In a 2013 Bloomberg Businessweek article, Ben Waber defines people analytics like this:
“When we use data to uncover the workplace behaviors that make people effective, happy, creative, experts, leaders, followers, early adopters, and so on, we are using ‘people analytics.’”
What’s Big Data Got to do With People Analytics?
Essentially, people analytics is the practice of employing “big data” to identify trends and patterns in employee effectiveness, productivity, and motivation or engagement. In order to understand people analytics and how it is used in the workplace, we first have to gain an understanding of “big data.” In our technological age, big data and people analytics go hand in hand. To use an agricultural metaphor, “big data” is the raw material harvested from the field.
People analytics is the process by which the raw material is manipulated and refined in order to be put to use. Employers collect data from a variety of sources, including social media, metadata, reviews, sales trends, marketing trends, or seasonal data, to name a few. This data can now be processed and displayed in a way that makes understanding and predictions easy to determine, virtually at-a-glance. This process used to be costly and time-consuming, but with more and more information being stored on the internet, analytics software has become an affordable and effective means of business market analysis, as well as analysis of internal concerns such as hiring and firing, retention, and training effectiveness.
People analytics analyzes the effects of changes in the workplace among employees. Through the application of data science as described in this article from Forbes, people analytics takes the raw data and boils it down into useful numbers that identify positive sales trends and seek to replicate the conditions surrounding the increase in order to boost profits more consistently and for longer periods of time.
Major corporations such as Pfizer, BP, and Google use analytics tools on a regular basis to inform them on the impact of each interview and hiring decisions that is made. Analytics tools have advanced so far that companies are learning they can’t afford to fall behind on employing them at every level. The results from data analysis can impact company-wide changes right down to changes that affect the individual employee. And the software is usually so reasonable it would be silly not to. However, it’s the employees, the “people” in “people analytics” that employers and HR departments are finding themselves most concerned with.
Bank of America – A People Analytics Success Story
The message is simple. Instead of focusing on hiring the right people, people analytics says that a business can make its current employees into the right people, or, more simply, make adjustments to the day-to-day work life of employees to affect big changes within large companies. One shining example is Bank of America, which for quite some time struggled with high turnover in its call centers. Banking call centers are high-stress work environments to begin with; employees are called upon to deal with between 60-80 calls per day or more, often speaking with customers who are under some degree of stress. Bank of America went to work on this problem using people analytics. They measured performance metrics from different call centers in all of their markets. What they found from their people analytics was that inter-office collaboration had a massive impact on the office culture that was proving to be vital to a reduction in turnover.
In a nutshell, people analytics discovered that in the case of Bank of America, the people to whom employees talked at work was six times more predictive of a lower turnover than any other metric. That’s a whopping statistical significance. So what did Bank of America do? It changed the universal break schedule policy across the board. Prior to this foray into people analytics, the company had asked employees to schedule breaks that wouldn’t overlap with other employees in order to keep more employees on the phones to manage the volume of calls. Based on the results of their people analytics, however, Bank of America revised its policy to allow teams to take breaks together and overlap their lunches. The result was a boost in employee interactions, 23% faster call handling, and $15 million saved that never would have even been noticed if it weren’t for people analytics taking a long, hard look at the big data.
Another huge success story worth mentioning comes from company Nielsen. Ken Steiner writes in his post People Analytics Isn’t as Hard as You Think—Nielsen Proves Why
“Around the same time, Mathur and his team were trying to put hard data behind that very problem after finding that company-wide attrition had been rising. They set out to build a basic model to answer what was causing it… Within months, the team was able to identify the primary drivers of voluntary attrition. Nielsen has since slashed regrettable voluntary attrition by nearly half – which in turn saved them millions of dollars.”
How to Incorporate People Analytics into Your Business
Armed with this knowledge and success stories, many business owners and CEOs will wonder where to go from here. What steps can be implemented to begin incorporating people analytics in your regular business model?
- Get Focused: Start with a known problem, as in the Bank of America example. Look at a particular area of your business that is suffering from errors, high turnover, or productivity issues and focus your study on this area. If you can demonstrate that analytics tools that are less than state-of-the-art are able to return quite a bit of cost-saving feedback, you’ll be able to leverage better tools at a later date.
- Use What You’ve Got: New software, while relatively inexpensive in the long run, can be costly and require some training and installation costs. It’s likely that some analytics are already available with the software you use on a regular basis at work. Start there!
- Use All Resources: If you work in HR you’re used to scrutinizing people, not charts. Reach out to the IT department of your workplace and involve them on the project. They can help show you how to interpret a lot of the information that you may find going over your head.
People Analytics: Small Applications, Big Results
As with the Bank of America example, people analytics often points to small changes that can have a whopping impact on corporate culture as well as the bottom line, and which often cost the company almost nothing to implement, especially once the return is established. People analytics is responsible for research that states what the optimum temperature is for productivity levels in the workplace and how to structure office spaces to boost collaborative, inclusive workspaces rather than isolating environments.
At its core, people analytics is discovering what people know instinctively – human beings are social creatures that crave human interaction. Historically, before big data allowed companies to apply people analytics, businesses structured policies that curbed this human need, enforcing isolation under the assumption that employees could focus better if they were alone with their work and hours of time. People analytics is discovering that the opposite is true. Putting a team of employees around the same break table for just 15 minutes can save a company $15 million. Ask yourself: what can people analytics do for your business?
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