People analytics, strong businesses go together

There may be plenty of room for improvement, but new research indicates that organizations that have a strong people analytics culture are much more likely to have strong business performance.

According to research from the Chartered Institute of Personnel and Development in association with Workday, despite the successes it can bring, the adoption of people analytics in business is not yet broadly done, and organizations need to do more to improve skills and confidence.

Related: 3 ways to use data analytics to drive growth

Globally, it’s obvious that the use of people analytics is not all that widespread; only a little more than half—54 percent—of global respondents say they have access to people data and analytics. In addition, 39 percent have no access to people data for decision-making purposes, while only 52 percent of HR professionals say their organization uses people data to tackle business problems.

Among those who do use people analytics, the results indicate that it’s making a difference, with 75 percent of HR professionals globally using people data to tackle workforce performance and productivity issues. In addition, 65 percent of those working in an organization with a strong people analytics culture say their business performance is strong when compared to other competitors—but only 32 percent of those in organizations with a weak analytics culture report a strong business performance.

The report finds that the use of people data can predict the effectiveness of tackling key organizational challenges, such as workforce performance and productivity; that, it adds, indicates that using people data leads to good outcomes.

“It’s hugely encouraging to see that the use of people analytics in organisations is leading to positive outcomes,” says CIPD human capital and governance adviser Edward Houghton. “We need to see greater investment in the skills needed to understand people data and we need to encourage the use of people analytics across different functions in organizations, and in finance in particular. HR must lead the development of cultures that share a ‘common language’ when it comes to people data and a shared understanding and appreciation of the positive impact people data can have on business outcomes.”

And while the U.S. is ahead of many other countries globally in using people analytics, at 50 percent of respondents (compared with, for instance, 67 percent in Southeast Asia and 60 percent in the Middle East and North Africa), it’s not as if confidence is all that high in the practice globally.

Just 40 percent of global respondents say their HR team was able to tackle business issues using analytics data, and only 53 percent of HR professionals globally think their HR team has demonstrable numerical and statistical skills; just 36 percent of finance professionals agree. And only 35 percent of non-HR professionals think their HR team are experts at using people data.

There’s also the matter of access, with research highlighting its importance. It finds that access to people data improves outcomes, but only 71 percent of HR professionals have access to people data and just 42 percent of finance professionals do. For those with access, just 22 percent use it daily in their decision-making and 23 percent use it in decision-making just once a month or less.

CIPD and Workday offered three suggsetions for HR departments:

• Build people analytics skills and confidence in to the profession
• Build strong cross-functional relationships to improve the impact of people analytics
• Make better use of people data to understand business risks