In most service businesses, people, knowledge, and technology remain the prime source of competitive advantage. The three are also capital intensive and relative to the industry. Even industries such as oil and gas that have a high level of automation rely on this trio to give them a competitive edge.
The interplay and dynamics of people, knowledge, and technology is often not an easy task to ascertain both qualitatively and quantitatively. Of course, corporate financial analysts may show the costs incurred and savings threshold, but they will not be able to attribute value to people activities and knowledge impact. For instance, financial analysts may be adept in forecasting changes in market conditions or pricing, but when it comes to people and knowledge, they are invariably undecided and make open-ended inferences.
This is where people analytics steps in and shows how to connect the people value of a company to the strategic business goals. According to an Aon Hewitt research, organizations can optimize their revenue growth by cultivating talent. People analytics (PA) help place value on leaders who cultivate talent. By using multiple sources of data and specific metrics, PA helps in evaluating the overall effectiveness of the leadership system.
For HR leaders, PA represents a major opportunity to shape the people value addition and leverage various knowledge sources. PA’s predictive analytics tools make it possible to analyze data and understand at a deeper level what drives the results in recruitment, performance, and employee mobility among others. The coming together of Artificial Intelligence and analytics has pushed the borders of analysis far beyond employee engagement and retention. Today, PA is more business driven and less HR focussed. However, the onus rests on the HR to leverage people data for a broad range of business problems, not limiting to people functions alone. PA has opened new avenues for data to drive business results; it accesses external data and social network data to establish a connection between attrition, retention, and other performance metrics.
From simply building data models to developing dashboards in real time, analytics tools have come a long way: it is now possible to analyze ten different measures of team engagement and performance on the move, helping management understand hiring, retention, and performance issues.
As businesses and organizations adopt analytics to inform business strategy, success will require a prolonged time commitment and continued investment. To make the best use of PA, it is important to increase the exposure to analytics throughout the organization. Regardless of whether organizations do the analysis themselves or have specialists supporting them, it is important to give training to both HR and other business functions, especially as PA is evolving as a multidisciplinary tool that leverages different functional information critical to success.