People Analytics Strategy: Building the Right Foundation

Engaged Team

When it comes to leading an organization, 2020 was a year unlike any other. The shifting demands of a global pandemic, mass migrations to remote work, not to mention political and social unrest, all challenged even the strongest of organizations. Critical decisions had to be made almost daily to keep up with new regulations, employee expectations, and harsh new business realities.

So, how did some of the best companies make leadership decisions during these trying times? Increasingly, they looked for support through people analytics.

At its simplest, people analytics involves using data to better understand your workforce and to improve the quality (and speed) of organizational decisions. A strong people analytics strategy organizes and leverages data to reduce uncertainty and help decisionmakers select the best paths forward. The ultimate value from people analytics is when it is used to generate reasonable predictions about the future.

A robust People Analytics program relies on three core elements:

  1. A multi-disciplinary team to lead and manage the process and to oversee the strategy (the “who” and “why” questions);
  2. Constructing and maintaining the technical details of gathering, storing, securing, cleaning, and accessing the data (the “what” and “when” questions);
  3. A well-designed people analytics strategy to analyze and use the data to derive maximum value for the organization (the “how” question). 

This article will focus on this third element of “how” to build the right people analytics strategy.

Embracing People Analytics

While the potential benefits of people analytics are numerous, the ultimate value can only be as good as the quality of the data sources used as inputs. The model below outlines the key data categories to be considered when creating a robust people analytics strategy. To unlock powerful predictive insights, a strategy should be built on a solid foundation of employee demographic data, employee experience data, and operational outcome data.

Demographic Data

Employee demographic data refers to descriptive information about your employee population. What do you already know? Age, gender, tenure, manager status, educational background, performance ratings, exemption status, etc. Most demographic items are best captured when an employee is first hired and onboarded, though employee profile surveys can also be used to help update and expand demographic fields. The potential fields are virtually limitless.

During 2020, with the growing national conversation on diversity, equity, and inclusion, we saw an increase in organizations capturing ethnicity data and an expansion of gender categories to better support DEI efforts. Robust employee demographic data helps create a broad foundation for deeper analysis when combined with other datasets.

Employee Experience (EX) Data

Employee experience (or EX) data refers to the perceptions, attitudes, and beliefs that an employee forms directly from their experience working for an organization. This data is constantly changing and requires a measurement strategy that captures perceptions frequently and appropriately across the employee lifecycle.

DecisionWise helps collect EX data via employee lifecycle surveys, annual anchor surveys (engagement surveys), anniversary surveys, and 360 feedback assessments. EX data helps an organization understand the experience they are creating for employees across a myriad of planned and unplanned moments.

Outcome Data

This category includes anything that is tracked as part of your organization’s operational metrics. This includes traditional HR operational data such as attrition numbers, as well as non-HR data like sales or production metrics. Often these outcome items are the areas that you will be using people analytics to solve for later.

Interestingly, outcome data is often a limiting factor in a people analytics strategy. Why? Because human resource teams frequently do not have access to (or do not seek out) data sets outside of HR. I have worked with hundreds of HR teams over the last ten years and I am continually surprised how many organizations keep their “HR data” and their “operational data” in separate silos. This is why we strongly encourage HR leaders to help build a multi-disciplinary team to work on their people analytics initiatives.  All outcome metrics (and corresponding human custodians) should be sought out as potential inputs for people analytics and the team. 

Insights & Predictions

The ultimate goal of a people analytics strategy is to unlock insights and predictions that are useful to the organization. These insights are derived by combining and analyzing an organization’s demographic, EX, and outcome data. Some insights may become apparent simply by slicing EX data by a few demographics. For example, an engagement survey with demographic detail might reveal that female managers in a company’s Northeast region are feeling overworked. Other insights and predictions may require advanced statistical analysis to reveal. For example, correlating the impact manager 1:1’s is having on customer churn, or how a training program is impacting clinical outcomes within a healthcare organization.

Leadership workshop in the office

In many ways, the Human Resources function is still seeking to find its strategic voice within the organization. A strong people analytics strategy that leverages robust demographic, EX, and outcome data not only gives HR the tools to create a world class experience for employees, it also provides the insights and predictions to help HR inform business outcomes throughout the organization. The case is becoming increasingly strong for companies to organize and analyze their data to increase their understanding, to make data-driven decisions, and to leverage people analytics to improve the quality of their thinking.

Podcast: Organizational Network Analysis – Tapping Into Your Hidden Influencers

Hidden influencers are those with personal power, but not necessarily positional power. Other employees are drawn to them due to their expertise, influence, and role modeling. These informal influencers are crucial for engagement, information flow, decision-making, best practice transfer, institutional knowledge, mentoring, and retention.

Correctly identifying and engaging hidden influencers is one of the greatest levers leaders have to increase organization-wide engagement. Learn how to do it in this insightful conversation between Beth Wilkins, Ph. D., Christian Nielson, MBA, and host Justin Warner.

 


Resources:

4 Reasons Why Employee Retention Is a Challenge in 2019

Employee Retention

“Back in the day we used to walk to work, in the snow, uphill, both ways!” Yeah, we’ve all heard it before. The older generation in the workforce had it much rougher than we do today, right? For the most part I would say that’s pretty much true. I look at my father who started his career in the early-70s in a steel mill and maintained the same job, in the same small town, most of his life. Like my father, it was fairly common for workers in the 20th century to work for the same company most of their careers according to a Stanford Center on Longevity study. Employee turnover wasn’t as big of an issue.

Download Employee Value Proposition survey sample and report.

Today the average worker’s tenure is just 4.4 years, according to data from the U.S. Bureau of Labor Statistics with expected tenure of the workforce’s youngest employees at about half that. The average cost of replacing an employee amounts to just over 20 percent of the person’s annual salary according to the Center for American Progress. That can mean millions of dollars for some organizations. So why does employee retention seem to be getting worse?

Here are four reasons why employee retention is becoming more challenging

1. Strong Economy

Employee Retention

The US economy is hot, and isn’t showing signs of cooling off. That’s a good thing right? Unless you’re trying to hire and retain good talent. The economy is growing and the CBO expects GDP growth of 2.3% in 2019. In May of 2018, job openings exceeded hires. There are more jobs available than can be currently filled, according to the US Department of Labor. Quit rates are also increasing accordingly as workers are finding better opportunities in a better economy. With unemployment rates falling and job opportunities increasing, the power is shifting out of the hands of the employer and into the hands of the employee. Organizations can no longer assume that people NEED them. Top talent will go wherever they choose and with whomever offers them the best fit culturally and financially.

2. Changing Workforce

Millennials, it’s always about those darned Millennials, right? Millennials (adults ages 18 to 34) recently became the largest generation in US Workforce.

Ninety-one percent of Millennials expect to stay in a job for less than three years, according to the Future Workplace “Multiple Generations @ Work” survey. Younger workers historically have lower tenure rates and are more willing to bounce from job to job. Most younger workers are more mobile with less obligations holding them down. Many aren’t married, don’t have kids, and don’t own a house yet. This frees them up to try new things and live in new places. They are also looking for growth opportunities early in their careers to set them up for success in the future. Younger workers also tend to job-hop more than older workers as a means to quicker career advancement. Now that they comprise the largest segment of the workforce, expect to see the overall tenure rate to fall.

3. Technology

smartphone user

Technology makes it easier for people to instantly find and apply for new job opportunities. A few decades ago workers turned to the want ads in newspapers to find jobs. Hot jobs included titles like typists, switchboard operators, mimeograph repair technicians (what?), keypunchers (Doesn’t everyone punch keys nowadays?), and elevator operators. Newspapers even had separate job listings for men and women. Today’s available jobs sound more like Web Developer, Content Marketing Manager, or Search Engine Optimization Specialist. Job seekers no longer turn to newspapers. They turn to the Internet and sites like Indeed, Monster, Glassdoor, and LinkedIn. Qualified job seekers don’t even have to seek nowadays. They can sit back and receive email or text alerts for available jobs that might fit their skill set or interests. Madness I tell you! Employees can browse job sites directly on their smartphones during lunch hour, in the break room, bathroom, or at their desks.

4. Side Incomes

Making money in your pajamas is the true American Dream, right? Non-traditional side incomes are ending the nine to five job where employees once made the slow climb in a company as the once accepted career path. Freelancing and self-employment are ways that modern-day workers are pulling in extra money or even a creating a full-time living. People can now start a business at the drop of a hat and at little cost. Bloggers, YouTubers, Esty’preneurs, and more are setting up shop and producing content online pulling in viewers, customers, and advertisers galore.  According to Craftcount, the successful Etsy shop, ThinkPinkBows, an online shop selling baby hair and clothes accessories, brings in $2 million in sales. Many people are waiting to leave the traditional workforce as soon as their online side-business can replace their income. It’s the American Dream served up on your personal computer in your very own living room.

What can organizations do to improve employee retention?

team employee experience

Now, more than ever, organizations need to focus on the overall Employee Experience. The Employee Experience consists of all of the experiences an employee has, that become pivot points or moments of truth. These experiences shape an employee’s beliefs about the company, its leaders, the brand, and the employee’s overall success in the organization. Consider these questions: 

  • Does your hiring experience excite applicants or does it require them to jump through a series of “hoops” where they feel lucky if they receive any communication from HR.
  • When new employees are on-boarded, do they feel prepared to be successful or are they thrown into the pool to learn how to swim?
  • Are employees excited and energized as a result of performance reviews or do they dread the process?
  • Can your employees become engaged by their work and the mission and values of your organization or are they working for the weekend?
  • Are you using people analytics to understand how your Employee Experience is impacting your business metrics?

Start by finding out how these experiences are perceived by your employees and take the steps needed to improve employee turnover. Become forward thinking. Similar to those in academia who embraced mobile devices and integrated them into the learning process rather than banning devices.  The current job market is in a similar situation. What got you here, will not get you there.

Employee Engagement Survey

4 Reasons Why Employee Retention Is a Challenge

Employee Retention

“Back in the day we used to walk to work, in the snow, uphill, both ways!” Yeah, we’ve all heard it before. The older generation in the workforce had it much rougher than we do today, right? For the most part I would say that’s pretty much true. I look at my father who started his career in the early-70s in a steel mill and maintained the same job, in the same small town, most of his life. Like my father, it was fairly common for workers in the 20th century to work for the same company most of their careers according to a Stanford Center on Longevity study. Employee turnover wasn’t as big of an issue.

Download Employee Value Proposition survey sample and report.

Today the average worker’s tenure is just 4.4 years, according to data from the U.S. Bureau of Labor Statistics with expected tenure of the workforce’s youngest employees at about half that. The average cost of replacing an employee amounts to just over 20 percent of the person’s annual salary according to the Center for American Progress. That can mean millions of dollars for some organizations. So why does employee retention seem to be getting worse?

Here are four reasons why employee retention is becoming more challenging

1. Strong Economy

Employee Retention
The US economy is hot, and isn’t showing signs of cooling off. That’s a good thing right? Unless you’re trying to hire and retain good talent. The economy is growing and Forbes expect an even stronger economy in 2018.

In May of 2017, job openings exceeded hires, meaning there are more jobs available than can be currently filled, according to the US Department of Labor. Quit rates are also increasing accordingly as workers are finding better opportunities in a better economy. With unemployment rates falling and job opportunities increasing, the power is shifting out of the hands of the employer and into the hands of the employee. Organizations can no longer assume that people NEED them. Top talent will go wherever they choose and with whomever offers them the best fit culturally and financially.

2.Changing Workforce

Millenials, it’s always about those darned Millenials, right? Millennials (adults ages 18 to 34) recently became the largest generation in US Workforce.
Ninety-one percent of Millennials expect to stay in a job for less than three years, according to the Future Workplace “Multiple Generations @ Work” survey.

Younger workers historically have lower tenure rates and are more willing to bounce from job to job. Most younger workers are more mobile with less obligations holding them down. Many aren’t married, don’t have kids, and don’t own a house yet. This frees them up to try new things and live in new places. They are also looking for growth opportunities early in their careers to set them up for success in the future. Younger workers also tend to job-hop more than older workers as a means to quicker career advancement. Now that they comprise the largest segment of the workforce, expect to see the overall tenure rate to fall.

3. Technology

Technology makes it easier for people to instantly find and apply for new job opportunities. A few decades ago workers turned to the want ads in newspapers to find jobs. Hot jobs included titles like typists, switchboard operators, mimeograph repair technicians (what?), keypunchers (Doesn’t everyone punch keys nowadays?), and elevator operators. Newspapers even had separate job listings for men and women.

smartphone user

Today’s available jobs sound more like Web Developer, Content Marketing Manager, or Search Engine Optimization Specialist. Job seekers no longer turn to newspapers. They turn to the Internet and sites like Indeed, Monster, Glassdoor, and LinkedIn. Qualified job seekers don’t even have to seek nowadays. They can sit back and receive email or text alerts for available jobs that might fit their skill set or interests. Madness I tell you! Employees can browse job sites directly on their smartphones during lunch hour, in the break room, bathroom, or at their desks.

4. Side Incomes

Making money in your pajamas is the true American Dream, right? Non-traditional side incomes are ending the nine to five job where employees once made the slow climb in a company as the once accepted career path. Freelancing and self-employment are ways that modern-day workers are pulling in extra money or even a creating a full time living. People can now start a business at the drop of a hat and at little cost. Bloggers, YouTubers, Esty’preneurs, and more are setting up shop and producing content online pulling in viewers, customers, and advertisers galore. Shay Carl’s family YouTube channel brings in over $1 million per year by simply filming and posting daily videos of their family’s life. According to Craftcount, the successful Etsy shop, ThinkPinkBows, an online shop selling baby hair and clothes accessories, brings in $2 million in sales. Many people are waiting to leave the traditional workforce as soon as their online side-business can replace their income. It’s the American Dream served up on your personal computer in your very own living room.

What can organizations do to improve employee retention?

Now, more than ever, organizations need to focus on the overall Employee Experience. The Employee Experience consists of all of the experiences an employee has, whether predicted or not, that become pivot points or moments of truth. These experiences shape an employee’s beliefs about the company, its leaders, the brand, and the employee’s overall success in the organization. Consider these questions: team employee experience

  • Does your hiring experience excite applicants or does it require them to jump through a series of “hoops” where they feel lucky if they receive any communication from HR.
  • When new employees are on-boarded, do they feel prepared to be successful or are they thrown into the pool to learn how to swim?
  • Are employees excited and energized as a result of performance reviews or do they dread the process?
  • Are your employees engaged by their work and the mission and values of your organization or are they working for the weekend?
  • Are you using people analytics to understand how your Employee Experience is impacting your business metrics?

Start by finding out how these experiences are perceived by your employees and take the steps needed to improve. Become forward thinking, similar to those in academia who embraced mobile devices and integrated them into the learning process rather than banning devices. They understood it would require additional preparation to make class time more interactive and interesting so as not to compete for attention with mobile devices.  The current job market is in a similar situation. What got you here, will not get you there.

Employee Engagement Survey