The 4 Ingredient Categories Your People Analytics Framework Needs to be Effective

The 4 Ingredient Categories Your People Analytics Team Needs to be Effective

“I really must go to the third floor,” Renfield insists over the other employees’ protests. “I’ve been asked to consult with the head of people management about creating an analytics team. They’re expecting me.”

One of the nearby workers grabs Renfield’s lapels and pulls him close. “You don’t understand,” the man says. “We here in the office believe that people management is…” He glances around, nervously, leans closer and whispers, “We believe they’re really… human resources!”

“Oh, that’s just assistants’ gossips,” Renfield says. “Now, really, you must let me through. I have an appointment.”

“Wait!” The office manager pushes through the crowd, waving a form above her head. “If you won’t listen, then take this W-2. It’ll protect you.” She thrusts the form into Renfield’s hand and adds, “It’s riddled with mistakes.”

The third floor is dimly lit, offices still only partially constructed, furniture still draped in plastic. No signs indicate where he should go and a sense of abandonment clings to the scent of still-wet paint. “Hello?” he calls.

A figure appears, the light flickering around them. “I bid you welcome,” they say, and Renfield notices the tappity-tap-tap of many fingers rushing over keyboards. “Listen to them, the collectors of data. What music they make! Come along,” the People Team leader instructs, gliding down the hallway toward a single shaft of light Renfield can swear wasn’t there a moment ago. “Data is the life, Mr. Renfield.”

Wait. Why are you talking about vampires again, Leks?

There is a reason, and I assure you it’s not merely a way to shamelessly shoehorn my side interests into work-related topics. (Mostly.)

For contemporary businesses, data really is the lifeblood of your company. It’s what keeps everything moving from making sure there are paper clips in the supply cabinet to getting your product into the hands of the right user. Without accurate, up-to-date data, your organization isn’t even in the running to be a successful company.

While gathering quality consumer data is essential for the contemporary organization, data analytics has another equally important role to play: people management.

There are four main categories you need to think about for an effective analytics framework: Enablers, Deliverables, Stakeholder Management, and Governance.

In this Process Street post, I’ll explain what they are, how to use them, and how to not be creepy about it. Before you know it, you’ll wonder how you ever made HR decisions before people analytics came along.

Let’s analyze some data!

Will you be an HR hero or an HR hooligan?

Everything each of us does – from what we watch on Netflix to the brand of toothpaste we buy – is logged in at least one database with a host of information on who we are, who we want to be, and who we might become.

For the most part, we accept this as the price we pay for targeted special offers, personalized recommendations, optimizing the self-service purchase process.

Data analytics – or people analytics as it’s more commonly called – is a valuable tool in terms of improving morale and retention, but it can inform decisions in everything from workforce planning to estimating ROI.

That said, all the data in the world is useless if you don’t have an effective framework for processing it.

This is where the vampires come in.

On the one hand, you have Count Orlok. Creepy guy. Hangs out mostly by himself in his castle because no one wants to talk to him. I mean, who even has claws anymore? Sure, we shouldn’t judge a book by its cover, but you have to admit he does play up the spooky, stalker vibe to the nth degree. I think we can all agree that sneaking into your houseguest’s bedroom in the middle of the night is not cool.

Count Orlok VS Count Dracula
(L. Max Schreck as Count Orlok, Nosferatu; R. Bela Lugosi as Count Dracula, Dracula)

Then you have Count Dracula. He’s a little odd, but he’s new to the area, so you can’t really hold that against him. Besides, he’s getting involved in the community, preserving historic buildings, getting to know his neighbors, providing companionship to hospital patients. Plus, he loves animals and is super attentive to all his guests’ wants and needs. He’s just a really polite, well-mannered guy with one or two eccentricities.

While both are extremely interested in learning everything they can about the people around them, they have very different approaches. Orlok gathers this data furtively without their permission or consent; Dracula, however, is all about consent. His priority is keeping everyone comfortable, and being very transparent about his actions. Dracula doesn’t go skulking about in the shadows; no, everyone is completely aware that they’re being observed by him.

As the HR manager in our little drama, who do you want to be? Are you an Orlok or a Dracula? Are you merely draining your employees of their data, or is there a give-and-take to the relationship?

Is it time for you to form a people analytics team?

The answer to this question is essentially the same as deciding when you need an HR department: you don’t need one – until you do.

In a small organization where everyone pretty much knows all of their colleagues and their skills, people analytics isn’t going to be very useful. It’d be faster and more efficient to simply ask an employee’s line manager – or even the employee themselves – than collect the data you’d need for analysis.

HR departments working with thousands of employees, however, will find that using people analytics makes their duties a lot more manageable and efficient.

9 benefits of an effective people analytics framework

The more information you have about the people you manage, the easier it is to determine how they fit into your company’s goals, what skills can be developed or better utilized, and whether or not they have adequate resources to meet their needs.

As a result of improved decision-making regarding policies, practices, and procedures, the following areas will also improve:

9 Benefits of an Effective People Analytics Framework

ING Bank’s people analytics win

In their paper on people analytics frameworks, Peeters, Paawue, and Van De Voorde cited the example of ING’s analytics team.

The financial institution wanted to create a department to protect the bank from economic crimes called Know Your Customer (KYC). However, there was a shortage of qualified applicants during their recruitment efforts, which obviously created a pretty big obstacle. You can’t run a department without any people.

This is where the people analytics team stepped in. They collected and analyzed data from over 9,000 job titles which allowed them to assess the knowledge, skills, and abilities of every ING employee.

This resulted in two major wins for the company:

  1. They were able to fill all the existing vacancies;
  2. Internal employees were given the opportunity to develop their skills and abilities in new roles.

Not only is retraining current employees much more cost-efficient than hiring new ones, but employees are more likely to stick with companies that provide them with growth opportunities and advancement.

Isson & Harriot’s 7 Pillars of People Analytics Success

In their 2016 book, People Analytics in the Era of Big Data, Jean-Paul Isson and Jesse S. Harriott describe what they call the “7 Pillars of People Analytics Success.” According to Isson and Harriott, these seven pillars act as an essential guide for leaders to use people analytics competitively.

Keep in mind, though, that this framework is only a guide, and every organization has its own unique circumstances. Don’t feel pressured to follow the pillars in a particular order if you’re unable to adapt them for your particular needs.

The 7 Pillars of a Successful People Analytics Framework

Workforce planning with people analytics

Effective workforce planning requires you to anticipate the future needs of your organization to meet its goals. If you don’t have the right people in the right place at the right time, you absolutely will not reach your objectives.

For example, retail stores use analytics every day. By analyzing the customer traffic, inventory, sales, and labor hours from the same time the previous year, managers are able to predict how many employees they need on the floor this year to meet customer demand and – ideally – make more sales than the previous year.

If that manager only considered one metric – average sale, for example – they wouldn’t have an accurate picture of their staffing needs. Last year could have been a very high traffic day, but there was a sale or promotion so the average sale was lower than normal. Alternatively, traffic could have been slow, but a few customers could have made unusually large purchases.

By utilizing this pillar of the people analytics framework, however, the manager knows exactly how many employees to schedule, how long each shift should be, and when the store will likely be busiest.

Using data to source talent

These days, you’re more likely to connect with a prospective employee via a tweet than a traditional interview. In fact, many companies are choosing to dispense with the traditional interview altogether in favor of take-home projects and other methods.

As a result, once you know which positions you need to fill, and which skills people should have to fill them, you need to know where to find the talent best suited to those roles and your organization.

People analytics will enable you to choose the most effective channels for recruitment by highlighting which ones are most used by your ideal candidates.

Are you acquiring the right talent?

80% of turnover is due to poor hiring decisions. Between recruiting, interviewing, training, and onboarding, turnover can cost employers 33% of an employee’s annual salary.

So it’s definitely worth getting the right people the first time around.

The acquisition pillar is about using analytics to do just that. People analytics will help you optimize your interview process, vetting procedures, and assess potential performance within the role.

Google used people analytics to determine how many interviews a candidate should have before being made an offer and even which questions should be asked during those interviews to identify the best candidates for the role.

I mean, if it’s good enough for Google, right?

Perfecting your employee onboarding, culture fit, & engagement

Successful employee onboarding is a win for both the employee and employer. If all goes well, the employee is introduced to the company, the culture, and their colleagues in a way that facilitates a seamless transition.

Done badly, the employee is likely to leave within their first 90 days, meaning you have to put all that investment in finding a replacement. I mentioned how expensive finding a replacement is, right?

As a remote company, we have to be very deliberate about establishing relationships here at Process Street. As a result, we pay a lot of attention to our onboarding process.

The idea is to get the new hire feeling like an old hand with as few bumps as possible. This is accomplished by constantly reviewing and analyzing past onboarding experiences, current employee experiences, and future objectives to ensure everything lines up in a way that makes achieving those objectives possible.

Reducing employee churn & optimizing employee retention

By effectively analyzing your employee data, company data, and market data, you can remain a competitive employer. If you have experienced employees earning the same income that entry-level employees earn at other companies, it’s highly likely that you’re going to lose that top talent to someone else.

Likewise, if you’re not publicizing the qualities employees are looking for, you may be missing out on some great opportunities. For instance, many Millennials and Gen Z job seekers are prioritizing environmental and social awareness when choosing where to work.

Best practices for assessment, development, & lifetime value

79% of people leave their job due to a lack of recognition. That said, only 14% feel that the formal, annual review actually improves their performance.

Somehow, you need to find a middle ground between the two and create an employee appraisal and recognition system that works for your organization. This isn’t always the simplest task, however – particularly in today’s knowledge economy where the value of human capital is a much more complex issue than in an industrial or manufacturing-based economy.

Companies like Starbucks, General Electric, and Adobe have addressed this complexity by ditching the annual review for more regular and frequent feedback and performance tracking.

Frequent monitoring of employee performance and development will identify candidates for raises, promotions, and other recognition. On the other hand, it’ll also highlight individuals who need more coaching or assistance. By the time an annual review comes along, the situation may be beyond fixing – or you might have already said goodbye to a top performer.

The importance of employee wellness, health, & safety

It’s no secret that people management has to take a holistic approach. If you’re only focused on an employee’s productivity, you can miss important indicators of how that employee is actually doing.

Overworked employees face an increase in health conditions, elevated stress, lack of sleep, and conflict with colleagues and/or in their personal lives. While these things all contribute to lower productivity for that employee, they also impact that individual’s colleagues and team members.

Unhappy or unwell employees can result in bottlenecks, absenteeism, and low morale. Not to mention the fact that we’re talking about people management, remember. The “people” part is important.

People analytics can keep you informed about the problems or obstacles your employees are facing, new initiatives and practices to increase health and safety, and the issues that really matter to them. Taking a proactive stance on improving the well-being of your employees will also improve employee engagement, happiness, and overall job satisfaction.

The 4 ingredient categories of the People Analytics Effectiveness Wheel

In conjunction with their research into effective practices in people analytics, Peeters, et al developed what they have called the People Analytics Effectiveness Wheel.

The purpose of this wheel is to identify the roles and individuals that are critical for an analytics team to be successful. By using the wheel as a framework, managers can then ensure that their teams not only have adequate resources for analyzing the data, but support within the company to do so effectively.

There are four main ingredient categories on the wheel:

  • Enablers
  • Deliverables
  • Governance
  • Stakeholder Management

Each of the categories will reinforce or support the others, though depending on your organization’s individual circumstances, one category may be more critical than another.

The People Analytics Effectiveness Wheel
(Source)

Enablers

As the name suggests, Enablers are the tools and resources that enable your people analytics team to make conclusions using the data they’ve collected. Each organization will have slightly different needs and criteria for what their Enablers will be.

That said, if you want your people analytics project to be at all successful, there are three key components you need to secure before you even start:

  1. The right skills
  2. The right infrastructure
  3. The right support

Knowledge, skills, abilities, & other characteristics (KSAOs)
When building your people analytics team, it’s important to examine what pre-existing KSAOs they bring to the table.

The eight must-have KSAOs are:

  • Knowledge of HRM and related theories
  • Psychological and statistical skills
  • Business acumen
  • Storytelling and visualization skills
  • Data management
  • Change management
  • Stakeholder management

Data & infrastructure
Without data, your team has nothing to analyze. Accessing extensive data on employee behaviors, productivity, needs, and abilities gets easier every passing minute, but quantity certainly does not equate quality.

Low data quality can result from a few factors:

  • It’s out of date due to the lack of a consistent knowledge database.
  • There is incorrect or incomplete information due to human error.
  • Different areas of the business may use different definitions for certain types of data, causing confusion over what exactly is being measured.

Support of top management
Senior management support isn’t exclusive to people analytics teams alone. No project team can be successful without management standing behind them to advocate for and secure financial and political support, equipment, infrastructure, and appropriate resources.

If your team lacks management support, they’re likely to face more resistance in the collection of data, as well as more resources on justifying their role than performing it.

Deliverables

As with any project, before beginning, you need to have a clear idea of what results you expect, how they should be presented, and what evidence needs to be included to back them up. First, you’ll need to get leadership to approve your conclusions, but you also need the rest of your stakeholders to understand the value of those conclusions and take the necessary actions.

The three subcategories here all contribute to acquiring accurate data, conducting a thorough analysis of that data, and making the right conclusions as a result.

Organizational research
Organizational research basically covers a question or issue that’s specific to your organization. It allows you to investigate the topics that are most relevant to your teams and organizations, and prioritize them as needed.

Organizational research will usually use one (or more) of the following analytical models:

  • Behavioral: Draws on existing data to link predictors with particular outcomes. For example, a recruiter may use this model to make hiring decisions by determining which KSAOs relate to high job performance.
  • Predictive: Uses data to predict future outcomes. Surprise, right? In the recruiter’s case, they would attempt to predict which of the candidates is most likely to become a high performer when making hiring decisions.
  • Prescriptive: Prescribes which action should be taken based on the existing data. So whereas the behavioral model would indicate which KSAOs to look for and the predictive model would determine future potential, this model simply presents the conclusion: Hire Person A over Person B.

It’s important for your analytics team to be adept at building these models, but also have a clear understanding of which is best suited for the current problem.

Employee monitoring
Are the monitoring tools you’re using providing accurate reports and indicators on what is happening in your organization? Are productivity scores truly representative of the amount of work being done (or not done), or is the wrong variable being measured?

To get the best value from your monitoring tools and strategies, you need to evaluate whether or not you’re getting the information you need to make the best decisions possible.

Evidence-based culture
This is another area where the support of top management is crucial. It’s up to management to establish a culture where stakeholders see the value of people analytics in their decision-making processes.

As Peeter, et al state:

“[O]nce the use of data and analytics becomes more common practice, stakeholders will likely value their outputs more, which also further increases the power and reputation of the team. As such, the establishment of an evidence-based culture will likely directly influence the effectiveness and added value of people analytics teams.”

Governance

Governance is about the why and how of your data collection processes. How are you going to keep that data secure? What’s your procedure for following laws and regulations? What external authorities will be ensuring these commitments are kept?

Basically, when it comes to data collection, you need to make sure that all your bases are covered. Knowing exactly how you’re going to govern the collected data, internal procedures, and external expectations will save you a lot of headaches.

Data governance
Data governance is a sticky issue. With more and more data privacy legislation coupled with increased concerns about privacy, the data you collect, how you collect it, and what you do with it after all need to follow very strict parameters.

In terms of your data management systems, consider:

  • Anonymization
  • Storage duration and location
  • Security and access
  • Data format
  • Maintenance

Be aware of the impact your analysis will have and carefully evaluate whether or not that is an outcome that will be more harmful than beneficial.

Governance of internal functions
To keep in line with government, HR, and risk management safeguards, your people analytics framework needs to be built with deliberate intent.

This means looking at:

  • Organizational positioning: Will your team be placed within or outside your HR department? Will they collaborate with other analytics teams within your organization? What data will be shared between these teams and how will it be used?
  • Reporting structure:<.strong> The HR director is usually considered the best candidate for the team to report to because they understand the key people issues, have the seniority to grant the team access to the necessary resources, and have the influence to act on the analytics insights.
  • Internal team structure: The ideal role for an analytics team lead is as a manager and facilitator of a team of experts. That is, not every person needs to possess every KSAO, but they should have expertise in at least one of those areas. Teams are also often divided into two sub-teams: reporting and analytics, which gives each a specific focus and direction.
  • Delivery channels: How and to whom will the team’s products be delivered? Depending on where your organization is located, there will be legal and ethical concerns that need to be considered when it comes to choosing which delivery channels will be used. For example, anonymity is generally a requirement so protecting participants’ identities (unless they’ve otherwise consented) will be a critical factor in how reports are distributed and who has access to them.

Governance of the external societal legitimacy
In addition to your internal stakeholders, you’ll also have external stakeholders you need to communicate and align your data collection processes with. Primarily this will be unions and employee representatives, but it may also include consultancy firms, universities, or organizational scholars.

It’s often recommended that organizations make use of at least one of these groups, as they have the experience and expertise to optimize the people analytics team’s output.

Stakeholder Management

I mentioned your stakeholders briefly under Deliverables, but getting them on board isn’t going to be a matter of simply assuring them you’ve done your research.

Your people analytics team will be made up of individuals with specialized expertise and the skills to properly analyze the necessary data. For the most part, your stakeholders will have neither of those things.

There are four main groups of people you’ll need to consider in this category. While their level of involvement and influence with the people analytics team will vary, it’s important to maintain transparency and communication with all of them.

HR professionals
This is possibly the most important stakeholder group for the people analytics team. The insights reached will generally be most beneficial to your HR team.

HR, though, tends to be more “people” focused than “numbers” focused, and, as a result, your HR team may be unequipped for interpreting the analytical data collected.

Some other strategies include:

  • Educate HR on analytics
  • Share success cases
  • Focus topics specific to HR professionals
  • Include HR from the beginning of the analytics process

You should also determine the specific data-driven KPIs for your HR management goals.

Managers
While top management needs to be the team’s biggest supporter, they will also act as a stakeholder. The people analytics insights will enable management to address organizational chaos and business strategies.

Other analytical teams
Depending on the experience of your people analytics team, partnering with other analytics teams within the organization can be hugely beneficial, as these teams will already be experienced with analytical models and techniques.

Employees
This is the stakeholder group that will be most affected by the insights of your people analytics team. They are likely to also be the most cautious and wary of those insights.

As with all aspects of people management, transparency and communication are key to maintaining morale and cooperation with prospective changes. Conducting a change management analysis or risk assessment will make sure you’re prepared for any potential impact.

Power tools for your people analytics team

You very likely already have a suite of software collecting and storing most of your important metrics.

That said, the following apps can give your existing setup a boost – and make it easier for your teams and managers to improve productivity, progress, and procedures.

Process Street: Automate recurring processes

people-analytics-ingredient-categories-process-street

I know it probably sounds biased, but Process Street Workflows are pretty dang awesome. We use them for everything – and not because we have to. By taking over the tedious, repetitive tasks, Workflows let us get on with the important stuff (like writing incredibly witty and clever blog posts).

Every team has recurring processes. You know, those things you have written down and stashed in random docs, people’s heads, and that filing cabinet no one has a key for? Process Street transforms those processes into interactive, no-code workflows that are stored in a single, central location.

Key features:

  • Instantly update all of your live workflow runs at the same time. If you need to make any changes to a workflow, you only have to edit the original template, and everyone using that workflow will get the same update.
  • Capture and organize all of your operational knowledge with Pages, which allow standalone documentation to live side-by-side with your interactive processes.
  • Add the complete functionality of Process Street Workflows to your Slack workspace with the Slack App and get more done with less effort!
  • Integrate your workflows with Salesforce, DocuSign, and more with Process Street Automations, plus thousands of additional apps through Zapier.
  • Build workflows with conditional logic to create branching pathways that allow your processes to stay dynamic, flexible, and adaptable – no matter what the situation.
  • Guest users allow you to keep your important data secure while collaborating with external colleagues. Guest users only see what you want when you want.

ClicData: Visualize all your business data in one place

people-analytics-ingredient-categories-clicdata

ClicData is a 100% cloud data warehouse and dashboard. It connects all of your data tools, so you get the insights, reports, and metrics you need to run your business. Build a single source of truth that lets you format your data the way you want to share it, however you want, with whoever you want to share it with.

Key features:

  • Over 70 types of visualization widgets to create interactive dashboards and reports. The drag & drop dashboard tool makes it super easy to completely customize the look and feel of your dashboard in minutes.
  • Set custom schedules to refresh your data and update your dashboards, as well as live alerts on critical data. This way all of your teams are always aligned – no matter where they are – and you can monitor important changes in real-time.
  • Connect all your favorite apps from Amazon to Zendesk to visualize all your business data in one place.
  • Free iOS and Android mobile apps that make sure that you can get to your dashboards anywhere – any time. With fully responsive dashboards that adapt to any screen size (landscape or portrait) you get all the perks of life reporting in the palm of your hand.
  • ClicData data centers are maintained and monitored by Microsoft Azure following standards such as ISO 27001, HIPAA, FedRAMP, SOC 1, and SOC 2. No one will be able to access your data without your explicit permission.

Hubstaff: Monitor your remote team

people-analytics-ingredient-categories-hubstaff

Hubstaff pretty much does everything you could possibly wish for in a time and productivity management app. Project management, productivity measurement, budgeting, and payroll and invoicing are just a few of the features Hubstaff offers, which make it an excellent tool for keeping track of exactly where your resources are being used – and how to use them better.

Key features:

  • The GPS-based tracking system allows you to automate clocking in and out, access location-based reports of work hours, and locate your teams when they’re traveling to a worksite.
  • Streamline scheduling, shift management, and time off requests with the desktop and mobile time clock apps.
  • Automate your invoicing and payroll management by setting payment rate, frequency, and method – saving time with more accurate accounting.
  • Over 30 integrations with apps like Slack, Trello, and Salesforce to maximize your productivity and communication by centralizing your activity in a single app.
  • Monitor your time and budget limits with custom alerts for projects and team members. No more worrying about unexpected expenses!
  • See exactly how much time you’re spending on specific projects for specific clients so you can have more accurate labor predictions for future projects.

A word of caution on people analytics procedures

Employee monitoring is a contentious issue. It can make employees perceive a lack of trust on the part of leadership, potential privacy invasions, and uncertainty about how their information will ultimately be used.

By nature, people analytics requires collecting some data on your employees in order to properly assess their skills, abilities, productivity, and so on. But – tread carefully.

People analytics can be a powerful tool for any organization to use, but it’s also a tool that must be used carefully. Identifying these four ingredient categories for your own organization will enable your analytics team to collect, analyze, and report their findings both effectively and ethically in a way that is ultimately beneficial to all stakeholders.

Before implementing any monitoring or data collection, ensure that you’re following the laws where your company operates.

It’s a good idea to also explain the what, why, and how of your data collection to your employees, and get their feedback. This is an area where you want to be as transparent as possible so that your employees feel comfortable with the information you gather about them.

Key takeaways: Are you Team Orlok or Team Dracula?

HR gets a bad rap, largely because in the past, HR departments haven’t really concentrated on the human part of their role. As more and more companies transition away from old school HR to more holistic People teams, though, that role is transitioning into a more mediatory position. People teams are the bridge between employees and leadership, charged with the welfare and well-being of the organization as a whole.

Still, traditions don’t die easily. You never know when they’re likely to rise from the grave, even long after they’ve been buried deep in the ground.

This means many employees are still wary of putting their trust in HR (or the rebranded People team), and even more wary of providing detailed data on their actions that might be used against them at some point in the future.

It’s your job to assure them that you don’t plan to bleed them dry and discard their desiccated husk by the wayside. The status quo may change as a result of the data collected, but that doesn’t have to be a bad thing. It could usher in a whole new way of working, new skill development, and new opportunities that not only seemed impossible and improbable, but utterly unbelievable.

The Orloks of the world have obviously sketchy motives, but the Draculas aren’t really evil. They’re just a little misunderstood, and HR management is no different. You’re not “out to get” anyone, but sometimes it can seem like that a little.

The key takeaway to good data collection practices is transparency. Facilitate trust and communication between every level of the organization. Most importantly, don’t be an Orlok. No one likes creepy.

(If you need some help on that, Dr. Heather Whiteman offers some insight on using data for good.)

What impact has people analytics had on your business? Tell us more in the comments!

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Leks Drakos

Leks is a rogue academic with a PhD in contemporary fiction from the University of Kent (Paris and Canterbury). Hobbies include post-apocalyptica, street photography, and monster studies. Twitter: @leksikality [he/him]


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