Human Resource Management

Elham Malik

Assistant Professor, SBM, NMIMS Mumbai

Session - 8

People Analytics

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 Overview of People Analytics

People Analytics, often referred to as HR Analytics or Workforce Analytics, involves the collection, analysis, and
interpretation of data related to human resources (HR) processes to improve organizational decision-making and performance.
This approach leverages data-driven insights to optimize the workforce, enhance employee experience, and support strategic
HR initiatives.

Key Components of People Analytics:

1. Data Collection:
○ Internal Sources: Employee performance metrics, engagement surveys, HR records (e.g., absenteeism, attrition
rates, hiring processes), compensation data.
○ External Sources: Labor market data, industry benchmarks, social media analysis, and third-party platforms (e.g.,
LinkedIn, Glassdoor).

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Overview of People Analytics

External data refers to information gathered from outside the organization, typically from the broader labor market,
competitors, or industry-wide benchmarks.

1. Labor Market Data:

○ Examples: Unemployment rates, wage trends, skills in demand, hiring patterns across industries.
○ Use: Helps organizations stay competitive in recruitment, adjust compensation packages, and forecast hiring
needs based on market trends.

2. Industry Benchmarks:
○ Examples: Average turnover rates, salary benchmarks, diversity statistics, and average time-to-hire.
○ Use: Allows organizations to measure their HR performance relative to competitors, ensuring that they
maintain industry standards or surpass them.

3. Social Media Analysis:

○ Examples: LinkedIn data on job postings and employee career paths, Twitter mentions of company culture,
employee reviews on platforms like Glassdoor.
○ Use: Enables organizations to gauge their brand as an employer, identify public perceptions, and understand
employee engagement and sentiment in real-time.

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Overview of People Analytics

Analytics Types:

1. Descriptive Analytics

Descriptive analytics involves summarizing historical data to provide insights into what has occurred within the organization. This type of analytics focuses on
understanding past performance and behaviors, allowing HR professionals to identify trends and patterns.

Key Characteristics:

● Historical Focus: It looks back at data from previous periods to understand what has happened.
● Data Summarization: Involves the aggregation and visualization of data for easier interpretation.
● Reporting: Commonly used for generating reports and dashboards that highlight key metrics and trends.

Examples:

● Attrition Reports: Summarizes employee turnover rates, reasons for leaving, and the impact on the organization. This can help HR identify whether attrition is
higher in certain departments or roles.
● Productivity Trends: Analyzes employee performance data to track productivity levels over time, helping to identify peaks and troughs in performance and
understand factors contributing to these changes.
● Employee Engagement Surveys: Provides an overview of employee satisfaction and engagement levels based on survey responses, highlighting areas of
strength and those needing improvement.

Usefulness: Descriptive analytics helps organizations understand past behaviors and outcomes, enabling them to identify areas for improvement and inform strategic
decision-making.

CT, Variability

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Overview of People Analytics

2. Predictive Analytics

Predictive analytics employs statistical models and machine learning techniques to analyze historical data and make informed predictions about future outcomes. This
type of analytics allows organizations to anticipate trends and potential challenges.

Key Characteristics:

● Forward-Looking: Focuses on forecasting future scenarios based on existing data patterns.

● Modeling: Uses complex algorithms and statistical techniques to derive insights from historical data.
● Scenario Planning: Assists in preparing for various potential future situations.

Examples:

● Forecasting Turnover Risk: By analyzing historical attrition data along with employee engagement scores and performance metrics, predictive analytics can
identify which employees are at high risk of leaving and the factors contributing to their dissatisfaction.
● Future Hiring Needs: Analyzes trends in business growth, employee turnover, and market conditions to project future workforce requirements, enabling HR to
proactively plan recruitment strategies.
● Performance Predictions: Uses past performance data to identify employees likely to excel in specific roles or projects, helping to inform promotion or
development opportunities.

Usefulness: Predictive analytics enables organizations to make data-driven decisions that can enhance workforce planning, reduce turnover, and optimize talent
management strategies.

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Overview of People Analytics

1. Descriptive Analytics

Purpose:

● Focuses on what has happened by summarizing historical data.

● Helps in understanding patterns and trends within past events.

Examples:

● Monthly sales reports showing revenue by region.

● Performance dashboards tracking employee absenteeism over the past year.
● Website traffic analysis showing which pages were most visited last month.

Tools & Techniques:

● Data aggregation and reporting (e.g., Power BI, Tableau).

● Statistical summaries (mean, variance, correlations).
● KPIs (Key Performance Indicators) for business performance tracking.

Use Cases:

● To identify trends (e.g., seasonal variations in product demand).

● To create historical baselines for benchmarking.
● To provide insights into how past actions impacted performance.

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Overview of People Analytics

2. Predictive Analytics

Purpose:

● Uses historical data to forecast future outcomes or identify potential risks.

● Involves advanced statistical techniques and machine learning models.

Examples:

● Predicting employee turnover based on historical HR data.

● Forecasting next quarter’s revenue based on historical sales trends.
● Credit scoring models predicting the likelihood of loan default.

Tools & Techniques:

● Machine learning algorithms (e.g., regression, decision trees, neural networks).

● Predictive models using Python, R, or specialized platforms (like SAS).

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Overview of People Analytics

3. Prescriptive Analytics

Prescriptive analytics goes a step further by not only predicting potential outcomes but also providing actionable recommendations based on data insights. This type of
analytics helps organizations understand the best courses of action to achieve desired outcomes.

Key Characteristics:

● Action-Oriented: Focuses on recommending specific actions to optimize outcomes.

● Complex Algorithms: Utilizes advanced mathematical and computational techniques to evaluate potential decisions and their impacts.
● Optimization: Aims to find the best solution among various alternatives based on given constraints.

Examples:

● Improving Retention Strategies: By analyzing factors contributing to employee turnover and engagement, prescriptive analytics can recommend targeted
retention initiatives, such as tailored development programs or adjustments to compensation packages.
● Identifying Leadership Potential: Evaluates employee performance, engagement levels, and career trajectories to recommend high-potential candidates for
leadership roles or succession planning.
● Training and Development Recommendations: Analyzes skills gaps and employee performance data to suggest specific training programs that align with
organizational goals and employee needs.

Usefulness: Prescriptive analytics empowers organizations to take proactive steps based on data insights, enhancing decision-making processes and driving strategic
initiatives that improve overall HR effectiveness.

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Overview of People Analytics

Benefits of People Analytics:

○ Informed Decision-Making: Enhances HR’s ability to make evidence-based decisions, reducing guesswork.
○ Increased Productivity: Optimizing workforce deployment, identifying skills gaps, and ensuring better talent alignment.
○ Cost Reduction: Reducing costs related to turnover, inefficient recruitment processes, and poor performance management.
○ Improved Employee Experience: Enhancing engagement and satisfaction by addressing key pain points using data-driven
insights.

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Overview of People Analytics

Challenges:

○ Data Privacy and Ethics: Managing sensitive employee data responsibly and complying with regulations.
○ Data Quality: Ensuring the accuracy and completeness of HR data for reliable analysis.
○ Change Management: Gaining leadership buy-in and promoting a data-driven culture within the HR function.

Data Privacy and Ethics

Key Aspects:

● Sensitive Employee Data: Organizations collect various types of sensitive data, including personal identification information, health records, performance
evaluations, and salary details.
● Regulatory Compliance: Organizations must comply with regulations that govern data protection, such as the General Data Protection Regulation (GDPR) in
the European Union, the California Consumer Privacy Act (CCPA) in the U.S., and other local laws. These regulations set guidelines on data collection,
processing, and storage, requiring organizations to:
○ Obtain explicit consent from employees for data collection and use.
○ Ensure data is used only for the purposes for which it was collected.
○ Implement measures to protect data from breaches or unauthorized access.
○ Allow employees access to their data and the ability to request deletion.

Ethical Considerations:

● Transparency: Organizations should be transparent about what data is collected, how it will be used, and who will have access to it.
● Fair Use: Data should not be used to discriminate against employees or make decisions that unfairly disadvantage certain groups.
● Trust: Building trust with employees regarding data privacy can lead to higher engagement and a positive workplace culture.

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Overview of People Analytics

Integration
Integration involves combining data from various systems and sources, such as Human Resource Information Systems
(HRIS), payroll systems, Learning Management Systems (LMS), and other HR tools.

Strategies for Integration:

● Centralized Data Management: Implementing a centralized data management system that aggregates information
from various sources can streamline integration.
● Standardization: Establishing standard definitions and metrics across all systems can simplify the integration
process.

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Overview of People Analytics

Change Management

Change management involves the processes and strategies organizations use to support employees in transitioning to new systems, processes, or cultural shifts,
particularly regarding adopting data-driven approaches in HR.

Key Challenges:

● Leadership Buy-In: Gaining support from organizational leadership is crucial for successful implementation. Leaders need to recognize the value of data
analytics and commit resources to support it.
● Cultural Resistance: Employees may resist changes, especially if they are not familiar with data-driven practices or fear that data might be used against them.
● Training and Support: Providing adequate training and ongoing support for employees to adapt to new tools and methodologies is essential for fostering a
data-driven culture.

Strategies for Change Management:

● Communication: Clearly communicating the benefits of data analytics and how it will improve processes can help alleviate fears and resistance.
● Engagement: Involving employees in the transition process and seeking their feedback can increase buy-in and foster a sense of ownership.
● Training Programs: Implementing training initiatives to enhance data literacy across the organization can empower employees to use analytics effectively.

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 People analytics maturity model

People Analytics Maturity Stages

1. Descriptive Stage:
○ Characteristics:
■ Focuses primarily on historical data analysis.
■ Utilizes basic reporting tools and dashboards to summarize past performance.
■ Commonly provides insights into metrics like turnover rates, headcount, and employee demographics.
○ Capabilities:
■ Data collection is largely manual, and reports are often created ad hoc.
■ Limited integration of data from various sources; data silos exist.
○ Outcomes:
■ Provides insights into "what happened" in the organization, but lacks depth for strategic decision-making.
2. Diagnostic Stage:
○ Characteristics:
■ Moves beyond simple reporting to identify the reasons behind observed trends and metrics.
■ Employs more advanced analytical techniques to uncover insights (e.g., correlation analysis).
○ Capabilities:
■ Data integration improves, with some effort made to combine data from various HR systems.
■ Increased use of surveys and employee feedback mechanisms to diagnose issues.
○ Outcomes:
■ Organizations can answer "why did it happen?" and develop preliminary insights to inform HR strategies.

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 People analytics maturity model

3. Predictive Stage:

○ Characteristics:
■ Incorporates statistical models and predictive analytics to forecast future trends and outcomes.
■ Uses historical data to identify patterns and predict potential issues, such as turnover risks or hiring needs.
○ Capabilities:
■ More sophisticated analytical tools are employed, including machine learning and AI techniques.
■ Increased reliance on data-driven decision-making in HR strategies.
○ Outcomes:
■ Organizations can anticipate future trends and address potential challenges proactively, answering "what is likely to happen?"

4. Prescriptive Stage:

○ Characteristics:
■ Provides actionable recommendations based on predictive analytics, helping HR to determine the best course of action.
■ Utilizes optimization techniques to evaluate different scenarios and their impacts on the organization.
○ Capabilities:
■ Comprehensive data integration allows for real-time analysis and recommendations across various HR functions.
■ Involves collaboration between HR, IT, and other departments to leverage insights effectively.
○ Outcomes:
■ Organizations can answer "what should we do?" and make informed, strategic HR decisions that align with business goals.

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 People analytics maturity model

5. Transformational Stage:

○ Characteristics:
■ Embeds data-driven decision-making into the organizational culture, with analytics integrated into all HR processes.
■ Continuously evolves analytics practices based on emerging trends and technologies.
○ Capabilities:
■ Advanced analytics capabilities, including prescriptive and cognitive analytics, are routinely used.
■ Strong data governance frameworks are in place to ensure data privacy, ethics, and quality.
○ Outcomes:
■ Organizations achieve a high level of agility, responsiveness, and strategic alignment in their HR practices, making them leaders in talent
management and organizational effectiveness.

Key Considerations for Advancing Through the Maturity Model

● Data Infrastructure: Invest in robust data management systems and tools to facilitate the collection, storage, and analysis of HR data.
● Skills Development: Enhance the analytics capabilities of HR teams through training and development programs, focusing on data literacy, statistical analysis,
and visualization tools.
● Change Management: Foster a culture that embraces data-driven decision-making and encourages collaboration between HR and other business functions.
● Stakeholder Engagement: Gain buy-in from leadership and stakeholders by demonstrating the value of analytics in driving organizational success and
improving HR practices.
● Continuous Improvement: Regularly assess analytics capabilities and outcomes, and seek opportunities for refinement and innovation.

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 Emerging Technologies in People Management

1. Artificial Intelligence (AI) and Machine Learning

● Recruitment and Talent Acquisition:

○ AI algorithms can screen resumes and assess candidates’ fit for roles based on historical hiring data and job descriptions.
○ Chatbots powered by AI assist in answering candidate queries, scheduling interviews, and providing a seamless application
experience.
● Employee Engagement:
○ AI-driven platforms analyze employee feedback from surveys and social media to gauge sentiment and engagement levels.
○ Predictive analytics can identify employees at risk of disengagement or turnover, allowing HR to intervene proactively.
● Learning and Development:
○ Personalized learning experiences can be created using AI to recommend training programs based on individual employee skills
and career goals.

2. Cloud Computing and HR Technology

● HR Information Systems (HRIS):

○ Cloud-based HRIS solutions centralize employee data, streamline HR processes, and enhance collaboration across teams.
○ These systems provide real-time access to data, enabling HR professionals to make informed decisions quickly.
● Learning Management Systems (LMS):
○ Cloud-based LMS platforms facilitate online training and development programs, allowing employees to access resources
anytime, anywhere.
○ They provide analytics on training effectiveness and employee progress, helping organizations tailor learning experiences.

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Emerging Technologies in People Management

3. Virtual and Augmented Reality (VR/AR)

● Training and Onboarding:

○ VR can create immersive training environments, allowing employees to practice skills in realistic scenarios without real-
world consequences.
○ AR can enhance onboarding processes by providing interactive tutorials and information overlays on tasks and
equipment.
● Remote Collaboration:
○ VR environments enable remote teams to collaborate in virtual meeting spaces, enhancing communication and
teamwork.

4. Natural Language Processing (NLP)

● Sentiment Analysis:
○ NLP tools can analyze employee feedback from surveys, emails, and social media to gauge overall sentiment and
identify areas for improvement.

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Temple Health System: Real-Time Feedback & People Analytics (A) [Ivey, HBS, 2020]

Q & As

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 Why You should apply Analytics to your People Strategy

Q & As

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai

 AIHR Webinar, What is HR Analytics?

https://www.youtube.com/watch?v=vhkZL--5hEQ

Human Resource Management, Elham Malik, SBM, NMIMS, Mumbai