What Is People Analytics?

People analytics refers to the study of what people do—the processes, functions, and systems at play in a company. Human labor is an essential resource for every company, and, just like any resource, it’s important to keep an eye on how effectively your resources function. 

You can divide people analytics into seven pillars: organizational culture, talent management, leadership, workforce planning, learning and development, performance management, and employee engagement. Examining the analytics of each of these areas can help you make improved, more strategic decisions based on data. 

What does people analytics mean?

People analytics, also known as workforce data or labor data, helps you understand how effectively your current labor force is operating. For example, you might be curious about your turnover rate or how much it costs to onboard a new employee. You can find the answers to these questions using people analytics. 

People analytics typically relies on data collected from human resources. Using the same analytic tools as those used to collect financial or sales data, human resource professionals track information related to retention rates, pay equity, the costs of employee turnover, and more. 

What is the goal of people analytics?

People analytics aims to help businesses gain insight into their workforce to make data-based decisions. Depending on the needs of your business, people analytics can help you find and retain the best talent, increase your employee’s engagement, and keep a closer watch on labor costs. But people analytics are more than just numbers. Human resources professionals can also use people analytics to understand why certain things happen. For example, people analytics can help you understand why your turnover rate is higher than usual and may offer insight into how to improve the situation. 

What are the 7 pillars of people analytics?

Jean-Paul Isson and Jesse S. Harriott defined the concept of organizing people analytics into seven pillars in their 2016 book People Analytics in the Era of Big Data. The seven pillars of people analytics create a framework for thinking about and working with human behavior in the workforce. People analytics is a broad category encompassing many potential types of data. The seven pillars help sort data into seven categories to make it easier to work with the numbers and see connections between different kinds of information. 

1. Workforce planning

Companies need a workforce, and workforce planning helps you determine the people and skills your company needs to operate. Workforce planning data can help you understand when you’ll need to make new hires and what skills they need to meet your company's goals. Workforce planning people analytics can also help you employ the correct number of employees and make efficient decisions about labor costs. 

2. Talent sourcing

Talent sourcing is about locating skilled workers who fit your employment needs. These analytics can give you insight into which recruitment methods will be successful for finding skilled applicants, pre-screening applicants before reaching out, and the best way to contact potential employees to learn more about them. 

Finding the right employees can help you save a lot of time and money compared to the time and resources spent onboarding an employee that doesn’t work out in the long run. Talent sourcing data helps you make informed decisions about the best use of your recruitment capital from the first moments of your job search. 

3. Talent acquisition and hiring

After you’ve located the perfect candidates, you’ll need to attract them to your company and make them a part of the team. The talent acquisition and hiring pillar of people analytics helps you make sense of your interview process, such as determining the best way to reach out to and communicate with candidates, which questions are most effective during the interview process, or even determining tests that can help quickly gauge a candidate’s skill level. Using talent acquisition and hiring data, you can make connections and uncover the metrics that will best help you predict how successful a candidate will be after onboarding. 

4. Onboarding and engagement

Onboarding talent, introducing new employees to the role they will fill, and providing job-specific training provide data to help you determine the best ways to bring new employees into your organization. Within this pillar of data, you can gain additional insight into the skills and limitations of your workforce to develop programming specific to their needs. Learning and development data can also give you insight into which learning methods your employees are the most engaged with. 

Measuring your workforce's engagement provides insight into your company culture and how your employees fit in and contribute to organizational culture. Onboarding and engagement analytics help you understand which engagement campaigns inspire and encourage your employees so you can focus your efforts on programs with a more significant impact. 

For example, if you want to gain insight into how your workforce performs when working from home compared to the office, consider performance metrics, turnover rates, and employee satisfaction scores to make an informed decision about company policies regarding flex time.

5. Performance management

Performance management data refers to the metrics you use to track your employees’ output. Monitoring performance metrics allows you to understand how often your employees are meeting their goals and targets for their work. When you have performance management data, you can have more transparent and fair performance reviews with your employees. When you base promotions and raises on performance metrics, it provides a fairer system for employee compensation based on how well they meet their targets. 

6. Talent attrition and retention

Analytics that speak to talent attrition and retention allow you insight into your employee’s skills and engagement to make decisions about ongoing training or promotions. This type of data can also help you understand why people decide to leave your company and what qualities potential employees are looking for in their future employers. Talent attrition and retention analytics help you discover where training gaps exist and who may benefit from additional instruction. It also enables you to identify strong-performing employees who may be at risk of leaving your company so that you can intervene early and make sure your employees are happy in their current roles. 

7. Employee well-being, health, and safety 

Employee well-being, health, and safety are essential metrics because employees' mental and physical health plays a significant role in their ability to complete their work. Healthy employees are happier, more engaged, and more motivated to work. You can use employee well-being analytics to help tailor wellness efforts to your workforce's specific interests or needs. Successful health and wellness programs can help you build a more supportive workforce and a more robust company culture. 

What are the types of people analytics?

Within each of the seven pillars, you can use four main types of analytics: descriptive, diagnostic, predictive, and prescriptive. These labels describe the type of data you’re collecting and what you can do with them. 

• Descriptive: Descriptive analytics entails observations and initial insight into what’s going on. An example of descriptive analytics might be noticing a pattern, either a positive or negative one, that affects employee performance. 

• Diagnostic: Diagnostic analytics begin with your observations and probe a little deeper into the root cause of the pattern.

• Predictive: Predictive analytics look at possible next steps, such as correcting a problem or encouraging success. Using this analytic method, you can look at what might happen if you implemented your next steps to choose the best path forward. 

• Prescriptive: Prescriptive data uses all of the analytic methods you’ve already used to come to an informed decision on the best way forward. 

Benefits of people analytics

People analytics can help you make more informed decisions in real-time. It empowers you to create a wide range of improvements, such as: 

• Increasing productivity: People analytics help you match the right people with the right responsibilities to maximize output and performance. 

• Attracting top talent: People analytics help you attract qualified applicants by understanding exactly what skills you need and highlighting the most attractive aspects of working for your company. 

• Reducing turnover: People analytics help you understand why people leave your company, giving you the insight you need to adjust company policies accordingly. 

• Powering strategic planning: Robust data provides insight that helps you make smarter decisions, find the root cause of problems, and plan for the future. 

Jobs that use people analytics

If you’re interested in a career helping companies better understand their workforce, consider a job working with people analytics. Generally, these roles fall under the human resources department. Potential job titles to explore include human resources analyst, senior human resources analyst, and compensation and benefits analyst.

Human resources analyst

Average annual salary: $68,292 [1]

Job outlook (projected growth from 2022 to 2032): 6 percent [2]

As a human resources analyst, you will gather and analyze data from HR information systems, employee surveys and interviews, labor statistics, or other sources. You will identify patterns and communicate your findings to company leadership. You may also arrange or conduct staff training and educational development initiatives or help conduct performance reviews.

Senior HR analyst

Average annual salary: $93,835 [3]

Job outlook (projected growth from 2022 to 2032): 5 percent [4]

As a senior human resources analyst, you may do all the same tasks as a human resources analyst but with the additional supervisorial tasks of managing other human resources professionals. You may work directly with data, such as conducting exit interviews or polls, or you may oversee and design the processes for other professionals working with people data. Many employers will expect to see a demonstrated work history in more junior HR roles. 

Compensation and benefits analyst

Average annual salary: $91,019 [5]

Job outlook (projected growth from 2022 to 2032): 6 percent [2]

As a compensation and benefits analyst, you will collect and analyze data pertaining to employee salary and benefits. It will include monitoring trends from labor statistics and understanding the standard expectations for compensation in your industry. In this role, you’ll also work with payroll and companies that benefit your employees, such as health insurance companies. 

What skills do you need for people analytics?

To perform well in a career in people analytics, here are a few of the skills you’ll need: 

• Human resources

• Data analytics

• Project management

• Working with data tools or creating new tools

• Stakeholder management

• Communication

Getting started with Coursera

People analytics can help an organization better understand if their staff is operating efficiently and what they might need to do to improve upon their workforce. If you’re ready to take the next steps and start your career in people analytics, consider the Business Analytics Specialization offered by Wharton University of Pennsylvania on Coursera. You can learn about talent and performance management in as little as six months.