People Analytics to Drive Business Performance

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Today… if I had to ask any HR leader on how relevant and important they feel people analytics would be to drive future of HR… in my assessment most of the HR leaders will agree. Data analytics would drive the difference between good and great HR practices.It will determine the value HR adds to business decision making…

I do not doubt how people analytics can change the way HR is seen today in the organization both from positional and value creation perspective. However, it is important for us also to understand what it takes to create a foundation that would help an organization leverage people analytics for business decision making.

If I had to ask the same HR leaders how well equipped they and their teams were to provide robust data on people to CEO and business leaders the answer would be very different.Most organizations today struggle when it comes to providing robust data for taking critical decisions.

  • The answer to this question is not a simple one and would need deliberation on how we as a function have evolved and more importantly the capability within HR. There is no denial that HR has come a long way from being viewed as an Admin or a personnel department in an organization. Today one can see more and more professionally qualified people within the HR fraternity but still there is a long way to go…
  • Second important aspect to help answer this question would be the investments made by an organization in creating HR infrastructure. Any investment in HR infrastructure has a long gestation period and would need long term commitment and buy-in from business leaders. One-off investments and solutions neither create value nor a sustainable business proposition. The best litmus test would be to reflect on how many times HR investments take a back seat when organisations face cost pressures.
  • The third most important aspect would be business leader expectations. Many times what we as HR deliver is a function of short term priorties of business leader/organisation. We deliver what would help business leader solve the problem immediately rather deal with the core issue. The best example that comes to my mind would be retention of key talent. I don’t think I need to explain any further as most of us can relate to this situation.
  • The fourth most important aspect would be how genuinely we as HR leaders have stood for HR decisions & interventions and more importantly how many Business leaders respect and support such an HR leader. Organizations which have both the ingredients have seen HR grow as an independent and strong business support function. These organizations in all probability today stand at the forefront when it comes to the best people practices and also for leveraging people analytics for impacting business decisions.

While the first part of the article focuses on what stands between organisations where HR is able to leverage people analytics to drive business performance. The second part of the article focuses on why people analytics is a mean to an end and not an end in itself.

Yes, this is an interesting aspect as many times leaders feel that having a robust people analytics would assure them desired results. it cannot be true and the simple reason is we are dealing with human beings who behave differently. The same individual may respond differently in the same situation basis context, circumstances and journey of evolution. A simple example would be that all employees within the same experience band do not leave or join an organization for money.

So, the key to effectively leverage people analytics would rely on how organizations gauge the factors that may impact or influence the output or results. To elaborate on this further, I would like to share an example from one of my previous organization. We were a growing organization and were hiring around 600-800 employees a month. While, we were hiring large numbers high attrition made this a the net addition not more than 300-400. Most business leaders attributed low pay as the reason for high attrition. While, simple attrition with some qualitative inputs did support the business hypothesis but detailed analysis within the context of employee demographics and the lack of robustness of the hiring process revealed a very different reason for high attrition. The biggest revelation was that top performers were not leaving but non-performers, wrong hires and reasons other than salary (archaic job titles,

lack of training and performance pressure from 1st Day) topped the list of attrition. While, it did require us to present the data for two years but the meaningful actions plan drawn up post analysis of data did help us solve a big business problem without doing the most obvious of increasing salary.

Hence, it is important to understand that relevance and use of people analytics is a function of multiple factors and some of these factors are deep rooted in an organization and needs to be dealt with before jumping the band wagon of using people analytics for decision making. Even if an organization has overcome many of these challenges availability of robust data and drawing implication from this data continues to be a key concern with many organizations as we are still dealing with a human beings who is supposed to be rational most of the times but may not be rational all the times!

Honestly, people analytics is a journey and very few organizations today have evolved to truly leverage people analytics while most of us are evolving as the data analytics has become a new business reality for HR.


Author- Nitin Nahata has over 14 years of experience in Human Resources and currently he is working with Tata Global Beverages as Director- HR since last 3 years almost. Prior to joining Tata Group, he has worked with Lodha Group as Senior Vice President –Human Resources and previously also worked for companies like HSBC Bank, Standard Chartered Bank and Wipro e-Peripherals. Nitin earned MA-Human Resources from TISS in 2003.

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