What Are The Pros and Cons of People Analytics?

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People Analytics

People analytics are often defined because of the deeply data-driven and goal-focused method of studying all people’s processes, functions, challenges, and opportunities at work to elevate these systems and achieve sustainable business success. The active use of advanced analytics can improve the way organizations identify, attract, develop, and retain talent dramatically. However, many organizations still make those decisions supported by instinct and intuition. People Analytics will help recruitment managers unlock the facility of data—increasing rigor, reducing bias, and improving performance.

People analytics is usually mentioned as talent analytics or HR analytics also. Essentially, gathering and assessing people analytics results in better decision-making through the appliance of statistics and other data interpretation techniques.

People analytics is helping managers everywhere in making better hiring decisions and improved retention utilizing smarter, strategic, and data-backed talent decisions closer at hand.

People analytics has evolved considerably from when it had been first utilized in organizations within the mid-1900s. Since, there has been a very imminent transition from prescriptive analytics to predictive analytics, with which organizations can now be better prepared to face the dynamism of their operational environment and be proactive instead of reactive. for instance, sophisticated data science, interactive data visualization, and machine learning – all integral parts of individuals analytics today – were nowhere a neighborhood of the method until a couple of decades ago.

Pros Of Using People Analytics:

Employee retention

Mitigating turnover is one of the foremost and proven effective applications of people analytics. The impact is most visible when organizations specialize in a specific role or set of employees. Targeted retention informed by people analytics can significantly reduce turnover rate.

For example, watching the mixture impact of manager turnover reduction, across all our customers with analytics in situ for a minimum of two years, they need reduced manager turnover by 17% compared to the market.

Achieve fair pay

Analyzing compensation practices and optimizing can help organizations achieve fair pay. Companies can use people analytics to assess proposed candidate offers, counter-offer considerations, and promotions. 

This capability allows the team to instantly compare compensation profiles, incentive scores, performance ratings, and attributes of employees to others on an equivalent team or in similar positions. It also provides a competitive advantage when top candidates are considering opportunities from multiple employers or when high performers are considering leaving.


Talent acquisition analytics can help organizations identify attributes that produce long-term, high-performing employees. It can help organizations know where they get their best candidates and whether or not they are losing people within the acquisition funnel.

This enables organizations to optimize spend on recruiting activities and therefore the pipeline of candidates. It also can pinpoint the proper attributes for future candidates to maximize the recruiting investment.

One financial organization was ready to leverage this information to enhance its hiring process. With people analytics, they reviewed their hiring practices by analyzing each hiring manager’s time-to-hire rates and discovered that efficiency was a key indicator of success.

Then, they implemented a uniform hiring process inspired by the success of their efficient hiring managers. Not only did the bank improve their candidate experience, the bank’s new hire retention improved by 14%. This step ensures that each candidate has an equivalent quality and transparency in their hiring experience.

Learning and development

Companies can use people analytics to optimize training modes and sources. Learning analytics that connects the impact of coaching and development on business outcomes enables organizations to ask the proper questions and obtain the proper answers.

Pitney Bowes determines which products their employees have learned the way to use with people analytics. this permits managers to work out whether an employee has completed the proper training before sending them on a trip. 

Increasing diversity

Diversity is often a really powerful thing for businesses. Analytics plays a key role here: from answering questions on the state of diversity throughout a corporation and across its employee lifecycle to identifying areas where intentional or unintentional bias could also be occurring, to helping companies understand the way to effectively address problem areas. People analytics gives organizations more visibility into diversity initiatives.

Cons Of People Analytics:

Data privacy

Obviously, HR teams need to operate within the data privacy laws of their country. Here in the UK, unless you’ve been living under a rock, you’ll know that personal employee data comes under GDPR – General Data Protection Regulation – which comes into effect in May 2018. GDPR will impact the way HR teams gather, store and work with employee data.

Companies that fail to properly protect employees’ personal data, or are found to be misusing personal data, face stiff fines of up to €20 million or 4% of annual worldwide turnover, whichever is the greater of the two.

Protecting against data breaches

Amidst this harsher regulatory landscape (not to mention the reputational fallout of high-profile data breaches), HR data must be properly secured and protected from threats. If you think that no one would be interested in stealing your employee-related data (as opposed to, say, customer credit card details), think again. It may surprise you to know that medical data is 10 times more valuable to criminals than credit card data. So the lesson is: if it contains personally identifiable information, data of any kind can be valuable.

Understanding the ethical pitfalls

As well as sitting on the right side of the law, HR teams also need to ensure their data usage sits within the company’s ethical boundaries. Most companies these days emphasize a culture of openness and honesty. If your data-driven HR activities fly in the face of that culture – for example, by clumsily implementing data projects or poorly communicating how data is used – it could lead to massive morale and trust issues.

That’s why one of the key pieces of advice I give to businesses is this: transparency. Transparency around what employee data is being collected, transparency around why it’s being collected, and transparency around how it will be used.

It’s also important to add value for employees and emphasize the positive outcomes of using their data. People are far happier for their data to be used when they feel they’re getting something valuable in return, whether it’s better working conditions, more effective management, a safer environment, or whatever.

Good Governance

Practicing good data governance will help ensure your HR data remains a valuable asset and doesn’t turn into a liability. Here’s a snapshot of what good data governance means in practice:

  • Create data governance procedures (if you haven’t already).
  • Get consent for employee data.
  • Be strict about data usage.
  • Practice data minimization
  • Anonymise data
  • Protect and secure your data

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