The Importance Of HR and People Analytics In Business

5 min readSep 7, 2022

For years the Human Resources (HR) Department has been regarded as an old-fashioned, fluffy, fuddy-duddy one, not to mention it is one of the least popular departments in all for any organization. A lot of the work used to be based on gut feeling. Data had to be cobbled from multiple spreadsheets or unwieldy systems to determine the various metrics regarding the workforce. There was also difficulty in quantifying and measuring the success of the HR Department.

Such obstacles have become a thing of the past with the advent of sophisticated, cloud-based analytics tools that help the HR department. Data from these tools allows us to utilize data in a timely and effective manner in order to make better organizational decisions when it comes to its people.

People Analytics

People analytics refers to the data-driven, goal-focused method of studying all people’s processes, functions, challenges, and opportunities at work to elevate these systems and attain achievable success. People analytics also referred to as talent analytics or HR analytics leads to better decision making through the application of statistics and other data interpretation techniques. Smarter, more strategic, data-backed decisions are definitely the way forward to a rewarding journey at all stages of an employee cycle.

How Can People Analytics Help the Business?

People analytics can support the business needs of an organization by providing better insight into learning and development, performance management, and organizational decisions. If people analytics are used effectively, HR departments will be instrumental in improving employee development needs, staff morale, and improving the ROI of the business.

The major advantages of using people analytics are

Makes Acquiring Talent More Effective

Today companies look for candidates who fit the culture of the company rather than someone talented and/or qualified. Candidates’ historical data offers much insight into which candidates fit the existing workforce culture. It also rules out implicit biases that might crop up during the manual selection.


People analytics help in identifying churn patterns using various machine learning algorithms. This helps HR in being proactive and taking the necessary steps. In the same breath, data analytics helps to establish areas of setup, structure, and culture that make the company appealing to employees. Focusing on these factors will help to improve employee engagement, productivity, and retention.

Improved Productivity

People analytics help in identifying the factors that drive productivity. They help in shaping HR strategy, which includes training, performance management, and other related HR policies.


Once the organization has all the performance-related data for employees, it becomes easy to structure the compensation packages.

Employee Satisfaction

The people analytics tools help to gather information using feedback forms, surveys, interviews, performance reviews, customer feedback, and so on to make more informed HR decisions.

Improve Employee Training

Hiring and helping an employee to settle down should not be the only focus of acquiring the best employees in the industry. The culture of the organization should also support the growth of an employee through various training programs. People analytics steps in here to provide the data in order to ascertain the best training programs required for every employee.

Common Data Sources for HR Analytics

Common data sources include internal data like,

  • Demographic employee data
  • Payroll data
  • Social network data
  • Performance data
  • Engagement data
  • External data sources include labor market data, population data, LinkedIn data, and so on.

Process of People Analytics

The people analytics process should follow these nine steps to ensure success in the endeavour.


Develop goals and purposes for the analytics activity. Map the requirements and questions that will need to be answered from the process.

Define the Critical Success Factors

Define the measures which will show if the project has been a success. This could be based on factors such as the impact of the project, feedback from users, and so on.

Data Audit

Map the data that is currently available and grade its quality. This will highlight the gaps in data, if any, and those that need to be filled before progressing further.

Design the Process

Define roles and set objectives for team members.

Design the Data Collection Strategy

Design the collection and processing stages for the analytics activity.

Data Collection

Collect data from all sources. It can be derived from established data sets or running new data collection processes.

Analyse Data

Analyze the data in order to obtain insights in the form of recommendations and guidance for the users of the data.

Report Data

Report in a clear, simple way illustrating solutions if any issues have come up or further areas of the investigation if it is needed.


Review the data analytics data insight process and evaluate its impact. Review and update the process as required.

Choosing the Correct Analytics

While looking to deploy people analytics for an organization, it would come to notice that there are several options in the market, such as those from Microsoft, Tableau, IBM, Salesforce, Oracle, and several others.

While staking out the best fit for any organization, it needs to be borne in mind that the solution provides the organization with a dashboard that works best for the business. It is also important that the data collected can be used by many stakeholders such as the Finance department, HR department, and IT department.

Dashboards that provide smart solutions will allow an analytics manager to pull out the information with graphics and analytics custom reports. Some important features to bear in mind while making a choice are:

System Customization and Scalability

It is important to choose a system that is flexible and allows you to modify the existing work processes.

User-Friendly Interface

The system being chosen should not be too complex, such that employees will not need any training to understand how the system works.

Reliable Support

Before making a choice, it is necessary to check on the reliability and knowledge of the service providers when obtaining technical support.


With the latest people analytics and workforce analytics solutions, organizations can dig deeper into the behavioral aspects of work, understand the cause-effect relationship between different human and non-human aspects at work, and make better decisions.

The three key points to remember here are to know what data needs to be quantified and qualified, to understand the latest trends, and to know what the end goals are.

Utilizing actionable insights from people analytics will definitely position an organization for exceptional growth.




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