People Strategy

How to Get Started With People Analytics

June 1, 2021
November 7, 2023
Deanna deBara
Lattice Team

As an HR leader, it’s your job to support the people within your organization, whether that’s through creating more effective hiring processes, building a supportive and inclusive company culture, or rolling out initiatives that help to engage your team.

But in order to do that, you need the right information. And the best way to get that data is through people analytics.

People analytics can help deliver the insights you need to build better teams, improve your corporate culture, and support your employees. Below, we’ll take a closer look at what people analytics is, the benefits it can bring to your team and organization, and how to get started using this game-changing tool.

What Is People Analytics — and What Are the Benefits?

There was a time when HR leaders had to make decisions based solely on their own thoughts and observations — like hiring someone they think is going to be a top performer or a great fit for the company culture. But thoughts and observations can be unreliable and biased, and lead to decisions that aren’t always in the best interests of the employee, the team, or the organization as a whole.

That’s where people analytics comes in.

“People analytics refers to the use of data and analytics by organizations to make decisions about their employees,” explained Matthew Spencer, cofounder and CEO of AI-powered recruiting network Suited. “Historically, organizations made decisions about talent based on the instinct, intuition, or gut feel of the decision maker, which can be fraught with misperception, personal biases, and inconsistencies across the organization, potentially leading to poor and inequitable outcomes.

“Data-driven decision-making, when used properly and with the right data, leads to better outcomes across the spectrum of talent management within a company,” he continued.

People analytics can benefit a number of HR functions within the company, starting with talent recruitment and retention.

“People analytics can be used by organizations to better obtain, train, and retain talent,” Spencer said. “They can ensure the best people are being hired, help companies get the most out of their teams, and ensure they see a return on the sizable investments they make in human capital through increased retention.”

People analytics can also deliver “a better understanding of what drives performance and results across the organization…[and] reduce costs and inefficiencies by avoiding costly mistakes and increase organizational performance by ensuring the best outcomes,” Spencer noted.

Bottom line: People analytics can be a major benefit to your HR department. Here’s how to get started.

1. Define your goals.

If you want people analytics to improve your organization, you need to know specifically how you want your organization to be better. Therefore, the first thing you’ll want to do when getting started with people analytics is to define exactly what you want to get out of it.

“The first step is to define the goals and outcomes that the organization hopes to accomplish by using people analytics,” Spencer advised. “This will provide guidance on what type of data is needed, and can give insights into how and when it should be collected.”

For example, if you want to leverage people analytics to drive employee engagement, that’s going to require a different strategy than if you wanted to use people analytics to measure the financial impact of an employee wellness program, or identify drains on team productivity. Before you build your people analytics strategy, you need to know where you ultimately want that strategy to take you.

Being crystal clear on your goals and objectives will ensure that your people analytics strategy delivers the data you need to get the results and outcomes you want — so make sure to take the time to define those goals and objectives from the get-go. 

2. Use the right tools.

Once you have a clear idea of what you’re trying to accomplish with people analytics, it’s time to figure out how to implement people analytics within your organization.

While you might be tempted to start collecting and analyzing data yourself, unless you have a team of data scientists and analysts at your disposal, you’re going to need some help in the form of the right people analytics tool.

“Most companies do not have the type of technology, level of expertise, or availability of data to maximize their use of people analytics on their own,” said Spencer. “Any dollars spent working with the right tools...will return themselves in multiples through superior outcomes.”

The “right” people analytics tool is going to depend on your goals. For instance, if you’re looking to get the data you need to increase engagement, you’ll want a people analytics tool that measures key engagement drivers. If you want to leverage people analytics to overhaul your hiring practices and build a more diverse team, you’ll need to implement a people analytics tool that collects data throughout the hiring process and allows you to identify where and how you can improve.

Whatever your goal or objective may be, there’s a people analytics tool that can help you hit that goal or objective — it’s just a matter of finding the right one.

“There are a lot of tools...that can help companies quickly and meaningfully implement people analytics, and selecting the right ones will have a dramatic impact on the success or failure of the initiative,” Spencer said.

3. Get buy-in from leadership.

People analytics is a powerful resource for HR leaders. But in order to leverage people analytics to create lasting change within your organization, you need to get your CEO and leadership team on board.

Many leadership teams love data, which, fortunately, can make people analytics an easier sell than other HR initiatives. But if you want leadership behind you, you need to figure out the best way to leverage people analytics to help both the HR and leadership teams hit their goals.

“HR leaders should always start their people analytics initiative by working with management to identify the top three to five workforce questions [or] issues that are important to the organization,” advised Jeff Higgins, CEO of HCMI, a Silicon Beach-based company that offers workforce analytics services and software.

From there, you can develop a people analytics strategy that will deliver the data you need to address those questions or issues, and implement HR initiatives that are going to drive the kind of results your leadership team is looking for.

For instance, say leadership is concerned with the level of employee absenteeism. You might use people analytics to explore the connection between employee engagement and absenteeism, and when you find the two are connected, implement strategies to improve employee engagement and lower absenteeism.

If you want to obtain executive buy-in, you should also be prepared to articulate the benefits of people analytics in a way that speaks to your leadership team and addresses their priorities and concerns. “Be ready to show the ROI and impact on business results,” Higgins urged.

4. Use people analytics to create a more diverse, inclusive, and equitable workplace.

As mentioned, there are a lot of ways you can use people analytics. But if you really want to get the most out of the data, leverage people analytics to create a more diverse, inclusive, and equitable workplace.

“Make diversity, equity, and inclusion a key component of the effort,” Spencer said. “This is an opportunity to identify and remove inequities in talent processes, while simultaneously driving better results.”

People analytics can deliver the data you need to create a more equitable compensation structure, hire (and retain) more diverse candidates, and make sure your company culture is one of inclusion for all employees. For example, through people analytics, you may learn that only 10% of the leadership positions in your organization are held by women — information you could use to revamp your hiring and promotion processes and get more women into leadership roles.

One of the greatest benefits people analytics can offer is an opportunity to create a more diverse, inclusive, and equitable workplace. As an HR leader, it’s essential that you’re capitalizing on that opportunity from the very start.

People analytics has the potential to transform the way you make decisions in HR for the better. With the right data, you can more effectively identify issues, evaluate employees and initiatives, and develop solutions that best serve your team. Using these key tips, you can start to implement people analytics on your team — and improve your entire organization in the process.