding why they are essential, people analytics would be a meaningless exercise. 

Different organizations have unique requirements, different metrics they would like to assess, and different challenges they are facing. 

However, here are some key people analytics metrics that are pivotal in comprehending and optimizing various facets of workforce management:

1. Time-to-hire:

Tracking time-to-hire is crucial in a competitive talent market where top candidates are quickly scooped up in slightly over a week. Analyzing this metric enhances not just the quality-of-hire but also helps with timely talent acquisition.

2. Retention/attrition rates:

Understanding retention and attrition patterns is crucial for pinpointing areas of improvement within the organization. 

By analyzing factors contributing to turnover, organizations can implement targeted strategies to significantly improve employee retention.

3. Average promotion interval:

Maintaining an appropriate promotion interval is integral for improving employee morale and motivation. 

Lengthy intervals may lead to dissatisfaction, low employee morale and disengagement among employees. Analyzing this metric helps ensure timely recognition of employee contributions.

4. Absenteeism rates:

Absenteeism serves as an indicator of employee motivation and satisfaction. High rates might indicate underlying issues within the workplace environment or management that require your immediate  attention.

5. Employee satisfaction:

Gauging employee satisfaction is imperative for fostering a positive work environment, enhancing retention and improving productivity and performance

Surveys, and metrics like absenteeism, and turnover rates provide insights into satisfaction levels and aid in identifying areas for improvement.

6. Revenue per employee:

Calculating revenue per employee enables organizations to assess the overall efficiency of the workforce in generating revenue.

Benchmarking against industry standards identifies opportunities for optimization and cost-saving measures.

7. Diversity, equity, and inclusion (DEI) status:

With a growing emphasis on diversity and inclusion in the workplace, tracking DEI metrics is essential for ensuring a diverse and equitable workforce.

Analyzing DEI data helps identify areas of improvement and address unconscious biases in recruitment and promotion processes.

In fact 70% of HR professionals report that people analytics helped achieve their workplace diversity and inclusion goals.

HR professionals applying people analytics for HR operations

 How can people analytics help in hiring top talent?

Through the use of people analytics, organizations have reported an 80% increase in recruiting efficiency, and recruiting efficiency means top talent is not far! 

Self-awareness in this context can be highly beneficial. 

Knowing exactly what areas to track, monitor, and improve upon in your recruitment processes can be a game-changer in your quest to bag top talent! 

Here are some ways people analytics helps in hiring top talent:

1. Providing insights:

All is lost without relevant and accurate insights.

People analytics helps identify key recruitment metrics that provide unparalleled insights into the organization’s hiring operations, facilitating data-driven decisions.

2. Saving time:

Time is everything when it comes to bagging top candidates in recruitment.

Decreasing time-to-hire is crucial, as the longer it takes, the farther away your top candidates get. As mentioned earlier, people analytics automates data management, reporting, and insights, saving valuable recruiting time.

3. Streamlining processes:

Imagine a recruitment process that’s all over the place? No, thank you!

Through actionable insights and their implementation, people analytics improves recruitment efficiency and effectiveness through workflow optimization.

4. Personalizing candidate experience:

Candidate experience reigns supreme in recruitment. The earlier necessary steps are taken to ensure a positive and personalized experience, the better.

People analytics helps tailor recruitment interactions based on candidate preferences and behaviours. For example – almost 60% of candidates abandon their recruitment process owing to long and cumbersome application processes.

With such insights at the organization’s disposal, strategic measures can be taken to avoid losing out on 60% of potential candidates, by simplifying and tailoring application processes. 

For more insights on crafting a 10/10 candidate experience, check out our eBook “A Guide to Exceptional Candidate Experience”.

5. Forecasting hiring needs:

Predicting the future? That’s a superpower we’d love, especially recruiters! What if we told you it’s possible with people analytics?

Predictive hiring assesses a candidate’s potential in future roles by relying on past recruitment data.  Additionally, it utilizes historical data to forecast hiring demands and trends.

This thereby facilitates the streamlining of hiring processes, and enabling data-driven decisions to enhance overall recruitment strategies.

This capability allows organizations to identify recruitment patterns and effectively plan hiring events and meet future talent demands. 

6. Reducing unconscious bias:

Everyone would like to believe that unconscious bias does not impact their recruitment process, but that’s not the case.

By analyzing the demographics and gender of the selected candidates, and other factors, organizations can identify and address areas where bias may be present.

People analytics steps in with hard facts and actionable ways to minimize bias in hiring decisions.

7. Optimizing cost-effectiveness:

Securing a high recruitment budget is tough enough, but making sure every penny counts is even tougher.

Through people analytics, HR professionals can understand where and how much to spend, prioritize, and understand the ROI better.

It identifies cost-effective recruitment strategies and channels for better resource allocation.

Successful hiring with people analytics

Before we wrap up…

The world is saturated with data, and ultimately the onus is on us to leverage it in the right way. 

Knowing what metrics to observe to better understand the indispensable unit of your organization – people – and how to strategize accordingly is what it all ultimately boils down to. 

And people analytics is the key to unlocking these insights!

We wonder how people analytics will further expand in the future and how many more ways we can leverage it? 

For a first step into a data-driven hiring journey, why not consider the global leader in recruitment automation? Book a demo with Zappyhire to learn how data-driven recruitment can be at your fingertips!

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