Organisations today are relying more and more on data-driven insights to make strategic decisions. By using people analytics, organisations can gain valuable insights into their workforce and make decisions that have a direct impact on their bottom line. However, the process of adopting people analytics can be daunting for many organisations. This blog post will discuss some of the challenges organisations face in adoption people analytics and how to address them.
Creating the Right Culture
The first step in adopting people analytics is to create a data-driven culture within the organisation. This means that all stakeholders must be on board with using analytics to inform decision-making. It actually be confronting seeing your people metrics for your team for the first time. This may result in a defensive reaction. The stakeholders need to operate with a "we are all in this together" mindset. This may require training and education on how to interpret the results, and how it can lead to better decisions which will ultimately improve the outcome of the business.
Data Quality
Another challenge organisations must face is ensuring that the data they are collecting is accurate and up-to-date. Data quality is essential when it comes to making informed decisions based on data, so organisations must ensure that they are collecting reliable information and that they have systems in place to clean up any discrepancies or inaccuracies in the data before it is used for decision-making purposes. As organisations realise benefits from people analytics, naturally there is a desire to improve data quality or expand the data points collected as stakeholders start to see the benefits. Do not however wait for perfect data. You can start your journey even with imperfect data.
Integration With Systems
Organisations must also ensure that their analytics systems are properly integrated with other systems within their organisation. This includes any human resources (HR) systems, financial reporting software, productivity software or communication tools. Without proper integration between these systems, organisations will not be able to effectively leverage their data for decision-making purposes. This is typically a significant engineering job.
Data Governance (Privacy, Security & Ethics)
Employee data contains very personal and sensitive information such as income, ethnicity and medical history. Adopting people analytics also requires strong governance protocols such as privacy policies, security measures, and ethical guidelines for using data responsibly. Organisations must ensure that they have robust protocols in place to protect employee data while still allowing them access to the information they need to make informed decisions about the workforce. This includes determining who within the organisation should have access to this information.
Determining which Metrics to Measure
There are 100s of metrics that organisations could track with people analytics. There are a number of considerations including:
- which metric is the most important for the organisation?
- is the metric a lagging or leading indicator?
- is the metric relevant to all teams?
Ensure all stakeholders are engaged and aligned on determining which metrics to measure.
Communicating Insights Effectively
Once organisations have collected reliable data and identified meaningful trends from it, they must then communicate those insights effectively both internally (to stakeholders) and externally (to customers). Being able to explain complex analytical concepts in a way that resonates with your audience will enable you to make effective changes based on your findings from people analytics initiatives. Insights need to be connected with organisational outcomes.
Meaningless insight: Employee turnover is 25% this year
Meaningful insight: Employee turnover has increased by 3% to 25% this year. This was driven by regrettable hires in the NZ team due to having inexperienced interviewers. This has cost the business an additional $3m in turnover costs. Our goal is to decrease turnover by 3% next year by providing training for interviewers in that market.
Addressing Bias & Change Management
Finally, when making strategic decisions based on people analytics initiatives, it’s important for companies to identify any potential biases or assumptions made by those involved in interpreting or analysing the data so they can adjust accordingly if needed. Additionally, change management strategies should be put in place prior to rolling out any large changes based on analytical findings so employees understand what’s expected of them going forward and why these changes are being implemented in the first place.
Access to the Right Resources
The resources required (data engineers and data scientists) to deliver people analytics programmes are often in short supply and expensive. They are also prioritised into other parts of the business such as customer and marketing. In order to deliver this capability, organisations need dedicated teams and resources to ensure the focus is there to deliver this programme. If not, look for external vendors who have streamlined the data collection and integration for you already.
Summary
Adopting people analytics has numerous benefits but also poses unique challenges for many organisations due its complexity and ever-evolving nature. Creating a culture of trust around using analytic tools responsibly is essential for success; equally important is having robust protocols for protecting employee privacy while still allowing access where necessary; integrating systems; measuring key metrics; communicating insights effectively; addressing bias; and accessing the right resources are all critical components of successful adoption of people analytics initiatives. With careful planning and thoughtful execution though, these challenges can be overcome with meaningful results.