10 Emerging People Analytics Trends to Revolutionize Your Workforce
Uncertainty and confusion have clouded the workplace over the last few years.
HR teams have grappled with a wave of departures during the Great Resignation, rising mental health problems caused by burnout, and the challenges of supporting hybrid work environments.
One thing that can cut through the chaos? Data.
And this is why people analytics has emerged as a powerful tool to support HR teams and manage complex workplace issues. Hard figures and the stories they tell enable us to assess the state of the workforce, analyze employee behavior, and make evidence-based decisions that bring long-term success.
This guide digs into ten of the latest people analytics trends shaping the future and expanding the influence of HR teams:
📊 1. Data-driven decision making
Companies don't collect data for the heck of it — they need to interpret the information clearly, then act on it to produce results. And this is especially useful when making difficult decisions, such as layoffs.
Example: Reports suggest that companies like Alphabet (Google's parent company) used an algorithm-based performance ranking system to identify and fire the lowest-performing employees.
But sometimes, it's hard to influence an audience using raw data — numbers can be boring and challenging to visualize. Instead, people teams must rely on storytelling to craft a narrative behind the number-crunching. Shawn Plummer, CEO of The Annuity Expert, told us,
"Simply talking about cold data doesn't convey the full picture to leaders. Accordingly, there is a growing trend to translate this data into stories that decision-makers can use as guidance.
To tell compelling stories, look for interesting peaks, valleys, and anomalies. Use visualizations to show the overall trends in a way that can be understood at a glance. Stories are powerful because they inspire curiosity, thought, and action."
💬 2. Powering DEIB discussions
Diversity, Equity, Inclusion, and Belonging (DEIB) have been a major focus of businesses since the social justice movements of 2020. Analytics solutions can provide valuable insights into how effective DEIB initiatives are. This use case is a top trend, with RedThread research highlighting that growth in the PAT market is down to customers "exhibiting a growing emphasis on using data and metrics for DEIB."
Luciano Colos, Founder and CEO at PitchGrade, agrees:
"This trend reflects society's increased focus on combating racial injustice and promoting greater diversity and inclusion in all aspects of life, including the workplace.
We regularly collect data on diversity and inclusion metrics, such as the representation of different demographic groups across our workforce, employee engagement, and turnover rates. By analyzing this data, we can identify patterns and trends that help us better understand the experiences of our employees and identify areas where we need to focus our efforts to promote greater diversity, equity, and inclusion."
Start by defining your DEIB initiatives, work out your goals, and then determine the data you need to track your progress.
🌈 3. Improving recruitment diversity
Diversity initiatives aren't an overnight fix.
But an obvious way to improve your ranks' diversity is to focus on your recruitment data.
Recruiting analytics can help with this, allowing organizations to track the diversity of job applicants and the fairness of their hiring process.
For example, people teams use AI-powered tools to review written applications and resumes for signs of potential bias in language or formatting. They can also incorporate applicant tracking systems into their recruitment workflow to track candidates' progress at each stage.
These tools allow companies to understand their recruitment data better and use it to improve diversity across their workforce.
Administrative Manager Antreas Koutis told us how Financer relies on data to address a lack of diversity in its hiring process, specifically regarding racial and ethnic diversity.
"Our HR team uses people analytics to analyze the hiring data and identify where the gaps are. The team gathers data on the demographics of our current employees and applicants. They also collect information on the various stages of the hiring process, such as the number of resumes received, the number of candidates interviewed, and the demographics of those candidates.
Next, they analyze the data to identify any patterns or trends. Often, the team finds they receive fewer resumes from people of certain races or ethnicities or that candidates from underrepresented groups are less likely to make it to the interview stage.
Based on the findings, they develop a plan to address these gaps.
For example, they might implement new recruiting strategies that target underrepresented groups or revise the job descriptions to use more inclusive language."
🤝 4. Enhancing the employee experience
Since 2020, work has become increasingly remote and distributed. In addition, companies have also experienced a wave of departures as employees seek a better work-life balance or carve new career paths.
As a result, many HR teams have shifted their focus to improving the employee experience (EX). People analytics helps employers understand how employees engage with their workplace, their challenges, and where improvement opportunities exist.
But Liam Liu, Co-Founder and CMO of Parcel Panel, believes that people leaders are going beyond the obvious to dig deeper into how employees are feeling. He told us,
"Many HR teams are shifting their focus from traditional HR metrics, such as turnover and engagement, to employee experience metrics that measure how employees feel about their work environment, culture, and growth opportunities. It involves using a variety of feedback mechanisms, such as surveys, focus groups, and social media monitoring, to gather insights into employee sentiment.
Our HR team is integrating their people analytics systems with other HR and business systems, such as performance management, learning and development, and finance, to get a more holistic view of employee performance and engagement. Using predictive analytics, they can also forecast future trends and identify potential issues before they become problems. For example, the HR team can identify which employees are most likely to need development or coaching, allowing HR teams to address performance issues proactively."
💼 5. Emerging People Analytics Director role
The people analytics technology (PAT) market has grown considerably, with a 53% increase between 2020 and 2021 and an 80% CAGR over the past five years. To match the changing demand for data, some companies are now creating dedicated people analytics roles as part of their HR team.
Stacia Sherman Garr, Co-Founder of RedThread Research, explains in an HR Happy Hour podcast episode why working in people analytics is one of the hottest jobs in HR. As she puts it, "You can't run finance without numbers. We shouldn't be running HR without numbers, either.
"What we see when you bring in a people analytics leader to build out your function, they come in as a Director of People Analytics, maybe a VP of People Analytics, depending on their previous experience. Then they will build out the team underneath that to the actual data analysts.
The people managing the details of the data, the people consulting with the HR business partner with the business directly — will be people analytics consultants. Then you'll have others doing more tech work and maybe the HR technology product design."
If you're interested in creating a similar role, consider the impact of your people analytics function on different areas of HR. For example, research from Insight222 highlights:
- The reporting line: an increasing number of personnel reporting into the people analytics function correlates with its higher accountability and influence
- The tenure of the function: as tenure increases, the probability of reporting into this function increases
- Frequency of meetings with the CHRO: there's a direct relationship between the amount of time spent discussing data-driven topics with the CHRO and its influence over them
- Relationships with senior stakeholders: similarly, the research suggests that people analytics teams have more influence when they gain more direct time with stakeholders.
👤 6. Determining the PAT end-user
Don't make the mistake of thinking that people analytics software is only for those with a PAT-related job title.
On the contrary, the industry has a growing demand for people analytics tools aimed at different types of end-users, although the market has yet to deliver.
RedThread reports three-year-old vendor estimates of the different types of people expected to use their PAT product by 2022.
- Only 23% of vendors consider regular employees as the end-user of their PAT product, compared to an estimated 54%
- Only 51% of business and C-suite leaders use people analytics software, compared to an estimated 72%
- Only 56% of people managers embrace people analytics tools, compared to an estimated 81%.
If you want to buy people analytics technology, choose a vendor supporting different end-users. You'll want to give employees actionable insights about their performance and behavior to boost development.
🔮 7. Moving from descriptive to predictive analytics
Descriptive analytics is retrospective data analysis that gives us an understanding of what's happened. Predictive analytics, however, attempts to answer the question "what's likely to happen in the future?" by extrapolating from historical data and trends.
That's where data-driven HR teams now use predictive analytics to anticipate what actions, programs, and strategic decisions will be most effective in their organizations.
In either case, Phil Willburn, VP of People Analytics at Workday, explains that there's still room for improvement with how we act on the data. In a My HR Future podcast episode, he said:
"The trend that we still need to make progress on is that we've unintentionally broken the link between insights and action. As a profession, we've been really drawn towards these very compelling BI tools that provide cool and sexy visualizations. It's quite difficult to take that, consume it, and take a particular action."
🕵️♀️ 8. Identifying process gaps to drive business results
Willburn adds, "The best organizations are blending people data with business data, adding in good research practices and advising leaders to make better decisions. We're getting a lot closer to focusing on business and people outcomes."
The way to approach this is to embrace transparent communication between business leaders and HR. Leaders need to explain the desired outcomes, while HR should be able to identify which data will answer these questions.
The next step is identifying the process gaps in an organization—from recruitment to exit interviews—that would benefit from people analytics initiatives. It's also worthwhile examining processes that aren't HR-owned, like customer service or revenue generation, that could benefit from the insights gathered through people analytics. While these may not be related directly to the people function, they may still impact employee engagement and satisfaction, ultimately driving performance and producing results.
🛠️ 9. Choosing how to deploy analytics
So far, we've talked broadly about people analytics technology. But if you're hoping to adopt it in your organization, you must decide whether to purchase and deploy an all-encompassing solution with multiple bells and whistles.
The alternative is to invest time into building a bespoke analytics model that provides the exact data you need.
This decision must be made with your IT team and stakeholders, as both options have risks and considerations.
For example, if you choose an all-encompassing solution, you'll only have one product to pay for, roll out, and support.
On the other hand, a customized solution assures you that your specific needs are met.
⚖️ 10. Considering the ethics of people analytics
Part of your decision will concern the ethics and security of deploying analytics software and your company's stance. Consider:
- What type of data are you collecting about your employees?
- Do you require their consent?
- Are you meeting all regulatory requirements — for example, SEC reporting on human capital metrics?
Stacia Sherman Garr elaborates:
"You can feel on the edge of what we may be comfortable with from an ethical or a data privacy or security perspective. So, it's important to think about what's your organization's culture around that.
How open are you to experimenting with some of these new technologies?
What's the context that your own organization is operating in, particularly from a data privacy security ethics component?
There's very different perspectives on the ethical aspects of this data and how it should be used, how it should be shared. Vendors themselves have very different perspectives. You want to make sure that there's an alignment on that point, or at least that you're clear, as a buyer, this is what we're okay with/this is what we're not okay with and making sure that gets built in."
➡️ Optimize your workforce with Zavvy's people analytics
Use people analytics to add value and help employees reach their potential while aiding business goals. Choose a scalable solution like Zavvy that will grow with your business to deliver meaningful insights and change mindsets. We offer the following tools:
- Analytics: drill down into our customizable dashboards by hire date or department. Filter by compensation statistics, attrition rates, tenure, gender, manager stats, headcount, average tenure, and the average age in the company.
- Pulse surveys: take the pulse of employee sentiment with regular snapshots that enable you to identify trends and act on them.
- Performance feedback: collect and assess data on review cycles, development progress, and individual goals.
- Onboarding: collect data on new hire satisfaction to better understand how quickly incoming team members settle in and become productive.
- Learning management: understand training progress data, engagement with course materials, and how your employees respond to continuous learning.
Ready to collect valuable insights about your people and transform them into a compelling narrative to fast-track your business goals? Book a free demo of Zavvy today.
What is the future of people analytics?
The future of people analytics will be characterized by greater sophistication and integration and a continued focus on improving workforce-related decision-making and strategy.
Organizations will seek better alignment of data analysis with overall business goals, perhaps looking into the granular detail of areas like finance and marketing.
Is people analytics a growing field?
Yes, people analytics technology is growing rapidly, with 125+ vendors in the market. RedThread research suggests that the market is now worth $3 billion and has achieved a compound annual growth rate of 80% over five years. Additionally, we know that 47% of vendors surveyed received investment in 2021.
What are notable trends in people analytics?
Three top people analytics trends are:
- Companies are leveraging data to support their DEIB initiatives, with AI and machine learning-driven analytics playing an important role.
- An increasing number of companies are crafting a dedicated People Analytics Director role to lead their people analytics efforts.
- Organizations are embracing analytics-driven recruitment and retention strategies to reduce time-to-hire, create a more diverse talent pool and foster a better employee experience.