You would like to begin working with data in HR but you’re not sure whether it’s the right moment? In this article, we will answer the key questions about when to start people analytics in your company.
People analytics – often called HR analytics or workforce analytics – is quickly becoming one of the pillars of modern HR. For HR managers, an evidence-based attitude is a step towards making more informed decisions and reducing guesswork in workforce planning and organization.
Some leaders fear though that it’s hard to begin working with data in HR, especially if you start from scratch. Others are not sure when to start working with people analytics and might think their companies are too small to think about implementing it.
In this article, together with an HR business partner and people analytics expert, Mateusz Karpiński, we will answer some of the key questions leaders ask when thinking about people analytics, such as:
1. At which point of the lifecycle of my organization should I start people analytics?
2. Is there a minimum size of the company for which people analytics could bring value?
3. How many people in the team do I need to start people analytics?
4. Do I need an HR analyst to start?
5. Should I have any special tools or systems to start working with people analytics?
6. What are the blockers that I can come up against?
7. My team is working remotely at the moment. Is it the right time to start people analytics?
8. How to start working with people analytics step by step?
Question 1: At which point of the lifecycle of my organization should I start people analytics?
If you employ 40 people, you probably know all of them – their names, faces, functions. You might think you don’t need people analytics in such a small organization. You might have not even hired an HR manager yet.
Most guidelines and recommendations say that a threshold of 120-150 people marks the point of exit from a family or tribe culture to a more corporate culture. With over 100 employees, you’re probably unable to know all of them. You need some numbers to tell you meaningful stories about them – and therefore, you need people analytics.
However, even in smaller organizations, startups, and developing businesses, starting building a data infrastructure makes sense. If your company has a potential to grow, then you might want to collect information about your current workforce because once you scale up, you will have historical records about people who work or worked for you.
It doesn’t mean you have to invest in tools and technology right away. The key is to gather the data about your employees and keep them organized in one place. When you grow, you can think about people analytics software but then you will not have to reconstruct everything from the scratch – you will already have foundations to do that.
If you want to see how people analytics works, sign up for our free demo – regardless of the size of your company.
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Question 2: Is there a minimum size of the company for which people analytics could bring value?
The truth is, people analytics brings value even in small organizations. Even if you employ only 20 people, you can track such HR metrics as:
- Source of hire. Where did these people come from?
- Cost per hire. How much did it cost me to recruit them?
- Time to hire. How much did it take me to fill in these positions?
- Applicants per opening. How many people applied for my job posting?
- Time to onboard. How long did it take before my employees started making a meaningful contribution and reached the optimal productivity?
Identifying that you had 3 candidates for a job from one source, and 5 from another and comparing the quality of those applications is already people analytics! Analyzing who has been working with you for two years, and who left just after three months (and why) is also people analytics.
To make a meaningful change, you need to continue your journey and adopt a certain mindset. The sooner you do it, the more chances you have to succeed.
Question 3: How many people in the team do I need to start people analytics?
One of the best-known data evangelists, and the host of “Random walks in HR”, Tim Peffers,has told us recently that there are companies that successfully started people analytics with teams consisting of just one person. Building a people analytics team is a process – you don’t need to set everything up at once. You can start small, and train your team members in people analytics as you grow.
Question 4: Do I need an HR analyst to start?
Today’s tools – like the HR management software by Human Panel – make analytics easy and accessible to anyone, not just analysts. With visualized data, charts, and graphs, everyone is able to read data, interpret it and draw conclusions. People analytics software brings you automated reports and easy-to-use interfaces.
The truth is, you don’t even need an HR manager to start. You can begin with creating an HR dictionary that everyone can understand and make sure that all leaders and managers use the same definitions and the same metrics for evaluation. These little steps will help you start working with HR data without making large initial spending or hiring a dedicated staff.
With time – and over a certain size – you might want to hire an HR analytics team at some point. However, a lot depends on the problem you want to solve, the goal you want to achieve, and the roles you want to assign to people.
Question 5: Should I have any special tools or systems to start working with people analytics?
You can start your people analytics in spreadsheets or any other system that suits you. The key is to keep data organized and in one place, granting access to all the relevant people. It’s no use storing the information on your hardware, in a hidden folder among other documents.
Of course, there are tools and platforms that make people analytics even easier. If your company has over 120 people, it would be a good idea to try a dedicated solution, like the Human Panel platform. The tool is there to help you but it’s a secondary matter. What’s most important is your data-driven approach to HR. Whether to start people analytics is a business decision – and you should make sure that all key stakeholders support the idea.
Question 6: What are the possible blockers that I can come up against?
Like with every business decision, when trying to make the one about starting people analytics in your company, you can encounter some obstacles. The most common blockers in this case are:
- The mindset of HR leaders or business stakeholders.
- The lack of data literacy in your HR team.
- The questions about data security and your employees’ privacy.
- Legal constraints.
- Ethical limitations.
If you’re afraid that your employees will be reluctant to have the data collected about them, you can always ask them what they think about it. As an employer, you gather personal data anyway – and you agree to use it only for employment purposes, such as recruiting, payroll etc. The research shows that 92% of employees have nothing against gathering data about them if they know what purpose it serves and what possible benefits it can bring. For example, it could bring better-designed career paths, more learning & development opportunities, or more personalized benefits.
If you lack appropriate data literacy skills and competencies in your HR team, you can start by making those small steps we mentioned in sections 3 and 4. If your HR team is willing to learn about people analytics, you can invest in training them.
The greatest challenge
The greatest challenge is changing the mindset. As we stated earlier, people analytics shouldn’t be treated like a “project”. A data-driven approach should be embedded in the company’s DNA, and people you work with need to be willing to work with data.
The best way to convince those who are reluctant is to show them how insights from people analytics work in action. With the right analytics, you can determine, for example, any money leaks in your company’s budget – and how to prevent them from occurring. You might discover that pricey job ads don’t bring you any valuable candidates, and that your best recruitment sources are somewhere else. This helps you save money and show tangible results in just a few weeks.
As for legal and ethical issues, you should obviously move within the legal framework, follow the GDPR policy, and make sure that the data you collect is secure. Then, try to ask yourself a question: is the data I gather crucial for my business? This question can help you judge if the information is truly necessary to collect. Obviously, you should invest in a data protection system to ensure the safety of data.
Question 7: My team is working remotely at the moment. Is it the right time to start people analytics?
The pandemic has reshaped the global talent market and initiated changes that are going to influence recruitment and retention processes for a long time. With global talent shortage, global market, and the rise of new working models, it’s just about time to introduce people analytics to your company.
The research shows that most employees want to continue working remotely to some extent. There is no “going back to the old times” – remote working has become a must for many companies, and an essential factor in being competitive in the marketplace.
Hence, you shouldn’t wait with introducing people analytics for the return to the office. In these unprecedented times, data can guide you and show you the right direction. The sooner you start working with data in HR, the better.
Question 8: How to start working with people analytics – step by step?
We prepared a detailed guide on how to start working with data in HR step by step. You can find it here. And if you have any other questions concerning people analytics, don’t hesitate to contact us at Human Panel. We’ll be happy to help you with getting started!